Lam Research, Texas Instruments earnings test AI demand and auto rebound

Lam Research and Texas Instruments sit at opposite ends of the chip industry, and their earnings calls on October 21 will be read as two separate tests. Lam sells deposition and etch tools—the machines that add and carve away thin layers on silicon wafers—and has already guided September-quarter revenue to $8.1 billion, plus or minus $400 million, while raising its 2026 forecast for wafer fab equipment spending to the low $150 billion range. Texas Instruments makes analog chips that handle real-world signals like power and temperature, plus embedded processors, and guided third-quarter revenue to $5.65 billion to $6.15 billion with EPS of $2.23 to $2.57.

The context for Lam is a supply chain that cannot build fast enough. Jim Cramer said on October 19 that CPUs are “going to be in very short supply” because Taiwan Semi can’t make all the ones they have, adding that “there’s tremendous demand, and there’s also an inability to build.” When chipmakers add factory capacity, they buy more deposition and etch tools from Lam, and Lam said the industry remains meaningfully undersupplied, with several new fabs expected to come online by the end of 2027. Lam also said in an August 26 Bloomberg Businessweek report that its advanced packaging business is growing more than 70% year over year.

Texas Instruments faces a different test. On its prior call, it said revenue rose 13% sequentially and 23% year over year, led by industrial, data center, and automotive customers, but management noted industrial revenue remains below its 2022 peak and customer inventories have not been rebuilt. Auto demand picked up, led by electric vehicles and hybrids in China. The fourth-quarter outlook is likely to carry more weight than the in-line consensus EPS estimate of $2.42, which falls inside the guided range.