lrcx-20201227
false2021Q20000707549June 27us-gaap:AccountingStandardsUpdate201818Memberus-gaap:AccountingStandardsUpdate201602MemberP6MP2Y0.031723900007075492020-06-292020-12-27xbrli:shares00007075492021-01-29iso4217:USD00007075492020-09-282020-12-2700007075492019-09-302019-12-2900007075492019-07-012019-12-29iso4217:USDxbrli:shares00007075492020-12-2700007075492020-06-2800007075492019-06-3000007075492019-12-290000707549us-gaap:CommonStockMember2020-09-270000707549us-gaap:AdditionalPaidInCapitalMember2020-09-270000707549us-gaap:TreasuryStockMember2020-09-270000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-270000707549us-gaap:RetainedEarningsMember2020-09-2700007075492020-09-270000707549us-gaap:CommonStockMember2020-09-282020-12-270000707549us-gaap:AdditionalPaidInCapitalMember2020-09-282020-12-270000707549us-gaap:TreasuryStockMember2020-09-282020-12-270000707549us-gaap:RetainedEarningsMember2020-09-282020-12-270000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-282020-12-270000707549us-gaap:CommonStockMember2020-12-270000707549us-gaap:AdditionalPaidInCapitalMember2020-12-270000707549us-gaap:TreasuryStockMember2020-12-270000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-270000707549us-gaap:RetainedEarningsMember2020-12-270000707549us-gaap:CommonStockMember2020-06-280000707549us-gaap:AdditionalPaidInCapitalMember2020-06-280000707549us-gaap:TreasuryStockMember2020-06-280000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-280000707549us-gaap:RetainedEarningsMember2020-06-280000707549us-gaap:CommonStockMember2020-06-292020-12-270000707549us-gaap:AdditionalPaidInCapitalMember2020-06-292020-12-270000707549us-gaap:TreasuryStockMember2020-06-292020-12-2700007075492019-07-012020-06-280000707549us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-06-280000707549srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-06-280000707549us-gaap:RetainedEarningsMember2020-06-292020-12-270000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-292020-12-270000707549us-gaap:CommonStockMember2019-09-290000707549us-gaap:AdditionalPaidInCapitalMember2019-09-290000707549us-gaap:TreasuryStockMember2019-09-290000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-290000707549us-gaap:RetainedEarningsMember2019-09-2900007075492019-09-290000707549us-gaap:CommonStockMember2019-09-302019-12-290000707549us-gaap:AdditionalPaidInCapitalMember2019-09-302019-12-290000707549us-gaap:TreasuryStockMember2019-09-302019-12-290000707549us-gaap:RetainedEarningsMember2019-09-302019-12-290000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-302019-12-290000707549us-gaap:CommonStockMember2019-12-290000707549us-gaap:AdditionalPaidInCapitalMember2019-12-290000707549us-gaap:TreasuryStockMember2019-12-290000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-290000707549us-gaap:RetainedEarningsMember2019-12-290000707549us-gaap:CommonStockMember2019-06-300000707549us-gaap:AdditionalPaidInCapitalMember2019-06-300000707549us-gaap:TreasuryStockMember2019-06-300000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300000707549us-gaap:RetainedEarningsMember2019-06-300000707549us-gaap:CommonStockMember2019-07-012019-12-290000707549us-gaap:AdditionalPaidInCapitalMember2019-07-012019-12-290000707549us-gaap:TreasuryStockMember2019-07-012019-12-2900007075492018-06-252019-06-300000707549us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-06-300000707549srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-06-300000707549us-gaap:RetainedEarningsMember2019-07-012019-12-290000707549us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-12-2900007075492020-12-282020-12-2700007075492021-06-282020-12-2700007075492024-06-242020-12-27lrcx:segmentlrcx:regionlrcx:market0000707549lrcx:SystemMember2020-09-282020-12-270000707549lrcx:SystemMember2019-09-302019-12-290000707549lrcx:SystemMember2020-06-292020-12-270000707549lrcx:SystemMember2019-07-012019-12-290000707549lrcx:CustomerSupportandOtherMember2020-09-282020-12-270000707549lrcx:CustomerSupportandOtherMember2019-09-302019-12-290000707549lrcx:CustomerSupportandOtherMember2020-06-292020-12-270000707549lrcx:CustomerSupportandOtherMember2019-07-012019-12-290000707549country:CN2020-09-282020-12-270000707549country:CN2019-09-302019-12-290000707549country:CN2020-06-292020-12-270000707549country:CN2019-07-012019-12-290000707549country:KR2020-09-282020-12-270000707549country:KR2019-09-302019-12-290000707549country:KR2020-06-292020-12-270000707549country:KR2019-07-012019-12-290000707549country:TW2020-09-282020-12-270000707549country:TW2019-09-302019-12-290000707549country:TW2020-06-292020-12-270000707549country:TW2019-07-012019-12-290000707549lrcx:SouthEastAsiaMember2020-09-282020-12-270000707549lrcx:SouthEastAsiaMember2019-09-302019-12-290000707549lrcx:SouthEastAsiaMember2020-06-292020-12-270000707549lrcx:SouthEastAsiaMember2019-07-012019-12-290000707549country:JP2020-09-282020-12-270000707549country:JP2019-09-302019-12-290000707549country:JP2020-06-292020-12-270000707549country:JP2019-07-012019-12-290000707549country:US2020-09-282020-12-270000707549country:US2019-09-302019-12-290000707549country:US2020-06-292020-12-270000707549country:US2019-07-012019-12-290000707549srt:EuropeMember2020-09-282020-12-270000707549srt:EuropeMember2019-09-302019-12-290000707549srt:EuropeMember2020-06-292020-12-270000707549srt:EuropeMember2019-07-012019-12-29xbrli:pure0000707549lrcx:MemoryMemberus-gaap:ProductConcentrationRiskMember2020-09-282020-12-270000707549lrcx:MemoryMemberus-gaap:ProductConcentrationRiskMember2019-09-302019-12-290000707549lrcx:MemoryMemberus-gaap:ProductConcentrationRiskMember2020-06-292020-12-270000707549lrcx:MemoryMemberus-gaap:ProductConcentrationRiskMember2019-07-012019-12-290000707549us-gaap:ProductConcentrationRiskMemberlrcx:FoundryMember2020-09-282020-12-270000707549us-gaap:ProductConcentrationRiskMemberlrcx:FoundryMember2019-09-302019-12-290000707549us-gaap:ProductConcentrationRiskMemberlrcx:FoundryMember2020-06-292020-12-270000707549us-gaap:ProductConcentrationRiskMemberlrcx:FoundryMember2019-07-012019-12-290000707549us-gaap:ProductConcentrationRiskMemberlrcx:LoginIntegratedDeviceManufacturingMember2020-09-282020-12-270000707549us-gaap:ProductConcentrationRiskMemberlrcx:LoginIntegratedDeviceManufacturingMember2019-09-302019-12-290000707549us-gaap:ProductConcentrationRiskMemberlrcx:LoginIntegratedDeviceManufacturingMember2020-06-292020-12-270000707549us-gaap:ProductConcentrationRiskMemberlrcx:LoginIntegratedDeviceManufacturingMember2019-07-012019-12-290000707549lrcx:TaxExaminationsOrLapsesOfStatuteOfLimitationMember2020-12-270000707549lrcx:OptionsAndRestrictedStockUnitsMember2020-09-282020-12-270000707549lrcx:OptionsAndRestrictedStockUnitsMember2019-09-302019-12-290000707549lrcx:OptionsAndRestrictedStockUnitsMember2020-06-292020-12-270000707549lrcx:OptionsAndRestrictedStockUnitsMember2019-07-012019-12-290000707549us-gaap:CashMember2020-12-270000707549us-gaap:BankTimeDepositsMember2020-12-270000707549us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2020-12-270000707549us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMember2020-12-270000707549us-gaap:FairValueInputsLevel1Memberus-gaap:MutualFundMember2020-12-270000707549us-gaap:FairValueInputsLevel1Member2020-12-270000707549us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2020-12-270000707549us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignGovernmentDebtSecuritiesMember2020-12-270000707549us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2020-12-270000707549us-gaap:FairValueInputsLevel2Memberus-gaap:ResidentialMortgageBackedSecuritiesMember2020-12-270000707549us-gaap:CommercialMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-270000707549us-gaap:FairValueInputsLevel2Member2020-12-270000707549us-gaap:CashMember2020-06-280000707549us-gaap:BankTimeDepositsMember2020-06-280000707549us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2020-06-280000707549us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMember2020-06-280000707549us-gaap:FairValueInputsLevel1Memberus-gaap:MutualFundMember2020-06-280000707549us-gaap:FairValueInputsLevel1Member2020-06-280000707549us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2020-06-280000707549us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignGovernmentDebtSecuritiesMember2020-06-280000707549us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2020-06-280000707549us-gaap:FairValueInputsLevel2Memberus-gaap:ResidentialMortgageBackedSecuritiesMember2020-06-280000707549us-gaap:CommercialMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-06-280000707549us-gaap:FairValueInputsLevel2Member2020-06-280000707549us-gaap:USTreasuryAndGovernmentMember2020-12-270000707549us-gaap:MutualFundMember2020-12-270000707549us-gaap:ForeignGovernmentDebtSecuritiesMember2020-12-270000707549us-gaap:CorporateBondSecuritiesMember2020-12-270000707549us-gaap:ResidentialMortgageBackedSecuritiesMember2020-12-270000707549us-gaap:CashFlowHedgingMembersrt:MinimumMember2020-06-292020-12-270000707549us-gaap:CashFlowHedgingMembersrt:MaximumMember2020-06-292020-12-270000707549us-gaap:LongMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForwardContractsMemberus-gaap:ForeignExchangeContractMember2020-12-270000707549us-gaap:ShortMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForwardContractsMemberus-gaap:ForeignExchangeContractMember2020-12-270000707549us-gaap:SalesMemberus-gaap:ForeignExchangeContractMember2020-09-282020-12-270000707549us-gaap:SalesMemberus-gaap:ForeignExchangeContractMember2020-06-292020-12-270000707549us-gaap:CostOfSalesMemberus-gaap:ForeignExchangeContractMember2020-09-282020-12-270000707549us-gaap:CostOfSalesMemberus-gaap:ForeignExchangeContractMember2020-06-292020-12-270000707549lrcx:ResearchAndDevelopmentMemberus-gaap:ForeignExchangeContractMember2020-09-282020-12-270000707549lrcx:ResearchAndDevelopmentMemberus-gaap:ForeignExchangeContractMember2020-06-292020-12-270000707549us-gaap:ForeignExchangeContractMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-09-282020-12-270000707549us-gaap:ForeignExchangeContractMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-06-292020-12-270000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:InterestRateContractMember2020-09-282020-12-270000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:InterestRateContractMember2020-06-292020-12-270000707549us-gaap:ForeignExchangeContractMember2020-09-282020-12-270000707549us-gaap:ForeignExchangeContractMember2020-06-292020-12-270000707549us-gaap:SalesMemberus-gaap:ForeignExchangeContractMember2019-09-302019-12-290000707549us-gaap:SalesMemberus-gaap:ForeignExchangeContractMember2019-07-012019-12-290000707549us-gaap:CostOfSalesMemberus-gaap:ForeignExchangeContractMember2019-09-302019-12-290000707549us-gaap:CostOfSalesMemberus-gaap:ForeignExchangeContractMember2019-07-012019-12-290000707549us-gaap:ForeignExchangeContractMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2019-09-302019-12-290000707549us-gaap:ForeignExchangeContractMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2019-07-012019-12-290000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:InterestRateContractMember2019-09-302019-12-290000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:InterestRateContractMember2019-07-012019-12-290000707549us-gaap:ForeignExchangeContractMember2019-09-302019-12-290000707549us-gaap:ForeignExchangeContractMember2019-07-012019-12-290000707549us-gaap:NondesignatedMemberus-gaap:LongMemberus-gaap:ForwardContractsMemberus-gaap:ForeignExchangeContractMember2020-12-270000707549us-gaap:ShortMemberus-gaap:NondesignatedMemberus-gaap:ForwardContractsMemberus-gaap:ForeignExchangeContractMember2020-12-270000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2020-09-282020-12-270000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2019-09-302019-12-290000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2020-06-292020-12-270000707549us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2019-07-012019-12-290000707549us-gaap:CustomerRelationshipsMember2020-12-270000707549us-gaap:CustomerRelationshipsMember2020-06-280000707549lrcx:ExistingTechnologyMember2020-12-270000707549lrcx:ExistingTechnologyMember2020-06-280000707549us-gaap:PatentsMember2020-12-270000707549us-gaap:PatentsMember2020-06-280000707549lrcx:TwoPointEightPercentSeniorNotesDueTwoThousandTwentyOneMemberus-gaap:SeniorNotesMember2020-12-270000707549lrcx:TwoPointEightPercentSeniorNotesDueTwoThousandTwentyOneMemberus-gaap:SeniorNotesMember2020-06-280000707549lrcx:ThreePointEightZeroPercentSeniorNotesDueTwoThousandTwentyFiveMemberus-gaap:SeniorNotesMember2020-12-270000707549lrcx:ThreePointEightZeroPercentSeniorNotesDueTwoThousandTwentyFiveMemberus-gaap:SeniorNotesMember2020-06-280000707549lrcx:ThreePointSevenFivePercentSeniorNotesDueTwoThousandTwentySixMemberus-gaap:SeniorNotesMember2020-12-270000707549lrcx:ThreePointSevenFivePercentSeniorNotesDueTwoThousandTwentySixMemberus-gaap:SeniorNotesMember2020-06-280000707549us-gaap:SeniorNotesMemberlrcx:FourPointZeroPercentSeniorNotesDueTwoThousandTwentyNineMember2020-12-270000707549us-gaap:SeniorNotesMemberlrcx:FourPointZeroPercentSeniorNotesDueTwoThousandTwentyNineMember2020-06-280000707549us-gaap:SeniorNotesMemberlrcx:OnePointNineZeroPercentSeniorNotesDueTwoThousandThirtyMember2020-12-270000707549us-gaap:SeniorNotesMemberlrcx:OnePointNineZeroPercentSeniorNotesDueTwoThousandThirtyMember2020-06-280000707549lrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-12-270000707549lrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-06-280000707549lrcx:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandFortyNineMemberus-gaap:SeniorNotesMember2020-12-270000707549lrcx:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandFortyNineMemberus-gaap:SeniorNotesMember2020-06-280000707549us-gaap:SeniorNotesMemberlrcx:TwoPointEightSevenFivePercentSeniorNotesDueTwoThousandFiftyMember2020-12-270000707549us-gaap:SeniorNotesMemberlrcx:TwoPointEightSevenFivePercentSeniorNotesDueTwoThousandFiftyMember2020-06-280000707549lrcx:ThreePointOneTwoFivePercentSeniorNotesDueTwoThousandSixtyMemberus-gaap:SeniorNotesMember2020-12-270000707549lrcx:ThreePointOneTwoFivePercentSeniorNotesDueTwoThousandSixtyMemberus-gaap:SeniorNotesMember2020-06-280000707549lrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-06-292020-12-27utr:D0000707549lrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2012-06-300000707549srt:MaximumMemberlrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2012-06-012012-06-300000707549us-gaap:CallOptionMemberlrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-06-292020-12-270000707549lrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-09-282020-12-270000707549us-gaap:SubsequentEventMemberlrcx:ConversionofTwentyFortyOneNotesMemberlrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-09-282021-02-020000707549lrcx:PermanentEquityMemberlrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-12-270000707549lrcx:PermanentEquityMemberlrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-06-280000707549lrcx:TemporaryEquityMemberlrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-12-270000707549lrcx:TemporaryEquityMemberlrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2020-06-280000707549lrcx:TwoPointSixTwoFivePercentConvertibleSeniorNotesDueTwoThousandFortyOneMemberus-gaap:ConvertibleDebtMember2019-07-012020-06-280000707549us-gaap:SeniorNotesMemberlrcx:OnePointNineZeroPercentSeniorNotesDueTwoThousandThirtyMember2020-05-050000707549us-gaap:SeniorNotesMemberlrcx:TwoPointEightSevenFivePercentSeniorNotesDueTwoThousandFiftyMember2020-05-050000707549lrcx:ThreePointOneTwoFivePercentSeniorNotesDueTwoThousandSixtyMemberus-gaap:SeniorNotesMember2020-05-050000707549lrcx:ThreePointSevenFivePercentSeniorNotesDueTwoThousandTwentySixMemberus-gaap:SeniorNotesMember2019-03-040000707549us-gaap:SeniorNotesMemberlrcx:FourPointZeroPercentSeniorNotesDueTwoThousandTwentyNineMember2019-03-040000707549lrcx:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandFortyNineMemberus-gaap:SeniorNotesMember2019-03-040000707549lrcx:ThreePointEightZeroPercentSeniorNotesDueTwoThousandTwentyFiveMemberus-gaap:SeniorNotesMember2015-03-120000707549lrcx:TwoPointEightPercentSeniorNotesDueTwoThousandTwentyOneMemberus-gaap:SeniorNotesMember2016-06-070000707549us-gaap:SeniorNotesMember2020-06-292020-12-270000707549lrcx:TwoPointEightPercentSeniorNotesDueTwoThousandTwentyOneMemberus-gaap:SeniorNotesMember2020-06-292020-12-270000707549lrcx:TwoPointEightPercentSeniorNotesDueTwoThousandTwentyOneMember2020-06-292020-12-270000707549us-gaap:FairValueInputsLevel2Memberlrcx:TwoPointEightPercentSeniorNotesDueTwoThousandTwentyOneMember2020-12-270000707549lrcx:ThreePointEightZeroPercentSeniorNotesDueTwoThousandTwentyFiveMember2020-06-292020-12-270000707549lrcx:ThreePointEightZeroPercentSeniorNotesDueTwoThousandTwentyFiveMemberus-gaap:FairValueInputsLevel2Member2020-12-270000707549lrcx:ThreePointSevenFivePercentSeniorNotesDueTwoThousandTwentySixMember2020-06-292020-12-270000707549lrcx:ThreePointSevenFivePercentSeniorNotesDueTwoThousandTwentySixMemberus-gaap:FairValueInputsLevel2Member2020-12-270000707549lrcx:FourPointZeroPercentSeniorNotesDueTwoThousandTwentyNineMember2020-06-292020-12-270000707549us-gaap:FairValueInputsLevel2Memberlrcx:FourPointZeroPercentSeniorNotesDueTwoThousandTwentyNineMember2020-12-270000707549lrcx:OnePointNineZeroPercentSeniorNotesDueTwoThousandThirtyMember2020-06-292020-12-270000707549us-gaap:FairValueInputsLevel2Memberlrcx:OnePointNineZeroPercentSeniorNotesDueTwoThousandThirtyMember2020-12-270000707549lrcx:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandFortyNineMember2020-06-292020-12-270000707549us-gaap:FairValueInputsLevel2Memberlrcx:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandFortyNineMember2020-12-270000707549lrcx:TwoPointEightSevenFivePercentSeniorNotesDueTwoThousandFiftyMember2020-06-292020-12-270000707549us-gaap:FairValueInputsLevel2Memberlrcx:TwoPointEightSevenFivePercentSeniorNotesDueTwoThousandFiftyMember2020-12-270000707549lrcx:ThreePointOneTwoFivePercentSeniorNotesDueTwoThousandSixtyMember2020-06-292020-12-270000707549lrcx:ThreePointOneTwoFivePercentSeniorNotesDueTwoThousandSixtyMemberus-gaap:FairValueInputsLevel2Member2020-12-270000707549us-gaap:RevolvingCreditFacilityMember2019-02-250000707549us-gaap:RevolvingCreditFacilityMemberlrcx:FederalFundsRateMember2019-02-252019-02-250000707549us-gaap:RevolvingCreditFacilityMemberlrcx:OneMonthLiborMember2019-02-252019-02-250000707549us-gaap:RevolvingCreditFacilityMembersrt:MinimumMemberlrcx:OneMonthLiborMember2019-02-252019-02-250000707549us-gaap:RevolvingCreditFacilityMembersrt:MaximumMemberlrcx:OneMonthLiborMember2019-02-252019-02-250000707549us-gaap:RevolvingCreditFacilityMembersrt:MinimumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2019-02-252019-02-250000707549us-gaap:RevolvingCreditFacilityMembersrt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2019-02-252019-02-250000707549us-gaap:RevolvingCreditFacilityMember2020-12-270000707549us-gaap:CommercialPaperMember2017-11-130000707549us-gaap:CommercialPaperMember2020-12-270000707549us-gaap:CommercialPaperMember2020-06-280000707549lrcx:FremontAndLivermoreLeaseMember2020-09-210000707549lrcx:FinanceLeaseCashCollateralMember2020-12-270000707549srt:MaximumMemberlrcx:FremontAndLivermoreLeaseMember2020-12-270000707549us-gaap:StandbyLettersOfCreditMember2020-12-270000707549us-gaap:OtherNoncurrentLiabilitiesMember2020-12-270000707549lrcx:StockRepurchaseProgramMember2020-11-012020-11-300000707549lrcx:StockRepurchaseProgramMember2020-06-280000707549lrcx:StockRepurchaseProgramMember2020-06-292020-09-270000707549lrcx:StockRepurchaseProgramMember2020-09-270000707549lrcx:StockRepurchaseProgramMember2020-11-300000707549lrcx:StockRepurchaseProgramMember2020-09-282020-12-270000707549lrcx:StockRepurchaseProgramMember2020-12-270000707549us-gaap:AccumulatedTranslationAdjustmentMember2020-06-280000707549us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-06-280000707549us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-06-280000707549us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-280000707549us-gaap:AccumulatedTranslationAdjustmentMember2020-06-292020-12-270000707549us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-06-292020-12-270000707549us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-06-292020-12-270000707549us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-292020-12-270000707549us-gaap:AccumulatedTranslationAdjustmentMember2020-12-270000707549us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-270000707549us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-270000707549us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 27, 2020
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 0-12933 
___________________________________________________________
LAM RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
___________________________________________________________
Delaware 94-2634797
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
4650 Cushing Parkway,Fremont,California 94538
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (510) 572-0200
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.001 Per ShareLRCXThe Nasdaq Stock Market
(Nasdaq Global Select Market)
__________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of January 29, 2021, the Registrant had 142,908,315 shares of Common Stock outstanding.




LAM RESEARCH CORPORATION
TABLE OF CONTENTS
 
  Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1.    Financial Statements

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
Revenue$3,456,237 $2,583,501 $6,633,317 $4,749,247 
Cost of goods sold1,852,442 1,403,857 3,523,343 2,587,893 
Gross margin1,603,795 1,179,644 3,109,974 2,161,354 
Research and development375,172 318,861 730,539 605,688 
Selling, general, and administrative218,899 174,272 408,647 331,700 
Total operating expenses594,071 493,133 1,139,186 937,388 
Operating income1,009,724 686,511 1,970,788 1,223,966 
Other expense, net(29,941)(13,924)(68,733)(26,652)
Income before income taxes979,783 672,587 1,902,055 1,197,314 
Income tax expense(110,554)(158,077)(209,375)(217,015)
Net income$869,229 $514,510 $1,692,680 $980,299 
Net income per share:
Basic$6.04 $3.57 $11.71 $6.79 
Diluted$5.96 $3.43 $11.55 $6.52 
Number of shares used in per share calculations:
Basic143,830 143,987 144,549 144,330 
Diluted145,910 150,097 146,579 150,389 











See Notes to Condensed Consolidated Financial Statements

3



Table of Contents

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)

 
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
Net income$869,229 $514,510 $1,692,680 $980,299 
Other comprehensive income, net of tax:
Foreign currency translation adjustment21,808 7,511 33,932 (1,187)
Cash flow hedges:
Net unrealized gains during the period4,872 4,079 4,522 3,388 
Net losses reclassified into net income283 1,384 1,050 2,734 
5,155 5,463 5,572 6,122 
Available-for-sale investments:
Net unrealized losses during the period(644)(1,713)(2,044)(2,713)
Net losses reclassified into net income163 593 565 983 
(481)(1,120)(1,479)(1,730)
Defined benefit plans, net change in unrealized component64 459 60 578 
Other comprehensive income, net of tax26,546 12,313 38,085 3,783 
Comprehensive income $895,775 $526,823 $1,730,765 $984,082 
See Notes to Condensed Consolidated Financial Statements
4

Table of Contents

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 
December 27,
2020
June 28,
2020
(unaudited)(1)
ASSETS
Cash and cash equivalents$3,687,165 $4,915,172 
Investments2,355,067 1,795,080 
Accounts receivable, less allowance of $5,283 as of December 27, 2020, and $5,465 as of June 28, 2020
2,900,362 2,097,099 
Inventories2,348,955 1,900,024 
Prepaid expenses and other current assets176,403 146,160 
Total current assets11,467,952 10,853,535 
Property and equipment, net1,208,285 1,071,499 
Restricted cash and investments252,807 253,911 
Goodwill1,485,078 1,484,436 
Intangible assets, net156,090 168,532 
Other assets800,162 727,134 
Total assets$15,370,374 $14,559,047 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable$722,490 $592,387 
Accrued expenses and other current liabilities1,479,242 1,272,655 
Deferred profit556,474 457,523 
Current portion of long-term debt and finance lease obligations832,847 839,877 
Total current liabilities3,591,053 3,162,442 
Long-term debt and finance lease obligations, less current portion4,992,496 4,970,848 
Income taxes payable902,047 909,709 
Other long-term liabilities376,230 332,559 
Total liabilities9,861,826 9,375,558 
Commitments and contingencies
Temporary equity, convertible notes5,515 10,995 
Stockholders’ equity:
Preferred stock, at par value of $0.001 per share; authorized, 5,000 shares, none outstanding
  
Common stock, at par value of $0.001 per share; authorized, 400,000 shares as of December 27, 2020 and June 28, 2020; issued and outstanding, 143,205 shares at December 27, 2020, and 145,331 shares at June 28, 2020
143 145 
Additional paid-in capital6,854,681 6,695,858 
Treasury stock, at cost; 148,381 shares at December 27, 2020, and 145,432 shares at June 28,
2020
(14,135,555)(12,949,889)
Accumulated other comprehensive loss(56,126)(94,211)
Retained earnings12,839,890 11,520,591 
Total stockholders’ equity5,503,033 5,172,494 
Total liabilities and stockholders’ equity$15,370,374 $14,559,047 
(1) Derived from audited financial statements

See Notes to Condensed Consolidated Financial Statements
5

Table of Contents

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Six Months Ended
December 27,
2020
December 29,
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$1,692,680 $980,299 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization149,301 130,194 
Deferred income taxes(4,312)74,516 
Equity-based compensation expense108,097 88,630 
Amortization of note discounts and issuance costs2,839 3,250 
Other, net8,190 3,699 
Changes in operating assets and liabilities(969,647)(508,613)
Net cash provided by operating activities987,148 771,975 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and intangible assets(154,878)(101,310)
Purchases of available-for-sale securities(2,452,216)(1,619,695)
Maturities of available-for-sales securities1,289,006 952,327 
Sales of available-for-sale securities594,238 795,559 
Other, net(7,876)(10,528)
Net cash (used for) provided by investing activities(731,726)16,353 
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt(23,769)(46,952)
Treasury stock purchases(1,171,878)(1,083,199)
Dividends paid(355,056)(325,589)
Reissuance of treasury stock related to employee stock purchase plan41,434 38,447 
Proceeds from issuance of common stock13,646 4,501 
Other, net(1,179) 
Net cash used for financing activities(1,496,802)(1,412,792)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash12,269 862 
Net decrease in cash, cash equivalents, and restricted cash(1,229,111)(623,602)
Cash, cash equivalents, and restricted cash at beginning of period5,169,083 3,913,396 
Cash, cash equivalents, and restricted cash at end of period$3,939,972 $3,289,794 
Schedule of non-cash transactions:
Accrued payables for stock repurchases23,046 289 
Accrued payables for capital expenditures72,282 27,966 
Dividends payable186,611 163,510 
Transfers of inventory to property and equipment, net49,748 27,472 
Reconciliation of cash, cash equivalents, and restricted cashDecember 27,
2020
December 29,
2019
Cash and cash equivalents$3,687,165 $3,035,887 
Restricted cash and investments252,807 253,907 
Total cash, cash equivalents, and restricted cash$3,939,972 $3,289,794 
See Notes to Condensed Consolidated Financial Statements
6

Table of Contents

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended
December 27, 2020
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at September 27, 2020144,593 $145 $6,761,545 $(13,416,986)$(82,672)$12,157,153 $5,419,185 
Issuance of common stock100 — 8,108 — — — 8,108 
Purchase of treasury stock(1,796)(2)— (727,742)— — (727,744)
Reissuance of treasury stock207 — 32,261 9,173 — — 41,434 
Equity-based compensation expense— — 52,109 — — — 52,109 
Effect of conversion of convertible notes101 — (134)— — — (134)
Reclassification from temporary to permanent equity— — 792 — — — 792 
Net income— — — — — 869,229 869,229 
Other comprehensive income— — — — 26,546 — 26,546 
Cash dividends declared ($1.30 per common share)
— — — — — (186,492)(186,492)
Balance at December 27, 2020143,205 $143 $6,854,681 $(14,135,555)$(56,126)$12,839,890 $5,503,033 
Six Months Ended
December 27, 2020
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at June 28, 2020145,331 $145 $6,695,858 $(12,949,889)$(94,211)$11,520,591 $5,172,494 
Issuance of common stock205 — 13,646 — — — 13,646 
Purchase of treasury stock(3,156)(3)— (1,194,839)— — (1,194,842)
Reissuance of treasury stock207 — 32,261 9,173 — — 41,434 
Equity-based compensation expense— — 108,097 — — — 108,097 
Effect of conversion of convertible notes618 1 (661)— — — (660)
Reclassification from temporary to permanent equity— — 5,480 — — — 5,480 
Adoption of ASU 2018-18 1
— — — — — 1,157 1,157 
Net income— — — — — 1,692,680 1,692,680 
Other comprehensive income— — — — 38,085 — 38,085 
Cash dividends declared ($2.60 per common share)
— — — — — (374,538)(374,538)
Balance at December 27, 2020143,205 $143 $6,854,681 $(14,135,555)$(56,126)$12,839,890 $5,503,033 
(1) Refer to Note 2 - Recent Accounting Pronouncements for more information regarding this FASB Accounting Standard Updates.
See Notes to Condensed Consolidated Financial Statements
7

Table of Contents

Three Months Ended
December 29, 2019
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at September 29, 2019144,871 $145 $6,456,492 $(11,680,689)$(72,560)$10,233,005 $4,936,393 
Issuance of common stock72 — 632 — — — 632 
Purchase of treasury stock(3,242)(3)— (1,005,340)— — (1,005,343)
Reissuance of treasury stock296 — 25,710 12,737 — — 38,447 
Equity-based compensation expense— — 45,725 — — — 45,725 
Effect of conversion of convertible notes465 — (3,987)— — — (3,987)
Reclassification from temporary to permanent equity— — 4,249 — — — 4,249 
Net income— — — — — 514,510 514,510 
Other comprehensive income— — — — 12,313 — 12,313 
Cash dividends declared ($1.15 per common share)
— — — — — (163,510)(163,510)
Balance at December 29, 2019142,462 $142 $6,528,821 $(12,673,292)$(60,247)$10,584,005 $4,379,429 
Six Months Ended
December 29, 2019
Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Balance at June 30, 2019144,433 $144 $6,409,405 $(11,602,573)$(64,030)$9,930,919 $4,673,865 
Issuance of common stock183 — 4,501 — — — 4,501 
Purchase of treasury stock(3,639)(3)— (1,083,456)— — (1,083,459)
Reissuance of treasury stock296 — 25,710 12,737 — — 38,447 
Equity-based compensation expense— — 88,630 — — — 88,630 
Effect of conversion of convertible notes1,189 1 (10,560)— — — (10,559)
Reclassification from temporary to permanent equity— — 11,135 — — — 11,135 
Adoption of ASU 2016-02
— — — — — 3,018 3,018 
Net income— — — — — 980,299 980,299 
Other comprehensive income— — — — 3,783 — 3,783 
Cash dividends declared ($2.30 per common share)
— — — — — (330,231)(330,231)
Balance at December 29, 2019142,462 $142 $6,528,821 $(12,673,292)$(60,247)$10,584,005 $4,379,429 
See Notes to Condensed Consolidated Financial Statements
8

Table of Contents

LAM RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 27, 2020
(Unaudited)
NOTE 1 — BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of Lam Research Corporation (“Lam Research” or the “Company”) for the fiscal year ended June 28, 2020, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 28, 2020 (the “2020 Form 10-K”). The Company’s reports on Form 10-K, Form 10-Q and Form 8-K are available online at the Securities and Exchange Commission website on the Internet. The address of that site is www.sec.gov. The Company also posts its reports on Form 10-K, Form 10-Q and Form 8-K on its corporate website at http://investor.lamresearch.com. The content on any website referred to in this Form 10-Q is not a part of or incorporated by reference in this Form 10-Q unless expressly noted.
The condensed consolidated financial statements include the accounts of Lam Research and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s reporting period is a 52/53-week fiscal year. The Company’s current fiscal year will end June 27, 2021 and includes 52 weeks. The quarters ended December 27, 2020 (the “December 2020 quarter”) and December 29, 2019 (the “December 2019 quarter”) included 13 weeks.
NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments Credit Losses (Topic 326).” The amendment revises the impairment model to utilize an expected loss methodology in place of the previously used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including but not limited to, available for sale debt securities and accounts receivable. The FASB issued a subsequent amendment to the initial guidance in April 2019 and November 2019 within ASU 2019-04 and ASU 2019-11, respectively. The adoption of these standards in the first quarter of fiscal year 2021 did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
In November 2018, the FASB issued ASU 2018-18, “Collaborative Arrangements (Topic 808).” The amendment clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Topic 606 when the counterparty is a customer for a good or service that is a distinct unit of account. The amendment also precludes entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. The adoption of this standard in the first quarter of fiscal year 2021 did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, “ Reference Rate Reform (Topic 848),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modifications made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. The Company has not yet applied the relief afforded by these standard amendments and is currently assessing contracts that will require modification due to reference rate reform to which these standard amendments may be applied.
9


Table of Contents

Updates Not Yet Adopted or Effective

In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. ASU 2020-06 also eliminates the treasury stock method to calculate diluted earnings per share and requires the if-converted method. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is required to adopt this standard in the first quarter of fiscal year 2023. The update permits the use of either the modified retrospective or fully retrospective method of transition. The Company does not expect adoption of this standard to have a material impact on its Consolidated Financial Statements related to the Company’s existing 2041 Notes (as defined in Note 12 - Long-Term Debt and Other Borrowings ).
NOTE 3 — REVENUE
Deferred Revenue
Revenue of $83.8 million and $358.1 million included in deferred revenue at June 28, 2020 was recognized during the three and six months ended December 27, 2020.
The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of December 27, 2020 and when the Company expects to recognize the amounts as revenue:
Less than 1 Year1-3 YearsMore than 3 YearsTotal
(In thousands)
Deferred revenue$509,265 $130,327 
(1)
$ $639,592 
(1) This amount is reported in Deferred profit on the Company's Condensed Consolidated Balance Sheets as the customers can demand the liability to be performed at any time.
Disaggregation of Revenue
The Company operates in one reportable business segment: manufacturing and servicing of wafer processing semiconductor manufacturing equipment. The Company’s material operating segments qualify for aggregation due to their customer base and similarities in economic characteristics, nature of products and services, and processes for procurement, manufacturing, and distribution.
The Company operates in seven geographic regions: United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan. For geographical reporting, revenue is attributed to the geographic location in which the customers’ facilities are located. The Company serves three primary markets: memory, foundry, and logic/integrated device manufacturing.
The following table presents the Company’s revenues disaggregated between system and its customer support-related revenue:
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
(In thousands)
System revenue$2,307,421 $1,747,093 $4,455,662 $3,112,321 
Customer support-related revenue and other1,148,816 836,408 2,177,655 1,636,926 
$3,456,237 $2,583,501 $6,633,317 $4,749,247 
System revenue includes sales of new leading-edge equipment in deposition, etch and clean markets.
Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from the Company’s Reliant product line.
10


Table of Contents

The following table presents the Company’s revenues disaggregated by geographic region:
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
(In thousands)
China$1,208,185 $758,286 $2,382,854 $1,349,954 
Korea712,525 463,178 1,468,782 914,661 
Taiwan584,299 680,871 1,030,390 1,072,363 
Southeast Asia365,458 184,168 568,797 397,923 
Japan344,023 208,240 736,549 481,913 
United States137,492 223,725 275,384 407,384 
Europe104,255 65,033 170,561 125,049 
$3,456,237 $2,583,501 $6,633,317 $4,749,247 
The following table presents the percentages of leading- and non-leading-edge equipment and upgrade revenue to each of the primary markets the Company serves:
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
Memory68 %52 %63 %58 %
Foundry26 %36 %31 %31 %
Logic/integrated device manufacturing6 %12 %6 %11 %
NOTE 4 — EQUITY-BASED COMPENSATION PLANS
The Lam Research Corporation 2015 Stock Incentive Plan, as amended (the “2015 Plan”), provides for the grant of non-qualified equity-based awards of the Company’s Common Stock to eligible employees and non-employee directors, including stock options, restricted stock units (“RSUs”), and market-based performance RSUs (“market-based PRSUs”). An option is a right to purchase Common Stock at a set price. An RSU award is an agreement to issue a set number of shares of Common Stock at the time of vesting. The Company’s market-based PRSUs contain both a market condition and a service condition. The Company’s option, RSU, and market-based PRSU awards typically vest over a period of three years. The Company also has an employee stock purchase plan that allows employees to purchase its Common Stock at a discount through payroll deductions.
The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) and related income tax benefit in the Condensed Consolidated Statements of Operations:
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
(in thousands)
Equity-based compensation expense$52,109 $45,725 $108,097 $88,630 
Income tax benefit recognized related to equity-based compensation expense$9,911 $4,461 $19,788 $14,279 



11


Table of Contents

NOTE 5 — OTHER EXPENSE, NET
The significant components of other expense, net, are as follows:
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
(in thousands)
Interest income$4,796 $25,454 $11,755 $57,238 
Interest expense(52,551)(42,615)(104,666)(86,610)
Gains on deferred compensation plan-related assets, net24,207 14,129 37,134 13,693 
Foreign exchange losses, net(3,763)(2,287)(5,138)(2,816)
Other, net(2,630)(8,605)(7,818)(8,157)
$(29,941)$(13,924)$(68,733)$(26,652)
NOTE 6 — INCOME TAX EXPENSE
The Company’s provision for income taxes and effective tax rate are as follows:
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
(in thousands, except percentages)
Income tax expense$110,554 $158,077 $209,375 $217,015 
Effective tax rate11.3 %23.5 %11.0 %18.1 %
The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate for the three and six months ended December 27, 2020 and December 29, 2019 was primarily due to income in lower tax jurisdictions and a cumulative income tax benefit reversal due to a court ruling in the three and six months ended December 29, 2019.
The Internal Revenue Service (“IRS”) is examining the Company’s U.S. federal income tax return for the fiscal year ended June 24, 2018. As of December 27, 2020, no significant adjustments have been proposed by the IRS. The Company is unable to make a reasonable estimate as to when cash settlements, if any, with the IRS will occur.
The Company is in various stages of examinations in connection with all of its tax audits worldwide, and it is difficult to determine when these examinations will be settled. It is reasonably possible that over the next 12-month period the Company may experience an increase or decrease in its uncertain tax positions as a result of tax examinations or lapses of statutes of limitations. The change in uncertain tax positions as a result of lapses of statutes of limitations may range up to $9.1 million.
12


Table of Contents

NOTE 7 — NET INCOME PER SHARE
Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the treasury stock method, for dilutive stock options, restricted stock units, and convertible notes. Refer to Note 12 - Long-term Debt and Other Borrowings for additional information regarding the Company’s convertible notes. The following table reconciles the inputs to the basic and diluted computations for net income per share. 
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
(in thousands, except per share data)
Numerator:
Net income$869,229 $514,510 $1,692,680 $980,299 
Denominator:
Basic average shares outstanding143,830 143,987 144,549 144,330 
Effect of potential dilutive securities:
Employee stock plans1,293 1,528 1,202 1,359 
Convertible notes787 4,582 828 4,700 
Diluted average shares outstanding145,910 150,097 146,579 150,389 
Net income per share - basic$6.04 $3.57 $11.71 $6.79 
Net income per share - diluted$5.96 $3.43 $11.55 $6.52 

For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method. The following potentially dilutive securities were excluded:
Three Months EndedSix Months Ended
December 27,
2020
December 29,
2019
December 27,
2020
December 29,
2019
(in thousands)
Options and RSUs4 3 2 4 
NOTE 8 — FINANCIAL INSTRUMENTS
The Company maintains an investment portfolio of various holdings, types, and maturities. The Company’s mutual funds, which are related to the Company’s obligations under the deferred compensation plan, are classified as trading securities. Investments classified as trading securities are recorded at fair value based upon quoted market prices. Differences between the cost and fair value of trading securities are recognized as other expense, net in the Condensed Consolidated Statements of Operations. All of the Company’s other investments are classified as available-for-sale and consequently are recorded in the Condensed Consolidated Balance Sheets at fair value with unrealized gains or losses associated with market valuation changes, unrelated to credit losses, reported as a separate component of accumulated other comprehensive income (loss), net of tax; and credit losses, if any, recognized as other expense, net in the Condensed Consolidated Statements of Operations.
Fair Value
The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.
A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value. The level of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:
Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities with sufficient volume and frequency of transactions.
13


Table of Contents

Level 2: Valuations based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or model-derived valuations techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3: Valuations based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities and based on non-binding, broker-provided price quotes and may not have been corroborated by observable market data.
The Company’s primary financial instruments include its cash, cash equivalents, investments, restricted cash and investments, long-term investments, accounts receivable, accounts payable, long-term debt and leases, and foreign currency related derivative instruments. The estimated fair value of cash, accounts receivable, and accounts payable approximates their carrying value due to the short period of time to their maturities. Refer to Note 12 - Long-Term Debt and Other Borrowings for additional information regarding the fair value of the Company’s senior notes and convertible senior notes.
Investments
The following tables set forth the Company’s cash, cash equivalents, investments, restricted cash and investments, and other assets measured at fair value on a recurring basis as of December 27, 2020, and June 28, 2020:
December 27, 2020
(Reported Within)
CostUnrealized
Gain
Unrealized
(Loss)
Fair ValueCash and
Cash
Equivalents
InvestmentsRestricted
Cash &
Investments
Other
Assets
(in thousands)
Cash$1,148,170 $—