The Layer Race in NANDWide moat

Lam Research (LRCX) — moat facet

Every extra layer in a memory chip is another deposition and etch step, and Lam expects its market per NAND wafer to double from 128 layers to 500.

Memory chips are built upward now, and that suits Lam. A NAND flash chip stacks hundreds of layers, and every layer has to be deposited and then etched through. Management said on the fourth-quarter fiscal 2026 call that it expects "SAM per wafer in NAND to double" from the 128-layer node to devices with more than 500 layers1. SAM is the served market: the equipment spending Lam's tools can address.

Nonvolatile memory share of systems revenue (%)11%Q2 FY202612%Q3 FY202623%Q4 FY2026Lam Research Q3 and Q4 FY2026 earnings calls
The NAND share doubled in one quarter.

That is why the memory makers have always been Lam's core customers. In fiscal 2018 memory was 78% of Lam's system shipments2. The share has since fallen, to 39% of equipment and upgrade revenue in fiscal 20263, because foundry grew faster, not because memory spending disappeared.

Memory spending came back at the end of fiscal 2026. Nonvolatile memory was 12% of systems revenue in the March quarter4 and 23% in the June quarter5, and management said "NAND revenue dollars more than doubled" sequentially6. Memory as a whole was 46% of June-quarter systems revenue7.

The mechanism is structural. More layers mean more deposition and etch steps for each wafer a memory maker starts, so Lam can grow with memory even when the number of wafers does not.

The mix moved within memory as well as into it. In the March 2026 quarter DRAM was 27% of systems revenue and nonvolatile memory 12%8; by June the two were level at 23% each9. The growth moved from DRAM to NAND, where the layer race lives.

Korea, where two of the memory makers are based, rose from 15% of Lam's revenue in the September 2025 quarter10 to 20% in the June 2026 quarter11, the regional sign of the memory spending returning.

The claim can be tested each quarter. If nonvolatile memory's share of systems revenue falls back toward 12% while the memory makers keep adding layers, the layer count is not turning into Lam revenue the way management expects.

Moat trajectory: Widening

NAND revenue more than doubled sequentially in Q4 FY2026.

The number that tests this moat
Reported
Nonvolatile memory share of systems revenue, latest quarter
23% (Q4 FY2026), from 12% in Q3

Whether layer growth is turning into Lam orders; a fall back to low teens would say it is not.

Source: Lam Research Q4 FY2026 call transcript ↗
⚠ Threats to the moat
⚠ THREAT 01
Memory Spending Comes in Waves
Memory was 78% of Lam's shipments before the 2019 downturn, and the June 2026 quarter took memory back to 46% of systems revenue.
References
  1. ReportedManagement said on the fourth-quarter fiscal 2026 call that it expects "SAM per wafer in NAND to double" from the 128-layer node to devices with more than 500 layers.
    The Motley Fool via Yahoo Finance, Lam Research Q4 fiscal 2026 earnings call transcript - installed base, end-market mix of systems revenue, WFE outlook, served market, customer support, China and margin targets - end-market mix of systems revenue, NAND, and China and Taiwan. — Q4 FY2026 · publ. 29 July 2026 · source ↗
  2. ReportedIn fiscal 2018 memory was 78% of Lam's system shipments.
    Lam Research Form 10-K for fiscal 2018 - system shipments by end market for fiscal 2016-2018, customers above 10% of revenue, and the termination of the merger agreement with KLA-Tencor. — FY2018 · publ. August 2018 · source ↗
  3. ReportedThe share has since fallen, to 39% of equipment and upgrade revenue in fiscal 2026, because foundry grew faster, not because memory spending disappeared.
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 7 MD&A and revenue notes: revenue by type, region and end market, and margins. — FY2026 · publ. 7 August 2026 · source ↗
  4. ReportedNonvolatile memory was 12% of systems revenue in the March quarter and 23% in the June quarter, and management said "NAND revenue dollars more than doubled" sequentially.
    The Motley Fool, Lam Research Q3 fiscal 2026 earnings call transcript - end-market mix of systems revenue in the March 2026 quarter. — Q3 FY2026 · publ. 22 April 2026 · source ↗
  5. ReportedNonvolatile memory was 12% of systems revenue in the March quarter and 23% in the June quarter, and management said "NAND revenue dollars more than doubled" sequentially.
    The Motley Fool via Yahoo Finance, Lam Research Q4 fiscal 2026 earnings call transcript - installed base, end-market mix of systems revenue, WFE outlook, served market, customer support, China and margin targets - end-market mix of systems revenue, NAND, and China and Taiwan. — Q4 FY2026 · publ. 29 July 2026 · source ↗
  6. ReportedNonvolatile memory was 12% of systems revenue in the March quarter and 23% in the June quarter, and management said "NAND revenue dollars more than doubled" sequentially.
    The Motley Fool via Yahoo Finance, Lam Research Q4 fiscal 2026 earnings call transcript - installed base, end-market mix of systems revenue, WFE outlook, served market, customer support, China and margin targets - end-market mix of systems revenue, NAND, and China and Taiwan. — Q4 FY2026 · publ. 29 July 2026 · source ↗
  7. ReportedMemory as a whole was 46% of June-quarter systems revenue.
    The Motley Fool via Yahoo Finance, Lam Research Q4 fiscal 2026 earnings call transcript - installed base, end-market mix of systems revenue, WFE outlook, served market, customer support, China and margin targets - end-market mix of systems revenue, NAND, and China and Taiwan. — Q4 FY2026 · publ. 29 July 2026 · source ↗
  8. ReportedIn the March 2026 quarter DRAM was 27% of systems revenue and nonvolatile memory 12%; by June the two were level at 23% each.
    The Motley Fool, Lam Research Q3 fiscal 2026 earnings call transcript - end-market mix of systems revenue in the March 2026 quarter. — Q3 FY2026 · publ. 22 April 2026 · source ↗
  9. ReportedIn the March 2026 quarter DRAM was 27% of systems revenue and nonvolatile memory 12%; by June the two were level at 23% each.
    The Motley Fool via Yahoo Finance, Lam Research Q4 fiscal 2026 earnings call transcript - installed base, end-market mix of systems revenue, WFE outlook, served market, customer support, China and margin targets - end-market mix of systems revenue, NAND, and China and Taiwan. — Q4 FY2026 · publ. 29 July 2026 · source ↗
  10. ReportedKorea, where two of the memory makers are based, rose from 15% of Lam's revenue in the September 2025 quarter to 20% in the June 2026 quarter, the regional sign of the memory spending returning.
    Lam Research first-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - revenue by type and region, with prior-year quarterly comparatives, and deferred revenue. — Q1 FY2026 · publ. 22 October 2025 · source ↗
  11. ReportedKorea, where two of the memory makers are based, rose from 15% of Lam's revenue in the September 2025 quarter to 20% in the June 2026 quarter, the regional sign of the memory spending returning.
    Lam Research fourth-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - revenue, margins, revenue by type and region, cash flow and September 2026 quarter guidance. — Q4 FY2026 · publ. 29 July 2026 · source ↗
Sources
Generated September 25, 2026