Lam Research Corporation LRCX recently announced that Martin Anstice has resigned as the company’s chief executive officer (CEO). The resignation comes amid an investigation into allegations of his workplace misconduct.
The board did not look for any external candidate to take over the position of CEO. Tim Archer has assumed as the new CEO of the company, effective immediately. Mr. Archer, who remains the president of the company, has also been appointed to the Board of Directors of Lam Research.
Tim Archer had joined Lam Research in 2012, and was appointed as the president and COO of Lam Research in January 2018.
Following the news, shares of the company declined 6.4%. Notably, shares of Lam Research have lost 18.6% on a year-to-date basis compared with the industry’s decline of 13%.
More on the Headlines
Reportedly, Mr. Anstice’s resignation was due to the allegations against him for violating the company's code of conduct in the workplace. However, the alleged conduct did not involve financial misconduct. Moreover, he is not entitled to any kind of severance benefits.
Lam is still verifying the matter via investigation through a committee of independent directors. The independent directors have retained an external law firm to assist the investigation.
Lead independent director, Abhi Talwalkar said, “Lam Research takes all allegations of misconduct seriously”. This is well evident from the chipmaker’s acceptance of Anstice’s resignation.
Lam Research is doing well and continues to succeed in areas such as device architecture, process flow, as well as advanced packaging technology inflections. The company has been improving on its WFE market share significantly and expects to make robust gains in the near future.
Lam Research provided an optimistic long-term outlook in the last reported quarter. The rapid proliferation of next generation device and systems architectures, as well as expansion of the materials in chip design and manufacturing create compelling opportunities for the company’s etch and deposition expertise.
Moreover, management stated that Wafer Fab Equipment (WFE) expectations continue to grow slightly on a year-over-year basis in 2018. WFE is stronger in logic but slightly weaker in NAND and foundry.
Also, Lam Research stated that it is looking into 14 new fab projects in calendar 2019. Management expects first-half 2019 to be stronger than the second half of 2018.
The company is scheduled to report fiscal second-quarter results on Jan 23.
Zacks Rank & Key Picks
Currently, Lam Research carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include AMETEK, Inc. AME, QuinStreet, Inc. QNST and Stamps.com Inc. STMP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for AMETEK, QuinStreet and Stamps.com is currently pegged at 11.18%, 25% and 15%, respectively.
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