Market value: $28.1 billion
The prospects of an all-out trade war between China and the United States have terrified investors. They’ve been particularly haunting for technology investors because disputes about intellectual property have been particularly tense. In short, both countries have been increasingly hesitant to let the other have access to certain pieces of critical hardware.
Lam Research (LRCX, $171.32), however, may not be as vulnerable to the geopolitical spat as it might seem.
Moody’s Senior Vice President Richard Lane made the call in late June, flatly noting, “China’s tariffs and/or trade restrictions would have only a limited impact on Applied Materials Inc., Lam Research Corp. and KLA-Tencor Corp., since indigenous Chinese customers represent just 6%, or $1.8 billion, of their annual aggregate revenue.” Lane also said non-Chinese customers will drive plenty of revenue for these outfits for the foreseeable future.
Lam Research, by the way, isn’t so much a technology maker as it is a company that allows more conventional tech companies make their wares. Its wafer fabrication equipment, for instance, allows chipmakers such as Intel (INTC) and Advanced Micro Devices (AMD) to make ever-better computing solutions.
It’s still subject to the cyclical nature of technology, but much less so than other technology players. The race among chipmakers to offer the fastest, smallest chips never really stops, setting the stage for consistent revenue.