Lam Research Corp. (NASDAQ:LRCX)

The property, plant, and equipment data over the six-year period exhibits several notable trends in asset composition, valuation, and depreciation.

Manufacturing and engineering equipment

This category shows consistent growth year over year, starting at approximately $1.04 billion in mid-2019 and rising steadily to nearly $1.96 billion by mid-2024. The increase indicates ongoing investment in core equipment, reflecting expansion or modernization efforts.

Buildings and improvements

Values remain relatively stable from 2019 through 2020 but then rise sharply from $660.9 million in 2020 to around $1.61 billion by 2024. This marked increase suggests significant capital projects or acquisitions in property infrastructure.

Computer and computer-related equipment

There is a slight decrease from about $191.0 million in 2019 to approximately $179.0 million in 2024, with minor fluctuations across the years. This modest decline may indicate controlled spending or a shift in technology strategy.

Land

The value of land assets increases progressively, with a notable acceleration between 2023 and 2024 where it nearly doubles from $98.7 million to $163.8 million. This could reflect new land acquisitions or revaluations.

Office equipment, furniture, and fixtures

Values fluctuate but generally display a gradual increase from $82.1 million in 2019 to $85.6 million in 2024, suggesting stable investment in supporting assets that do not experience significant scaling.

Property and equipment, gross

The aggregate gross value rises steadily from roughly $2.02 billion in 2019 to about $3.99 billion in 2024, underscoring a strong growth trend in total fixed asset investments over the period.

Accumulated depreciation and amortization

The accumulated depreciation shows a consistent increase in magnitude (negative values), moving from -$963.7 million in 2019 to -$1.86 billion in 2024. This reflects the aging of assets and the ongoing allocation of their costs over time.

Property and equipment, net

The net book value of property and equipment rises from approximately $1.06 billion in 2019 to around $2.13 billion in 2024, indicating that asset additions and capital expenditures outpace depreciation expenses significantly. The largest growth is observed after 2021, suggesting a period of accelerated capital investment.

Overall, the data demonstrates a deliberate and substantial expansion in physical capital assets, marked by considerable investments in manufacturing equipment, buildings, and land. Depreciation trends align with asset aging but are overshadowed by the net increases in asset base, which may point to strategic capacity enhancements and modernization efforts.

The analysis of the property, plant, and equipment data reveals several stable and evolving trends over the reported periods.

Average Age Ratio (%):

The average age ratio shows minor fluctuations, increasing from 48.75% in mid-2019 to a peak of 52.13% in mid-2020, followed by a gradual decrease to 48.62% by mid-2024. This indicates a slight aging of the asset base initially, with a subsequent trend toward a relatively younger or refreshed asset portfolio in the later periods.

Estimated Total Useful Life (in years):

The useful life estimate begins at 11 years in 2019, dips to 10 years in 2020, and then incrementally increases to 13 years by 2024. This suggests a reassessment of asset longevity over time, possibly due to improvements in maintenance, technological upgrades, or changes in asset composition that extend expected service duration.

Estimated Age, Time Elapsed Since Purchase (in years):

This measure remains relatively constant, moving slightly from 5 years in 2019 and 2020 to 6 years from 2021 through 2024. This stability implies that while assets are aging, acquisitions or disposals are balanced enough to maintain a consistent average age among the equipment.

Estimated Remaining Life (in years):

The remaining life fluctuates moderately: starting at 6 years in 2019, decreasing briefly to 5 years in 2020 and 2021, then increasing back to 6 years in 2022 and 2023, and further rising to 7 years by 2024. The increase in remaining life aligns with the upward trend in total useful life estimates, reflecting either extended asset viability or investment in newer assets extending the fleet's service horizon.

Overall, the data suggests a balanced approach to asset management, with consideration for extending asset useful life and maintaining a stable average asset age. This combination may contribute to an optimized asset base, balancing current usage with future operational capacity.

The financial data of property, plant, and equipment reveals several notable trends over the six-year period ending in June 2024.

Accumulated depreciation and amortization, excluding finance right-of-use assets

The accumulated depreciation and amortization has shown a consistent upward trend, increasing from approximately $963.7 million in 2019 to $1.86 billion in 2024. This steady increase suggests a continuous aging of the asset base and ongoing depreciation expenses, reflecting sustained asset utilization over time.

Property and equipment, gross, excluding finance right-of-use assets

Gross property and equipment values have also risen significantly, from around $2.02 billion in 2019 to roughly $3.99 billion in 2024. This indicates ongoing investment in property and equipment, with the company expanding or upgrading its asset base substantially, nearly doubling the gross book value over the period.

Land

The carrying value of land has increased notably, from about $46.2 million in 2019 to approximately $163.8 million in 2024. The marked rise, especially visible in the last year, suggests significant land acquisitions or revaluations, which may underpin expansion strategies or strategic asset positioning.

Average age ratio

The average age ratio, expressed as a percentage, has remained relatively stable over the years, fluctuating narrowly between 48.62% and 52.13%. This stability indicates a balanced approach to asset renewal and retention, where new acquisitions and disposals tend to maintain a consistent age profile of the overall property, plant, and equipment portfolio.

Overall, the data reflects a pattern of sustained capital investment accompanied by regular depreciation. The growth in gross property and equipment, together with rising accumulated depreciation, points to an expanding asset base that is being actively managed over time. The stability in the average age ratio further implies deliberate asset lifecycle management to sustain operational efficiency and asset utilization.

Gross Property and Equipment

The gross value of property and equipment, excluding finance right-of-use assets, demonstrates a consistent upward trend over the six-year period. Starting at approximately $2.02 billion in mid-2019, the figure rises steadily each year, reaching nearly $4.0 billion by mid-2024. This reflects significant and continuous capital investment or acquisitions in property and equipment assets.

Land

The value of land holdings exhibits notable growth, beginning at about $46.2 million in mid-2019 and increasing gradually through 2022. After this period of moderate growth, a more substantial increase occurs between mid-2023 and mid-2024, where the land value jumps sharply to approximately $164 million. This suggests possible strategic land acquisitions or revaluations in the most recent year.

Depreciation Expense

Depreciation expense, excluding amortization of finance lease right-of-use assets, follows an increasing trajectory consistent with the growth in gross property and equipment. From $182.1 million in 2019, it rises each year, reaching $299 million by 2024. The increase in depreciation expense aligns with the expansion of the asset base and potentially reflects the aging of assets and additions to depreciable property.

Estimated Total Useful Life

The estimated total useful life of the property and equipment has slightly increased over the period, starting at 11 years in 2019, dipping briefly to 10 years in 2020, then increasing to 13 years by 2024. This gradual extension in estimated useful life may indicate management's reassessment of asset longevity or the incorporation of assets with longer useful lives in the portfolio.

Accumulated Depreciation and Amortization

Over the six-year period ending June 30, 2024, accumulated depreciation and amortization increased consistently each year. The value rose from approximately $963.7 million in June 2019 to about $1.86 billion in June 2024. This steady growth indicates ongoing recognition of asset consumption, reflecting either substantial fixed asset investments depreciating over time or a policy of consistent depreciation.

Depreciation Expense

The annual depreciation expense shows a clear upward trend, growing from $182.1 million in the year ending June 2019 to $299 million in the year ending June 2024. The increase in depreciation expense suggests either capital expenditures on new property, plant, and equipment assets, shorter asset useful lives, or adjustments in depreciation methods, which are causing higher annual charges.

Time Elapsed Since Purchase

The reported time elapsed since purchase remains relatively stable around 5 to 6 years, indicating that the asset base's average age is constant. Despite increases in accumulated depreciation and yearly depreciation expense, the average age of the assets has not increased significantly, which could imply ongoing replacement or acquisition of new assets balanced against asset retirements.

Summary of Observations

The data reflects a company managing an aging yet consistently depreciating asset base, with increased annual depreciation indicative of asset base growth or accelerated depreciation. The stable average asset age, combined with rising accumulated depreciation, implies continuous investment in fixed assets alongside systematic asset retirement or disposal. These trends demonstrate a dynamic fixed asset management strategy with a clear focus on renewal and sustained capital asset expenses.

Property and Equipment, Net (Excluding Finance Right-of-Use Assets)

The net value of property and equipment has shown a consistent upward trend over the analyzed periods. Starting at approximately 1,059 million USD in mid-2019, the figure remained relatively stable through 2020 but experienced substantial growth in 2021, increasing to around 1,259 million USD. This positive momentum continued with further significant gains in 2022 and 2023, reaching nearly 2,130 million USD by mid-2024. The increase suggests ongoing investment or capital expenditure in fixed assets, reflecting expansion or modernization efforts.

Land

The value attributed to land assets has also risen steadily. The amount increased from about 46 million USD in 2019 to close to 59 million USD in 2020, then jumped substantially to 85 million USD in 2021. After a slight stabilization in 2022, the upward trajectory resumed, culminating in a sharp increase to approximately 164 million USD by 2024. This pattern indicates land acquisition or revaluation activities, contributing to the overall asset base growth.

Depreciation Expense (Excluding Amortization of Finance Lease Right-of-Use Assets)

Depreciation expense has risen continuously throughout the period, starting from around 182 million USD in 2019 and reaching close to 299 million USD in 2024. The increase is consistent with the growth in property and equipment assets, as the higher asset base naturally results in larger depreciation charges. This increasing trend in depreciation expense reflects both expanding capital assets and potentially the aging of existing assets requiring regular depreciation recognition.

Estimated Remaining Life

The estimated remaining useful life of the property and equipment assets remained relatively stable, fluctuating between 5 and 7 years. This stability implies no significant shift in asset composition or accelerated depreciation policies during the timeframe. The consistent lifespans complement the increase in depreciable asset value.