Analyst(s): Futurum Research
Publication Date: January 30, 2026
Lam Research’s Q2 FY 2026 update underscores robust AI-led demand, accelerated adoption of gate-all-around (GAA) and advanced packaging, and growing services leverage from an expanding installed base. Management highlighted WFE constraints from cleanroom availability and second-half weighting in FY 2026, with continued focus on scaling manufacturing, automation, and services to support customer ramps.
What is Covered in this Article:
- Lam Research’s Q2 FY 2026 financial results
- GAA and advanced packaging adoption accelerate
- CSBG automation and fleet intelligence scale
- AI-led WFE demand amid fab constraints
- Guidance and Final Thoughts
The News: Lam Research (NASDAQ: LRCX) reported Q2 FY 2026 results for the quarter ended December 28, 2025. Revenue was $5.3B, up 22% year over year (YoY), versus the consensus of $5.2B. Systems revenue was $3.4B, up 28% YoY, and customer support-related revenue and other was $2.0B, up 14% YoY. Non-GAAP gross margin was 49.7% (versus 47.5% YoY), and non-GAAP operating margin was 34.3% (versus 30.7% YoY). Non-GAAP operating income was $1.8B (Q2 FY 2025: $1.3B). Non-GAAP net income was $1.6B (Q2 FY 2025: $1.2B) and non-GAAP diluted EPS was $1.27, up from $ 0.91 in Q2 FY 2025.
“Lam delivered another strong quarter to cap a record year,” said Tim Archer, Lam Research’s President and Chief Executive Officer. “Entering 2026, our expanding product and services portfolio is enabling the market’s transition to smaller, more complex three-dimensional devices and packages. With AI accelerating, we are ramping execution velocity across the company to support our customers’ growth and realize our vision for multi-year outperformance.”
Lam Research Q2 FY 2026 Highlights AI-Driven Demand and Packaging Gains
Analyst Take: Lam Research’s Q2 FY 2026 performance reflects strong execution against AI-driven device and packaging complexity, with broad traction across foundry-logic and DRAM/HBM. Management’s Wafer fabrication equipment (WFE) outlook of approximately $135B for calendar 2026, tempered by cleanroom constraints, points to sustained multi-quarter demand visibility and second-half weighting. Advanced packaging and GAA are central to Lam’s share gains, supported by recent product cycles like Akara and expanding services/automation capabilities. The expanding installed base and Customer Support Business Group (CSBG) innovation (equipment intelligence and Dextro cobots) add recurring, higher-margin leverage into the ramp.
AI Build-Out, WFE Constraints, and Second-Half Weighting
Management sees calendar 2026 WFE around $135B, with supply constrained by cleanroom capacity and fab readiness, driving a second-half weighted year. The industry remains effectively sold out, with customers pursuing multi-year agreements to secure capacity. Foundry-logic led systems demand in the quarter (59% mix), with leading-edge investments accelerating node transitions and mature-node activity in China. DRAM registered a company record (23% of systems), driven by HBM3E/4 migrations and 1B/1C node transitions enabling DDR5. NAND was 11% of systems, consistent with a first-half weighted 2025 and an improving AI-related demand outlook into 2026. These dynamics indicate durable AI infrastructure investment and a multi-year equipment cycle.
GAA, Backside Power, and Advanced Packaging Drive SAM Expansion
Lam reiterated that the GAA transition adds roughly $1.0B in Lam served available market (SAM) per 100,000 wafer starts per month. Advanced packaging, initially accounting for a mid-single-digit share of foundry-logic spend, is rising as more devices adopt complex packaging. For HBM4/4E and 16-high stacks, Lam’s leadership in electroplating and Through Silicon Via (TSV) etch positions it to benefit from tighter process tolerances and yield requirements. Management expects advanced packaging revenue to grow more than 40% in FY 2026, outpacing WFE growth in the category. In NAND, AI inference use cases, and rising SSD capacities are improving the trajectories of bit demand. This portfolio breadth strengthens Lam’s positioning in the AI-era device and package scaling.
CSBG Scale, Automation, and Fleet Intelligence as Durable Levers
Lam’s installed base surpassed 100,000 chambers, with CSBG revenue outpacing installed base growth and posting a record $7.2B in calendar 2025. In Q2 FY 2026, CSBG revenue reached $2.0B, up 12% sequentially, aided by Reliant systems and strong spares. Dextro cobots now support six Lam tool types, and equipment intelligence solutions are scaling predictive and automated maintenance and fleet matching. Management highlighted that these capabilities improve customer output while supporting CSBG margin efficiency. NAND spending enabled record upgrades in 2025 (+90% YoY), illustrating upgrade leverage in tighter cycles. These CSBG vectors are structural and should remain resilient through cycle transitions.
Guidance and Final Thoughts
For Q3 FY 2026, Lam guided revenue to $5.7B ± $300 million (consensus estimate: $5.2B), non-GAAP gross margin to 49% ± 1 percentage point, non-GAAP operating margin to 34% ± 1 percentage point, and non-GAAP EPS to $1.35 ± $0.10. Mix headwinds (including customer/regional mix) modestly pressure gross margin near term, with stronger demand expected in the second half. Management continues to expand global manufacturing capacity (notably Malaysia) and invest in labs and automation (including a new Arizona facility), targeting faster ramps and execution velocity. Initial 2026 WFE outlook and customer commentary on sold-out conditions indicate multi-quarter visibility despite fab readiness constraints. These factors, alongside accelerating GAA and advanced packaging adoption, underpin a constructive setup into late FY 2026 and FY 2027.
See the full press release on Lam Research’s Q2 FY 2026 financial results on Lam Research’s website.
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