Lam Research Corp. engages in manufacturing and servicing of wafer processing semiconductor manufacturing equipment. It operates through the following geographical segments: the United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan. It offers thin film deposition, plasma etch, photoresist strip, and wafer cleaning. The company was founded by David Lam on January 21, 1980 and is headquartered in Fremont, CA.
The Semiconductor Capital Equipment Industry Is Subject to Variability and Periods of Rapid Growth or Decline; We Therefore Face Risks Related to Our Strategic Resource Allocation Decisions
Future Declines in the Semiconductor Industry, and the Overall World Economic Conditions on Which It Is Significantly Dependent, Could Have a Material Adverse Impact on Our Results of Operations and Financial Condition
Our Revenues and Operating Results Are Variable
We May Incur Impairments to Goodwill or Long-lived Assets
Our Credit Agreements Contain Covenant Restrictions That May Limit Our Ability to Operate Our Business
We Have a Limited Number of Key Customers
We Depend on Creating New Products and Processes and Enhancing Existing Products and Processes for Our Success; Consequently, We Are Subject to Risks Associated with Rapid Technological Change
We Are Subject to Risks Relating to Product Concentration and Lack of Product Revenue Diversification
Strategic Alliances and Customer Consolidation May Have Negative Effects on Our Business
We Depend on a Limited Number of Key Suppliers and Outsource Providers, and We Run the Risk That They Might Not Perform as We Expect
We Face Risks Related to the Disruption of Our Primary Manufacturing Facilities
Once a Semiconductor Manufacturer Commits to Purchase a Competitor’s Semiconductor Manufacturing Equipment, the Manufacturer Typically Continues to Purchase That Competitor’s Equipment, Making It More Difficult for Us to Sell Our Equipment to That Customer
We Face a Challenging and Complex Competitive Environment
Our Future Success Depends Heavily on International Sales and the Management of Global Operations
Our Ability to Attract, Retain, and Motivate Key Employees Is Critical to Our Success
Certain Critical Information Systems, That We Rely on for the Operation of Our Business and Products That We Sell, Are Susceptible to Cybersecurity and Other Threats or Incidents
Our Financial Results May Be Adversely Impacted by Higher than Expected Tax Rates or Exposure to Additional Tax Liabilities
A Failure to Comply with Environmental Regulations May Adversely Affect Our Operating Results
If We Choose to Acquire or Dispose of Businesses, Product Lines, and Technologies, We May Encounter Unforeseen Costs and Difficulties That Could Impair Our Financial Performance
The Market for Our Common Stock Is Volatile, Which May Affect Our Ability to Raise Capital or Make Acquisitions or May Subject Our Business to Additional Costs
Intellectual Property, Indemnity, and Other Claims Against Us Can Be Costly and We Could Lose Significant Rights That Are Necessary to Our Continued Business and Profitability
We May Fail to Protect Our Critical Proprietary Technology Rights, Which Could Affect Our Business
We Are Exposed to Various Risks from Our Regulatory Environment
There Can Be No Assurance That We Will Continue to Declare Cash Dividends or Repurchase Our Shares at All or in Any Particular Amounts
Revenue decreased in fiscal year 2019 compared to fiscal year 2018, but increased compared to fiscal year 2017, primarily as a result of the volatility of semiconductor capital investments by our customers. The overall Asia region continued to account for a majority of our revenues as a substantial amount of the worldwide capacity investments for semiconductor manufacturing continued to occur in this region.
Our deferred revenue balance was $449 million as of June 30, 2019, compared to $994 million as of June 24, 2018. The deferred revenue at the end of June 2019 is recognized under Accounting Standard Codification (“ASC”) 606, while the same values as of June 2018 are recognized under ASC 605, which contributes to the change in value period over period. Our deferred revenue balance does not include shipments to customers in Japan, to whom title does not transfer until customer acceptance. Shipments to customers in Japan are classified as inventory at cost until the time of customer acceptance. The anticipated future revenue value from shipments to customers in Japan was approximately $78 million as of June 30, 2019, compared to $607 million as of June 24, 2018.
The decrease in gross margin as a percentage of revenue for fiscal year 2019 compared to fiscal year 2018 was primarily due to lower factory utilization.