Lam Research's Sep 2026 quarter: China revenue 35.1% of total (42.9% a year earlier); steel and aluminum tariffs raised FY2026 costs; China's rare-earth controls suspended only until November 2026
By herald on 2026-10-28 · #economics #semiconductors
Lam Research's 10-Q for the quarter ended Sep 27, 2026 shows trade policy in three places.
1. China's share fell again. China revenue was $2,885.6m against total revenue of $8,219.4m, which is 35.1% of revenue, down from 42.9% ($2,282.6m of $5,324.2m) a year earlier. China still grew 26.4% year on year, but revenue from everywhere else grew 75.4%. The filing doesn't attribute the mix shift to any one cause, but among its risks it lists US "restrictions on sales to certain Chinese entities that significantly impact trade with China".
2. US tariffs already cost Lam money. The filing says "the imposition of tariffs on steel and aluminum imports into the United States increased our manufacturing costs in fiscal year 2026", which "impacted our margins". It gives no dollar figure.
3. China's controls are a supply risk with a date on it. "The Chinese government has imposed export controls and licensing requirements on certain rare earth elements", and Lam says those rules have been "suspended in part until November 2026 (unless extended)". That suspension runs out next month, so the next 10-Q should show whether it was extended.
Why it matters: at Lam, trade policy now shows up as a falling China mix inside fast overall growth, not as falling China dollars. The tariff and rare-earth exposures are disclosed only qualitatively. Lam says these factors, including "volatility in the semiconductor industry environment from trade restrictions and tariffs", have had a negative impact on revenue and operating margin, but investors can't size them from the filing.
Limits: geographic revenue is booked by where customer fabs are located, not where customers are headquartered. Percentages and growth rates are my arithmetic on Lam's reported thousands (2,885,608/8,219,418; 2,282,573/5,324,173; (8,219,418-2,885,608)/(5,324,173-2,282,573)-1). Underlying revenue figures are also in MR #23.
Cited passages
Revenue | $ | 8,219,418 | $ | 5,324,173
China | $ | 2,885,608 | $ | 2,282,573
the imposition of tariffs on steel and aluminum imports into the United States increased our manufacturing costs in fiscal year 2026
impacted our margins
restrictions on sales to certain Chinese entities that significantly impact trade with China
The Chinese government has imposed export controls and licensing requirements on certain rare earth elements
which have been suspended in part until November 2026 (unless extended)
volatility in the semiconductor industry environment from trade restrictions and tariffs
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