exv99w1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Lam Research Corporation Contact:
Kathleen Bela, Investor Relations, phone: 510/572-4566, e-mail: kathleen.bela@lamrc.com

Lam Research Corporation Announces Earnings for the Quarter Ended June 27, 2004

FREMONT, Calif., July 21, 2004—Lam Research Corporation (Nasdaq: LRCX) today announced earnings for the quarter ended June 27, 2004. Revenue for the period was $329.6 million, and net income was $52.7 million, or $0.38 per diluted share, compared to revenue of $231.1 million and net income of $19.2 million, or $0.13 per diluted share, for the March 2004 quarter. Gross margin and operating expenses for the June 2004 quarter were $159.2 million and $90.7 million, respectively.

The Company believes the presentation of ongoing results, which excludes certain special items, is useful for analyzing ongoing business trends. This presentation removes the effects of CMP impairment charges, net gains associated with the early retirement of the Company’s 4% notes and the related interest rate swap, and prior period expense recognition connected with the Company’s outsourcing strategy and consolidation. Tables that provide reconciliations of ongoing performance to results under U.S. Generally Accepted Accounting Principles (GAAP) are included at the end of this press release.

Ongoing net income increased by 159 percent, driven by sequential revenue growth in excess of 42 percent combined with the leverage from the Company’s business model. Ongoing gross margin for the June 2004 quarter was 49 percent of revenue due to volume growth, continued expense control, and improved utilization of factory and field resources. In the period, ongoing operating expenses increased to $90.1 million, primarily due to planned increases in variable compensation and investments in information systems. Ongoing net income of $51.5 million, or $0.37 per diluted share, in the June 2004 quarter compares with ongoing net income of $19.9 million, or $0.14 per diluted share, for the previous quarter.

~more~


Lam Announces Earnings for the June 2004 Quarter		Page 2 of 6

Continued growth in capital investment by semiconductor manufacturers resulted in new orders of $408 million, which represent a 17 percent increase over the prior period. The geographic distribution of new orders as well as revenue is shown in the following table:


Region	New Orders			Revenue
North America		18	%		14	%
Europe		10	%		16	%
Japan		10	%		12	%
Asia Pacific		62	%		58	%

Cash, short-term investments and restricted cash balances totaled $541.9 million at the end of June. Earnings leverage and the Company’s continuing focus on working capital management generated cash flow from operating activities of approximately $82 million during the quarter. As planned, the Company settled its interest rate swap and repaid its 4% convertible notes in June 2004, two years prior to maturity, resulting in a net cash outlay of $292.1 million. Deferred revenue and profit balances were $196.9 million and $108.4 million, respectively, and backlog was $402.9 million at the end of the quarter.

“The June quarter’s financial results clearly indicate that our business model delivers the performance that we predicted, and this model will maximize our profit and cash generation over the course of an entire cycle,” stated James W. Bagley, chairman and chief executive officer of Lam. “The growth in revenue and bookings substantiates the market position gains that we have described throughout the downturn. Our financial achievement and our success in the etch market are the products of outstanding performance by our employees,” Bagley concluded.

Statements made in this press release which are not statements of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate, but are not limited, to the benefits of the Company’s market position and business model, the Company’s ability to maximize profit and cash generation going forward, and the Company’s ability to remain successful in the etch market and to continue growth in revenue and bookings.

~more~


Lam Announces Earnings for the June 2004 Quarter		Page 3 of 6

Such statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including specifically the reports on Form 10-K for the year ended June 29, 2003, and the Form 10-Q for the quarter ended March 28, 2004, which could cause actual results to vary from expectations. The Company undertakes no obligation to update the information or statements made in this press release.

Lam Research Corporation is a major supplier of wafer fabrication equipment and services to the world’s semiconductor industry. Lam’s common stock trades on the Nasdaq National Market under the symbol LRCX. The Company’s World Wide Web address is http://www.lamrc.com.

Consolidated Financial Tables Follow

###


Lam Announces Earnings for the June 2004 Quarter		Page 4 of 6

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)


	Three Months Ended									Twelve Months Ended
	June 27,			March 28,			June 29,			June 27,			June 29,
	2004			2004			2003			2004			2003
	(unaudited)			(unaudited)			(unaudited)
Total revenue	$	329,572		$	231,128		$	186,086		$	935,946		$	755,234
Cost of goods sold		170,369			125,337			109,625			506,548			452,369
Cost of goods sold — restructuring recoveries		—			(322	)		(663	)		(1,651	)		(964	)

Total cost of goods sold		170,369			125,015			108,962			504,897			451,405
Gross margin		159,203			106,113			77,124			431,049			303,829
Gross margin as a percent of revenue		48.3	%		45.9	%		41.4	%		46.1	%		40.2	%
Research and development		49,961			42,914			40,391			170,479			160,493
Selling, general and administrative		40,711			37,218			34,501			146,063			132,820
Restructuring charges, net		—			1,317			9,805			8,327			15,901

Total operating expenses		90,672			81,449			84,697			324,869			309,214
Operating income (loss)		68,531			24,664			(7,573	)		106,180			(5,385	)
Other income (expense):
Loss on equity derivative contracts in Company stock		—			—			—			—			(16,407	)
Other income, net		1,676			877			1,710			4,470			6,147

Income (loss) before income taxes		70,207			25,541			(5,863	)		110,650			(15,645	)
Income tax expense (benefit)		17,552			6,385			(9,562	)		27,662			(7,906	)

Net income (loss)	$	52,655		$	19,156		$	3,699		$	82,988		$	(7,739	)

Net income (loss) per share:
Basic	$	0.39		$	0.14		$	0.03		$	0.63		$	(0.06	)

Diluted (1)	$	0.38		$	0.13		$	0.03		$	0.59		$	(0.06	)

Number of shares used in per share calculations:
Basic		134,414			133,251			126,872			131,776			126,300

Diluted (1)		139,820			147,365			131,420			144,928			126,300

(1)

The following table provides a reconciliation of the denominator of the basic and diluted computations for net income (loss) per share:


	(in thousands)
Basic average shares outstanding		134,414	133,251	126,872	131,776	126,300
Employee stock plans		5,169	6,958	4,548	6,538	—
Warrant		237	479	—	359	—
Assumed conversion of convertible subordinated 4% notes		—	6,677	—	6,255	—

Diluted average shares outstanding		139,820	147,365	131,420	144,928	126,300

Employee stock options, warrant and assumed conversion of convertible 4% and 5% notes were excluded from diluted net income per share calculations for the twelve months ended June 29, 2003, because the effect was antidilutive due to the net loss for the period. The warrant and assumed conversion of convertible 4% notes were excluded from diluted net income per share calculations in other periods because the effect would have been antidilutive. Diluted net income per share for the three months ended March 28, 2004, and the twelve months ended June 27, 2004, includes the assumed conversion of the convertible 4% notes. Accordingly, interest expense, net of taxes, of $0.4 million for the March quarter and $3.2 million for the twelve months ended June 27, 2004, must be added back to net income for computing diluted earnings per share.


Lam Announces Earnings for the June 2004 Quarter		Page 5 of 6

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)


	June 27,		March 28,		June 29,
	2004		2004		2003
	(unaudited)		(unaudited)		(1)
Assets:
Cash, cash equivalents and short-term investments	$	429,472	$	633,070	$	507,413
Accounts receivable, net		245,508		179,606		107,602
Inventories		108,249		110,746		112,016
Other current assets		113,159		147,440		145,745

Total current assets		896,388		1,070,862		872,776
Property and equipment, net		42,444		37,477		48,771
Restricted cash		112,468		118,468		118,468
Other assets		147,326		143,887		158,260

Total assets	$	1,198,626	$	1,370,694	$	1,198,275

Liabilities and stockholders’ equity:
Other current liabilities	$	376,606	$	300,069	$	216,982

Long-term debt and other liabilities		9,554		322,944		332,209
Stockholders’ equity		812,466		747,681		649,084

Total liabilities and stockholders’ equity	$	1,198,626	$	1,370,694	$	1,198,275

(1)

Derived from audited financial statements


Lam Announces Earnings for the June 2004 Quarter		Page 6 of 6

Reconciliation of U.S. GAAP Net Income to Ongoing Net Income
(in thousands, except per share data and percentages)


	Three Months Ended
	June 27,			March 28,
	2004			2004
U.S. GAAP net income	$	52,655		$	19,156
Pre-tax adjustments:
CMP impairment — cost of goods sold		2,425			—
CMP impairment — operating expenses		600			—
Net gain on notes and swap — other income, net		(4,505	)
Restructuring recoveries — cost of goods sold		—			(322	)
Net restructuring charges — operating expenses		—			1,317
Tax expense (benefit) on net reconciling items		370			(249	)

Ongoing net income	$	51,545		$	19,902

Ongoing net income per diluted share	$	0.37		$	0.14

Number of shares used for diluted per share calculation		139,820			147,365
Income tax rate		25	%		25	%

Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to
Ongoing Gross Margin, Operating Expenses and Operating Income
(in thousands)


	Three Months Ended
	June 27,			March 28,
	2004			2004
U.S. GAAP gross margin	$	159,203		$	106,113
CMP impairment — cost of goods sold		2,425			—
Restructuring recoveries — cost of goods sold		—			(322	)

Ongoing gross margin	$	161,628		$	105,791
U.S. GAAP operating expenses	$	90,672		$	81,449
CMP impairment — operating expenses		(600	)		—
Net restructuring charges — operating expenses		—			(1,317	)

Ongoing operating expenses	$	90,072		$	80,132

Ongoing operating income	$	71,556		$	25,659

Ongoing gross margin as a percent of revenue		49.0	%		45.8	%