Home > Comparison > Technology > LRCX vs SWKS
The strategic rivalry between Lam Research Corporation and Skyworks Solutions, Inc. shapes the semiconductor industry’s evolution. Lam Research operates as a capital-intensive equipment manufacturer, while Skyworks focuses on high-margin semiconductor components. This contrast highlights a battle between industrial scale and product specialization. My analysis will determine which company’s trajectory offers superior risk-adjusted returns, guiding investors seeking optimal exposure within this critical technology sector.
Table of contents
Companies Overview
Lam Research Corporation and Skyworks Solutions, Inc. hold pivotal roles in the semiconductor market with distinct value propositions.
Lam Research Corporation: Semiconductor Equipment Innovator
Lam Research Corporation dominates semiconductor fabrication equipment with advanced systems for film deposition, etching, and wafer cleaning. Its revenue stems from selling and servicing high-tech machinery critical to integrated circuit manufacturing. In 2026, Lam focuses on refining plasma-enhanced CVD and atomic layer deposition technologies to maintain its technological edge and global footprint.
Skyworks Solutions, Inc.: Semiconductor Component Specialist
Skyworks Solutions, Inc. excels in proprietary semiconductor components like amplifiers, filters, and front-end modules for wireless and automotive sectors. It generates revenue by designing and marketing a broad product portfolio aimed at communication and consumer electronics. In 2026, Skyworks prioritizes expanding its intellectual property and penetrating automotive and IoT markets globally.
Strategic Collision: Similarities & Divergences
Lam Research and Skyworks Solutions pursue complementary but distinct semiconductor niches—equipment manufacturing versus component production. Both compete indirectly by targeting semiconductor supply chain leadership. Their battleground lies in innovation and market adaptation rather than direct product overlap. Lam offers capital-intensive machinery exposure, whereas Skyworks presents diversified component-driven revenue, shaping fundamentally different investment profiles.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Lam Research Corporation (LRCX) | Skyworks Solutions, Inc. (SWKS) |
|---|---|---|
| Revenue | 18.4B | 4.1B |
| Cost of Revenue | 9.5B | 2.4B |
| Operating Expenses | 3.1B | 1.2B |
| Gross Profit | 9.0B | 1.7B |
| EBITDA | 6.3B | 1.0B |
| EBIT | 6.0B | 554M |
| Interest Expense | 178M | 27M |
| Net Income | 5.4B | 477M |
| EPS | 4.17 | 3.09 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company runs a more efficient and profitable corporate engine through recent market cycles.
Lam Research Corporation Analysis
Lam Research grew revenue by 23.7% in 2025 to $18.4B, with net income surging 40% to $5.4B. Its gross margin holds strong at 48.7%, while the net margin expanded to 29.1%, signaling robust profitability. The company’s operating expenses rose proportionally, maintaining efficiency and momentum in the latest fiscal year.
Skyworks Solutions, Inc. Analysis
Skyworks Solutions saw revenue decline 2.2% to $4.1B in 2025, with net income dropping 20% to $477M. Gross margin contracted to 41.2%, and net margin shrank to 11.7%, reflecting margin pressure. The company struggles with negative growth trends across key metrics, indicating weakening operational efficiency over the past year.
Margin Strength vs. Growth Momentum
Lam Research outperforms Skyworks with superior revenue growth, expanding margins, and rising net income. Lam’s operating efficiency and profitability clearly lead the sector benchmark. Conversely, Skyworks faces declining sales and shrinking profits, posing risks for investors seeking growth. Lam’s profile suits those valuing strong, sustained earnings power.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency for Lam Research Corporation and Skyworks Solutions, Inc.:
| Ratios | Lam Research (LRCX) | Skyworks Solutions (SWKS) |
|---|---|---|
| ROE | 54.3% | 8.3% |
| ROIC | 34.0% | 6.4% |
| P/E | 23.4x | 25.0x |
| P/B | 12.7x | 2.1x |
| Current Ratio | 2.21 | 2.33 |
| Quick Ratio | 1.55 | 1.76 |
| D/E (Debt-to-Equity) | 0.48 | 0.21 |
| Debt-to-Assets | 22.3% | 15.2% |
| Interest Coverage | 33.1x | 18.5x |
| Asset Turnover | 0.86 | 0.52 |
| Fixed Asset Turnover | 7.59 | 2.95 |
| Payout Ratio | 21.5% | 90.7% |
| Dividend Yield | 0.92% | 3.63% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Ratios act as a company’s DNA, revealing hidden risks and operational excellence through profitability, valuation, and financial health signals.
Lam Research Corporation
Lam Research exhibits robust profitability with a 54.3% ROE and a 29.1% net margin, signaling strong operational efficiency. Its P/E ratio of 23.4 is neutral, but a high P/B of 12.7 suggests stretched valuation. Shareholders see modest 0.9% dividends, balancing returns with steady reinvestment in R&D.
Skyworks Solutions, Inc.
Skyworks posts a lower 8.3% ROE and an 11.7% net margin, reflecting modest profitability. Its P/E near 25 is neutral, supported by a reasonable P/B of 2.1. The company rewards investors with a 3.6% dividend yield, indicating a focus on shareholder income alongside moderate growth investments.
Premium Valuation vs. Operational Safety
Lam Research offers superior profitability but at a higher valuation premium, reflecting operational excellence yet some valuation risk. Skyworks provides steadier dividends and a more moderate valuation, fitting investors seeking income and stable capital preservation. Lam suits growth-focused profiles; Skyworks appeals to income-oriented investors.
Which one offers the Superior Shareholder Reward?
I compare Lam Research (LRCX) and Skyworks Solutions (SWKS) on dividends, payout ratios, and buybacks. LRCX yields ~0.9%, payout ~21%, with robust FCF coverage near 3.2x. SWKS offers a higher yield at ~3.6% but pays out 91% of earnings, risking sustainability. Both run share buybacks, but LRCX’s moderate payout and strong FCF signal a balanced distribution and reinvestment strategy. SWKS’s aggressive payout limits flexibility despite attractive yields. I conclude LRCX provides a superior total return profile in 2026, blending income with prudent capital allocation.
Comparative Score Analysis: The Strategic Profile
The radar chart below reveals the fundamental DNA and trade-offs between Lam Research Corporation and Skyworks Solutions, Inc., highlighting their core financial strengths and weaknesses:
Lam Research excels in profitability with top ROE and ROA scores (5 each), signaling highly efficient asset and equity utilization. Skyworks shows a more balanced financial profile, boasting a stronger DCF score (4 vs. 3) and healthier debt-to-equity (3 vs. 2), indicating better valuation and leverage management. However, Lam Research’s very low price-to-book score (1) signals potential overvaluation or asset concerns, while Skyworks maintains moderate valuation metrics. Overall, Skyworks presents a steadier balance, whereas Lam Research relies heavily on operational efficiency as its competitive edge.
Bankruptcy Risk: Solvency Showdown
Lam Research’s Altman Z-Score of 21.2 vastly outpaces Skyworks’ 4.5, both well within the safe zone:
This large delta implies Lam Research is currently in a far stronger position to weather economic downturns. Skyworks remains solvent but faces more moderate risk. In this cycle, Lam Research’s financial stability offers superior long-term survival confidence.
Financial Health: Quality of Operations
Lam Research scores an 8 on the Piotroski F-Score, edging Skyworks’ 7 in financial health and operational quality:
Both firms demonstrate strong fundamentals, yet Lam Research’s near-peak score reflects more robust profitability, liquidity, and efficiency metrics. Skyworks, while strong, may have subtle internal red flags compared to Lam, warranting cautious monitoring.
How are the two companies positioned?
This section dissects the operational DNA of Lam Research and Skyworks by comparing their revenue distribution and internal dynamics. The goal is to confront their economic moats and identify which business model delivers the most resilient and sustainable competitive advantage in today’s market.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Lam Research Corporation and Skyworks Solutions diversify their income streams and where their primary sector bets lie:
Lam Research anchors its revenue around two segments: System and Customer Support, with System revenues reaching $11.5B in 2025. This mix shows a balanced approach but leans on infrastructure dominance. Skyworks Solutions lacks available data, preventing comparison. Lam’s dual-segment focus reduces concentration risk, contrasting with peers who rely heavily on a single segment. Its strategy pivots on ecosystem lock-in through both product sales and ongoing support services.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Lam Research Corporation and Skyworks Solutions, Inc.:
Lam Research Corporation Strengths
- High net margin at 29.06%
- Strong ROE at 54.33%
- ROIC well above WACC at 34.0%
- Robust current and quick ratios above 1.5
- Diversified revenue from Systems and Customer Support
- Significant global presence with strong Asia and US sales
Skyworks Solutions, Inc. Strengths
Lam Research Corporation Weaknesses
- WACC higher than ROIC at 12.09% indicating capital cost pressure
- High price-to-book ratio at 12.69 signals valuation risk
- Relatively low dividend yield at 0.92%
- Asset turnover neutral at 0.86
Skyworks Solutions, Inc. Weaknesses
- Low ROE at 8.29% below sector norms
- ROIC barely above 6% indicating weak capital efficiency
- Neutral asset and fixed asset turnover ratios
- Less diversified revenue, heavy reliance on US market
Lam Research excels in profitability and global diversification but faces capital cost and valuation risks. Skyworks shows stable liquidity and dividend yield but struggles with profitability and geographic concentration. These factors shape each company’s strategic priorities.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competitive erosion in dynamic industries:
Lam Research Corporation: Precision Engineering Moat
Lam Research dominates through advanced semiconductor equipment technology, showcasing a robust moat via a 32% EBIT margin and 22% ROIC premium over WACC. Its expanding wafer fabrication solutions signal deepening moat strength in 2026.
Skyworks Solutions, Inc.: Product Portfolio Moat
Skyworks leverages proprietary analog semiconductor designs but struggles with declining profitability and a shrinking 3% ROIC deficit versus WACC. Its narrower moat faces pressure amid market shifts and revenue contraction.
Verdict: Technological Dominance vs. Product Specialization
Lam Research’s superior ROIC and margin stability confirm a wider, more durable moat than Skyworks. Lam is better positioned to defend and grow its market share amid semiconductor capital intensity.
Which stock offers better returns?
The past year shows Lam Research’s stock surging sharply, while Skyworks Solutions declines notably, with clear divergence in trading momentum and volume dominance.
Trend Comparison
Lam Research’s stock rose 161% over the past year, showing an accelerating bullish trend with high volatility, hitting a peak of 237.5 from a low of 59.09.
Skyworks Solutions’ stock fell 45% over the same period, displaying a decelerating bearish trend with moderate volatility, dropping from a high of 116.18 to a low near 52.78.
Lam Research outperformed Skyworks significantly, delivering the highest market returns and stronger buyer dominance throughout the year.
Target Prices
Analysts present a mixed but optimistic consensus for Lam Research and a cautious outlook for Skyworks Solutions.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Lam Research Corporation | 127 | 325 | 266.76 |
| Skyworks Solutions, Inc. | 60 | 140 | 78.8 |
Lam Research’s consensus target of 267 suggests upside from the current 238 price, reflecting confidence in its semiconductor equipment leadership. Skyworks’ target near 79 indicates moderate growth potential, though its current price of 57 implies more conservative estimates.
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How do institutions grade them?
Institutional grades for Lam Research Corporation and Skyworks Solutions, Inc. are summarized below:
Lam Research Corporation Grades
The latest grades from recognized financial institutions for Lam Research Corporation are:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Buy | 2026-01-29 |
| Wells Fargo | Maintain | Overweight | 2026-01-29 |
| JP Morgan | Maintain | Overweight | 2026-01-29 |
| RBC Capital | Maintain | Outperform | 2026-01-29 |
| Citigroup | Maintain | Buy | 2026-01-29 |
| Stifel | Maintain | Buy | 2026-01-29 |
| Morgan Stanley | Maintain | Equal Weight | 2026-01-29 |
| Needham | Maintain | Buy | 2026-01-29 |
| Susquehanna | Maintain | Positive | 2026-01-29 |
| Goldman Sachs | Maintain | Buy | 2026-01-29 |
Skyworks Solutions, Inc. Grades
The latest grades from recognized financial institutions for Skyworks Solutions, Inc. are:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Equal Weight | 2026-02-02 |
| Mizuho | Maintain | Neutral | 2026-01-26 |
| B. Riley Securities | Maintain | Neutral | 2026-01-26 |
| Susquehanna | Maintain | Neutral | 2026-01-22 |
| UBS | Maintain | Neutral | 2026-01-20 |
| Mizuho | Upgrade | Neutral | 2025-11-11 |
| UBS | Maintain | Neutral | 2025-11-05 |
| JP Morgan | Maintain | Neutral | 2025-11-05 |
| Keybanc | Upgrade | Overweight | 2025-10-29 |
| Citigroup | Upgrade | Neutral | 2025-10-29 |
Which company has the best grades?
Lam Research Corporation consistently receives stronger grades than Skyworks Solutions, including multiple Buy, Overweight, and Outperform ratings. This suggests greater institutional confidence in Lam Research’s outlook, which may influence investor sentiment and portfolio positioning accordingly.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Lam Research Corporation
- Operates in highly cyclical semiconductor equipment market; intense competition from global peers.
Skyworks Solutions, Inc.
- Faces fierce competition in diverse semiconductor components; market share sensitive to smartphone demand.
2. Capital Structure & Debt
Lam Research Corporation
- Moderate leverage with D/E at 0.48; strong interest coverage (33.43x) signals healthy debt servicing.
Skyworks Solutions, Inc.
- Lower leverage with D/E at 0.21; solid interest coverage (20.44x) but less asset efficiency.
3. Stock Volatility
Lam Research Corporation
- Beta of 1.78 indicates higher price swings, reflecting semiconductor cyclicality.
Skyworks Solutions, Inc.
- Beta of 1.32 suggests moderate volatility, lower than Lam but still above market average.
4. Regulatory & Legal
Lam Research Corporation
- Exposed to export controls and IP regulations affecting semiconductor manufacturing tech.
Skyworks Solutions, Inc.
- Faces regulatory scrutiny on global sales and compliance in key markets like China and US.
5. Supply Chain & Operations
Lam Research Corporation
- Relies on complex global supply chains; semiconductor shortages can delay equipment delivery.
Skyworks Solutions, Inc.
- Supply chain risk due to diversified product lines and reliance on Asian manufacturing hubs.
6. ESG & Climate Transition
Lam Research Corporation
- Increasing pressure to reduce energy use in manufacturing; advancing sustainability in capital goods.
Skyworks Solutions, Inc.
- ESG initiatives growing but challenged by energy consumption in chip production and materials sourcing.
7. Geopolitical Exposure
Lam Research Corporation
- Significant exposure to US-China tensions affecting sales and supply chains.
Skyworks Solutions, Inc.
- Also vulnerable to geopolitical tensions; diversified geographic sales partially mitigate risks.
Which company shows a better risk-adjusted profile?
Lam Research’s most impactful risk is cyclical market volatility amplified by a high beta, challenging its stock stability. Skyworks’ principal risk lies in competitive pressures coupled with moderate profitability and operational complexity. Despite Lam’s higher stock volatility, its robust financial health and superior returns on capital offer a stronger risk-adjusted profile. Skyworks’ lower leverage and dividend yield provide income appeal but less growth resilience. The recent strong Altman Z-Score (21.2) and Piotroski score (8) for Lam underscore its solidity, justifying confidence despite market swings.
Final Verdict: Which stock to choose?
Lam Research Corporation’s superpower lies in its durable competitive advantage driven by a growing ROIC well above its cost of capital. It efficiently converts invested capital into strong returns, fueling consistent growth. A point of vigilance is its relatively high price-to-book ratio, which could temper valuation appeal. This stock suits an aggressive growth portfolio seeking industry leadership.
Skyworks Solutions, Inc. offers a strategic moat through its strong balance sheet and recurring free cash flows, supported by a healthy dividend yield. Compared to Lam Research, it presents a safer profile with moderate leverage and a more reasonable valuation. Its recent income and profitability trends suggest caution. It fits well in a GARP (Growth at a Reasonable Price) portfolio.
If you prioritize robust value creation and sustained profitability, Lam Research outshines as the compelling choice due to its strong economic moat and accelerating stock momentum. However, if you seek better stability and income with a defensive stance, Skyworks offers a safer profile despite its recent earnings challenges. Both scenarios demand careful risk assessment aligned with your investment horizon.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Lam Research Corporation and Skyworks Solutions, Inc. to enhance your investment decisions:
