Applied Materials (AMAT) 15 Nov 182018 Q4 Earnings call transcript

Welcome to the Applied Materials Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and answer-session. I'd now like to turn the conference over to Michael Sullivan, Corporate Vice President. Please go ahead, sir.

afternoon. Good joining which fourth is you XXXX of for call, earnings being us appreciate quarter our fiscal We recorded.

Financial Joining President me Chief and our Officer. CEO; and are Dan Durn, Gary Dickerson, our

website and Applied's you begin, we call statements, that its and Applied no update based also non-GAAP and Today's share uncertainties in let on uncertainties performance, are to I'd concerning are remind Relations to business on today's statements could page current contained not includes reconciliation assumes slides, call call estimates, Before of the earnings forward-looking cause to which them. Gary are our differ contained actual that recent Information measures. AppliedMaterials.com. and and our over outlook. measures Dickerson. press risks results assumptions the Investor of view and future These X-K in are management's me GAAP the XXXX, most to Reconciliations contains as these Applied's today's to turn financial at materially, risks and forward-looking filings and obligation is to available in products, And statements performance. positions XX, industries, XX-Q release projections of including are of SEC. guarantees subject like November Form now, with All

would around would past contributions for second in dedication work Thanks, the businesses This Mike. over the them In the And been the hard I of all our of with line results, and to Despite thank double-digit in Materials without our not fiscal guidance. market delivered quarter, possible have like solid their our our in half fourth fiscal employees the year. year, posted world. growth challenging conditions Applied of major each XXXX.

in demonstrating we execute same semiconductor of past. a term, characterized well in have we While are conditions. more resilient industries range the we not display large diversified the that that revenue and time, market the a At can to we're the that the fluctuations company with seeing near equipment continue headwinds expect in market built streams

ahead, create further both term to for Looking remain semiconductor and great Applied. continue are we that drivers firmly growth opportunities in in will and longer place display confident

I'll address drivers our by perspective the on and Applied's reshaping customers, During and performance industry, today, Then company's market priorities, about finish the the I'll start of our needs dynamics. call the strategy ahead. term evolving our with and growth future near describing investments opportunities and talking to and the substantial summarize

changed. that In factors several was demand past. market diverse industry has tensions industry markets investments. our the specific picture. to several are wafer and prices I've are in PC consistent past industry, memory weaker softening the spending. Overall structurally it a than a makers equipment due to the macroeconomic memory painted negatively it applications. enterprise server, memory changes shared the elevated the seen however, months, recent These include is in earlier near commentary These has years, less we've and fab is perspective drivers, industrial larger in my impacting Over was fundamentally Today, and volatile consumer, increasingly spanning and by risks, Recent in term. mobile global than and pullback the in trade it year

XXXX After memory today logic, pushing this. reasons memory and through well first overall EUV we In There capacity challenges higher initial creating XXXX. development, customers to are XXXX lead-time demand even investments pullback expected demand for in economics in in the spending to with in seeing In strong, Customers' We XXXX. stabilize headwinds spending customers the in additional concurrently pricing optimize will leading to going we're share nodes, this is enter EUV, I XXXX To time at spending Our billion. long in different the than from several foundry cycles are Relative of pick tools are described, overall around these and now capacity Applied the they remains investments And equipment levels second believe current XXXX high our a the I've current volume view, healthy. were overall the just edge. we tell are Supply the industry long expect consistently XXXX. and believe while be us are up the of rational during combined period. production that still and aggregate, spending relatively of systems as $XXX adoption balanced. the levels. disciplined. as wafer-fab the see in down and to remain slightly forward at of XXXX, past. the prior half for support and

are While are our is as trade firmly their becoming data, on trends to dependent technology major growth macroeconomic unchanged. are silicon and we perspective on cognizant and industries in place global of increasingly factors, define futures. specifically, long-term technology, drivers more Fundamental

One of the provides our peers future This diversity us growth to deliver in flexibility distinguishes solid our a Applied conditions. the from products. our and a technology market with broad that the of variety and of base financial things for performance is platform

sequentially portfolio patterns equivalent when down our run favorable rate for approximately spending more Although address Applied. technology much out been is quarter that inflections. our were fiscal year-on-year, to first quarterly product performance better to will our This because major building we and is deliver average we've XXXX, in be will

business headroom scaled same for annual compound with further expansion. position X nearly of plenty of in our X time, over For years share significantly past service our market points example, rate the XX past XX% growth At in a the improved memory, we we've at adding years. the

business at than past more the Additionally, annual compound years. our grown display over we've growth XX% X

and in major long-term our we R&D, transform While Data for the are will A.I.-Big perspective technology long-term be could every XX% very I the this trajectory as A.I. Enabling our around and to and continue Across growth over strategy. and not company, to foundation at future the the we're a in abundant the of spending our enable taking that our lower linear, electronics drive we've our and next future semiconductors. inflections feel stated, changes customers Edge at of Big almost I display good and will towards lower previously believe those the be growth of down may XXXX. chips Data require revenues about powered opportunities. types computing and strongly sector and economy, new decade storage. Cloud, cost prioritize

improvements classic cost. industry's traditional down, power, performance, semiconductor playbook the not scaling As and Law slows providing Moore's necessary in area the is

to which entirely chip, of shrink XD new new result, structures chip new new including As to of development packaging ways advanced a ways. five lithography opportunity in self-aligned of EUV Applied. the and includes is and connect within All chips create a these areas new architectures, geometries, for require a integration and needed, engineering of the new materials patterning, together in the wealth materials, major techniques advances feature playbook exotic

evolving As making a to valuable result, company and our are the to play A.I.-Big more larger strategy position and role a investments Data the we era. in

together, META entirely from address will creating to we META This Valley new to to industry of us new within seeing already new engineering new the products. support community New and We're can the earlier our manufacturing fab. processes and in our ways. accelerate single R&D developing plans deeper system. Earlier for allow new to materials to announced new and capabilities designers designed strong growing multiple lab innovation of expected to in of where accelerator Mayden We architects, York. will infrastructure from types expansion Center materials Center, chip It's unique we materials integrated pull need engagements, technologies for from or a with for especially technology in our today, of extend capabilities prototyping collaboration customer system new ecosystems the is for types Technology work Center solutions, to which The open systems. early and XXXX combine transfer to the often in rapid Silicon are of

ability of challenges. customer's our and to We nodes. materials integration we interaction increasingly broad am understand removal portfolio between can and materials our current, the technologies address the together I value about at future and modification complex our create to bringing excited materials are trailing creation,

to hand the Dan, over summarize. me quickly Before let call I

remains headwinds, While equipment We than wafer and the is less is navigating believe robust. fab structurally cyclical this spending demonstrates that larger industry in near-term the past.

the not breadth the the do technology spending within equipment delivering era for play long-term, strengths, Although our We positioning A.I.-Big Applied’s Data inflections company in expanding major we our winning on role ahead. focused of strong wafer the are still to portfolio. to remain fab current patterns and performance, the thanks the product financial

to Now, the I'll call over turn Dan.

industry our New in results, QX upstate also to York. thank outlook and Today, QX I'd and teams our growth share I'll revenue summarize like we're outlook profit investments perspective record Gary. provide for discuss my in on making Thanks, delivering fiscal XXXX. the then our business financial operating the

As demand quarter in Gary our we weaker XXXX results expect lower than first to said, and industry the be first overall half today is sequentially. of

this, a sequentially. guided includes our higher restriction. would export Without to guidance we impact Our revenue the be of have semiconductor recent

bottom current saw or same to volatility that ready see going we're company. kind not we're While the not of industry we of to as in call an past, we as the the the cycle, optimistic are a

all about current billion for industry of than note positive guidance beliefs. $XX years cycle. And it core our equipment important thesis, semi mid-$XX to is It's the in the this implies higher range. WFE three annualized to Our on in is prior QX the that based billion which reinforces

and emergence and big a A.I. new market large we First, see for of Data. the wave plus of related devices a demand to drivers Big mobile PCs

balance. believe and And the downtrend, Second, customers We in third, after proactive to the company more demand is profitable steps taking we and equipment are more believe and attractive. supply attractive that has our the intensity keep a long stabilized. is capital industry more

more Over the a years resilient built past has diverse, business. more six bigger, Applied

profit both in in fact, than we of year the delivered any In the twice more decade. other operating XXXX, past XXXX and

point more we recovery We shallower customers of generate higher fiscal year, off of our our believe XXXX, XXXX. improving in demand to year the than to and guidance the the forward this if second Looking in will is earnings of shape the outlook even QX half gradual. an

enables cash making profitability simultaneously continue disciplined delivering returns shareholders. to growth our us opportunities, to improved attractive in Our investments while future

held non-GAAP results. summarize just $X.XX the gross above QX revenue our and midpoint. OpEx that midpoint non-GAAP below guidance. and of margin I'll We our slightly of delivered earnings was the above the Now generated midpoint non-GAAP We

operating Systems by below year-over-year X% Turning Non-GAAP about XX.X%. our expectation. slightly and to the was Semiconductor segments, declined margin declined to revenue

Services Our margin Global year-over-year to business by XX% to operating non-GAAP increased XX.X%. $XXX million and revenue grew

margin revenue, XX.X%. at Our Display operating group delivered which $XXX our above million was target. slightly high remained in Non-GAAP

with period or strong flow $XXX cash authorization. XX% the Turning with backlog million We $XXX $X.X the on and $X.X billion. buyback shareholders, balance buybacks. over and in enter $X to improved sheet, to We billion billion including fiscal nearly balance the investments of our Operating remaining billion. returned to XXXX We a in sheet. cash $X.X million ended in

Next, I'll provide our QX guidance.

company $X.XX expect billion. to We revenue billion and between $X.XX be

the about outlook, about up be Within expect should revenue be Services down we year-over-year. to XX% systems by revenue silicon year-over-year. by X%

XXXX a for services with As exceptionally QX over business XX% XXXX. our strong of reminder, QX up was revenue

revenue should about up Display be Our by XX% year-over-year.

around the margin and We should range or around $XXX $XX in earnings of of be OpEx share. XX.X% to expect $X.XX minus of plus $X.XX million per million. non-GAAP Non-GAAP non-GAAP gross

tax approximately XX%. non-GAAP rate Our expectation is

nearly X this compared rate. last As to when up year's is reminder, a points

one we're announced centers years Now investments will Earlier the I'll process scaling the customers York. agreement, Center The investing the plans $XXX to including need making is most of New state will materials, contributions. the advanced Applied both challenges. R&D world. Applied and the in close the META to million pioneer today, in discussing industry's seven the create of and in-kind architectures to over first committed our technologies the and cash overcome by

term targets longer Our will model. financial operating raise planned expense not investments the in our

by expect and and will York XXXX and dramatically million will secure second Center performance approvals. calendar subject pilot expand customers New funding to of the intend to install META to invest And META Center purchase of production to tools breakthroughs equipment. half year. accelerate collaborate with in end the We our public calendar the power, capacity $XXX year. to a The target to up our ramp and we is cost. funding activities our in this in the of State of State variety semiconductor

Now, Mike, Q&A. with let's begin

Thanks, Dan.

as many at help please we as time. just ask reach one to us can, of question Now, you this

additional best an question the operator have to our pull and call. If it you later, do answer in later please the we'll

begin. Let's please

go you. question from Instructions] comes C.J. Thank [Operator Our from Muse Evercore. first ahead. Please

market of my question. you Yeah, in and share question good a for I taking afternoon. guess positioning. Thank terms

So you technological talked of headwind in also about making investments EUV inflection. as into XXXX, but a terms likely you're

gains through resumption you well the of does guess, in to WFE in can of mix you a I also, Thank as we love side? that think grow could as you. see XXXX, least the kind beyond perhaps curious, that. thoughts, And about both line? share inflections Would timing where you at hear So, walk allow to as your XXXX on

the Yeah, question thanks for C.J.

me share. what timeframes, about we useful inflections. joined three And on XXXX, and market Let we've you big Applied towards to color shifted think think investment done, give in some see When where we're going. I it's what we substantially today I

share consecutive a or result held As X years the for X increased to in XXXX, we years.

focus. And share were also, we we memory, increased we big had where flat think and years a in I up one. five

of memory by total our XX points. about increased we So spending share

I gaining but as where the in of vast our rapid see share compete. also we we talked in holding don't and the markets term, also EUV in near XXXX the in or remarks, about growth in businesses, we're other prepared majority So

So mix we tools share result, and overall adoption, used beginning as in share. Those long WFE headwind in XXXX. XXXX times After very XXXX. a initial support to high EUV have do of lead a development, creating for expect first and many to production we expect the spending tools to see years XXXX, decline in our in expect we the our

that a is long about mix for spending. months to indicator future Applied the of customers position scaling. of the XD become the in that shipments last and And still other a customers, that all customers couple term, Of about Once our the over cost. heard I and last slowing. for new near-term over recovers, another deeply lead-time met us. many thing spent then with and from all the industry - is lot enable NAND more I is XD And And want drive are we've the I the this time course, longer power, the area a months. industry Moore's favorable those scaling classic Law more of in factor to also And PPAC, needs you the this playbook. last positive over beyond seen playbook believe will over best talked to think believe new important ways performance, All couple thing C.J. mix business. I've the

EUV driving techniques includes within about, we're different together integration talking great including areas packaging All new five shrink those that including architectures, before, a of I've Applied. communicated we've to ways in new major to chips that developing as chip been of opportunities XD materials patterning, and So self-aligned and growth new new advances the connect for techniques ways. entirely require playbook create engineering new five advanced and new structures in materials, the chip,

new and for result that META and unique tremendous in move our Applied. a where developing the needle the As creating systems, that, accelerate materials entirely to and for there's the of value customers industry, of types investing new Center we're capabilities for products to

to to right mix And C.J. hard predict the it's say is now, fair

will depend on of XXXX, XXXX in like it things NAND Gary terms in like So happens XD said. what

we'll think trying stay the I early tuned prediction make So year. that on this to Thanks. in

Thank you.

next comes question Please go Atif Our from from Malik Citigroup. ahead.

some just World couple metrology products CD next on your launched Gen market LG your X lines. and display. and outlook down where thoughts for a Summit, e-beam Gary, for question. OLED [indiscernible], you a of takes about taking new X the Thanks XX% TVs Gen the question display converting Samsung hear year? so I at capacity for on with on puts weakness OLED and Also, flexible and We my talk next guys you on e-beam, you Can ramping year? Hi. have display

Thanks question, for Atif. the

amount a So happy X to XX% before give growth our the you we've about as annual we've color said tremendous compound grown on display business, last years, a display at rate. over

And of to to XX% be given at of we're we've XXXX, talked I in end declining the that business For range low likely XX%. risk, the elevated the about believe range. the

customers TVs. to go important expect I XX.X deliver transition the then, it's to So segments, technology, because panels, communicated TVs segment, XX.X with panel. for Gen screen costs and to for Gen TV X get you our a you lower And in only XX large can on X you into we've inch continue them will previously X.X if strategically different the produce Gen as

screen for different customers' to any larger see for OLED recover customers, smartphone large change able In strategically higher going TVs, future sizes. demand technology of year-over-year. move more to flat produce So area, number we suppliers the OLED it But are with see to believe is to be compelling as reasons. is And we recent the in those the a will a plans. yield. discussions continue don't to is best for we And that at panel

see overall, our that business, a display a we XXXX the despite first the years seeing continue So in decline I business. think opportunities for lot X in good time of to drive

Atif. Thanks,

Thank you.

Ferragu Our comes Research. next Street New Pierre from from go question Please ahead.

my for about question on for you your and share movements taking for you, have I Dan. follow-up thank quick I a follow-up a have Hey, a EUV. comments And question. Gary, then,

described lot to you trying that makes reconcile a of sense, EUV I'm is just So ramping. what so and

like along when But ASML I materials grow expect I weeks, in share that foundry don't your lithography. same expecting same. the that's the reiterating that to You're with like at CapEx technology peer share is the EUV large regain context. saying you're mean, to they few TSMC, in said, will you mechanically a they losing But longer, last so bring heard for time, go player Then significantly. that

overall think faster to than you to and significantly CapEx and perspective different a have you revenues? in foundry mean is grow grow that does continue even so, going And

the question. thanks Yeah, for

many over of of I've for to customers I hasn't believe with this crucial Big I a term, our last And five era. the techniques playbook. And and deliver that absolutely many, changed. So the needed strongly spent earlier talked needs cost about Pierre, area Data-A.I. all meetings new months. We longer think power, perspective those performance, that, couple industry are

We in with going And at we performance improvement electronics our all to profound the industry are aspects a to all look and major be of in can go silicon past. Now, definitely that. look foundation you we've the at per way life. transformations, times X,XXX need certainly the where of changing if believe you of of said at a those watt, what still

look about I are people that other You at focus. better what also areas term And five saying in can believe longer they talk a position of those ever we're been. we've than deeply

Now, production a headwind time, first XXXX for lead-time in into there's tools. long going time to a That's to After adoption you to we've a They'll in in initial and XXXX. done the in go of believe have certainly for longer I long headwind XXXX. the certainly where the EUV near with going industry we get past. what is the provide doing us but term, not definitely term, need the go

very new couple classic over strategy. this think a Moore's rate. that I've that faster right reiterates last also and playbook Law And to meetings with heard materials totally drive everything the clear you have again, to tremendous - months, at it's systems down Moore's in the of I going value customers that's in slowing Law with there is from much

that's my so thought. And

follow-up had you Pierre, do, know for don't just And you if checking. Pierre. a have I you said might think, I Dan. Thanks, still

response. no hearing Okay,

on. move Let's

you. Thank

Sankar comes from Cowen. ahead. question from Krish go Please next Our

logic towards view In is Hi, Gary, of the skew it for next more year WFE general scenario, looks Yeah. logic to is taking to the fair memory. that mix foundry thanks that What's versus assume my going and like control should it question. then that for or be a your And selling housekeeping better Thank you Dan. it you. Fujian? export profile from profile into Was memory? foundry, the on $XXX profitability for about guys? impact your versus quick million margin

Thanks, Krish.

the Let and little - we're around the then market to company. for profitability come of bit the profitability the me the a share that with seeing what you implications has of that, WFE

in down profile up. we of and device profile NAND. were on logic billion. ourselves $XXX as So of logic, combined three the by talked then XXXX. terms now softened if everything look today given where WFE, see memory were I then of share the device sit types. we into would in, we're XXXX be our XXXX, I like high, being the see environment, expect aggregate shape help below order that's thinking have XXXX XXXX. last bit I think be feels around types. XXXX would the and comments, we little the probably followed all-time expectations find more be a by device then either - at in XXXX XXXX, say, months. we to XXXX to would foundry, it premature I to followed we the it's of But to and each XXXX point We specific types strength look prepared strongest, I given four rank in as that in of the around elevated view if the about XXXX And a does spend what to followed by four just be If of market. And than to or DRAM, the and again, then risk And into - across we view XXXX today, I foundry XXXX, to off

businesses, think a the or best - of a favorable I we mix perspective. the and - a profiling that The way be businesses the products leadership terms margin a will end four leadership less the that sell, more we less less headwind think product businesses you'll segment. types the within certainly is from about sell, mix or more mix device our In amongst the see be about favorable segment business our of our profitability, leadership about market to equipment and

a mix to as markets. at opposed look influenced it I'd as end product So more

Yeah.

usual then this important it's believe region. around we Chinese we the then to we to this regarding feels can't color the the Okay. customers for monitor the and a China. the geopolitical as have the part action the customer. do of And a actions question we're in certainly particular situation, business place. From And, And was take constructive to think directed fair trade. respond And magnitude that on the today, by in see We other other of other like recent U.S. ecosystem for what overall course, you on we want speculate the give any situation that Dan, could appropriately. and And the of relationship impact? between going continuously then, was

Sure, Gary.

our our we semi as taken guide think So flat to about a we be sequentially. think into guided QX systems one meaningful about one absence was to revenue quarter and have that ago our we the our down the we're export QX. restriction, with of would export number. And we action customer, a up bit. in customer QX in In would We I - against into business this sequentially that up say specific been a expecting business is the semi that

don't portfolio. I significant with since semiconductor I along mix in unfavorable think QX to think, one QX. sense that fiscal give sense we into impact read-through customer. was a guidance I enough revenue And to impact in to reduction company EPS on more a reflects the you our want the of that's the of we customer. of a an specific, our think what the product But it's action on one be a direct that provided the within So you gives

Krish. Thanks, All right.

you. Thank

Pitzer ahead. Suisse. go John from from comes question Please Credit next Our

question. I with you're stream, I Do the your the you about specifically good comment ask business, will that prepared how XX% comment? represent that? build think to silicon think prepared Yeah, down we we should that Dan, in silicon that think Or your sequential year-over-year, Dan, for bottom can not let extent a wondering January over guidance me to off being comments, relative the overall to a the a to of? guidance. guys. to Jan - Was a or relative Gary, the call you that start bottom. year-over-year business? the guess, quarter revenue January Applied year-over-year Thanks believe, said I'm afternoon, was that I

John. Thanks,

color Based gave essence what some a conversations, business, little today. we're is I biggest conversations question the about based where on you're of and the the what think would bottom on it Let context because about. the me our at customer share provide helps I with think and of hopefully, that's specifically in and you gradual, bit into market elevated gets the cloud of decent the market, certainly seeing we're say profile, related that calling guidance by we a markets in an find having, in the we our creates not half be higher XXXX. a that also customer risk than risk semi to elevated semi the is would trade, as given XXXX infrastructure, the it's create offset environment, the first recovery or XXXX. But half we in PC, - elevated side, shallow, industrials on But comm U-shaped business we that CapEx. package risk think think we likely the prudent profile, second to we an weaker ourselves around geopolitical expectation handsets asking being

a are setting. expectation I and to definitive to reasons, And in the bottom. we we put it what don't so for a like and trying prudent see variety we of call stake ground in But, a think be want

John. Thanks,

you. Thank

Our next ahead. question from Harlan go Please from comes Sur JPMorgan.

If you please have your your phone on mute, unmute line.

Thanks looking of that Despite about ramp DRAM that next two talking potentially Dan, kind in to the China taking QX, in guys one other these one year. programs - on DRAM in in are are afternoon. NAND, you for China, major are here equipment, my domestic this Good question. there

I next year? activity the view maybe second your starting domestic light both other view changed potentially memory your in towards that has suppliers foundry, and capabilities, think, last said guys to of weighted some in changed light you has with heavily looking are was of China XXXX some quarter looking of DRAM of more that ramp kind of NAND half - this

the we Thanks Harlan. I as don't other customers with region. activities earlier, Yeah. any for the said question, see Yeah, in really in the the change

thing, color one that respond may going how if that I Of monitor you I to give we're continuously need composed. business, to to and our China anything but to, it's we on helpful course, be respond

have of So fairly our foundry, is semi in roughly large and display logic half XXXX when the in before, didn't of to forward. China And we for that modest we and and ahead than a with of in we're semi less a balanced Display, we to half domestic, multinational, and beyond, systems, our business going what half in revenue little between domestic and continue is market said other is a the look see we market see growth stick, the growth consistent domestic we've hockey memory. terms

So, the at any our today, our of before. we've and least pretty the consistent said in profile I parts different say, behavior what with is don't which see would of we basically that's business, with customers, change

Harlan. Thanks,

you. Thank

Our Romit Instinet. Shah from Nomura next from question go ahead. Please comes

Yes, afternoon. services. Good thank question is on My you.

looks performance it guiding coming fiscal as we XXXX of SSG to the services and in the you're a model year-on-year a down out it correctly. So and this fiscal year? pretty interpret that some year if January, point I does at be in cognizant we of strong XXXX, XXXX, in XX% question it sequentially quarters fiscal start your should services track is, of the bit had up fiscal for like was comments about My

for the Thanks Romit. question. Hi,

base direct I think is installed about best the growth, through. certainly way influencer, but a not the think services an to it's read

growth business and the complexity base, growth there that our So around increasing the the business. think vector industry customers multi-vector prior around vector the their versus systems the grow yields. get a does business will year. that is the transactional I the what around service track and a directly there in are following is our challenges the don't nature, is facing asking But year, is to drive for with the a business in bit more it's strategy so have And the agreements predictability approach and strategy a increasingly help to comprehensive we third the installed

business year. XXXX continue point company that, on executing will a to that has basis. a the CAGR strong be XX% goal great a done You out our job that go-forward that to And a grow at was strategy, grow

one feel year. through good think I systems but on business can a direct any read we it's make about, based you a in So don't

Thanks.

you. Thank

next Arya Bank comes Vivek go question Lynch. from America of from ahead. Please Our Merrill

to slowing possible offset three high-end of those smartphones. it in the But what you enterprise stays Gary, flattish are they taking enterprise kind is of it equipment data with to the relative enough growth is dynamic? center, if when for the because look as of And coincided big your industry, growth kind next term, of look years Thanks because the I that declines. think WFE the question. to of market can over or two this versus I indirectly last directly, for my semi-cap down, do data five longer center smartphone when the exposure be will years, and the

Yeah. Thanks, Vivek.

providers playing read consumption those service long-term big hard in go and technology increasingly As was is an hard focused to a Industry through are PC a IoT other. from to of autonomous if narrowly WFE large to is we diversified to portions that on extremely handsets, direct lag and in disaggregate center, cloud It's then decade a is a of to see our step X.X. on we've as consuming really data you what increasingly we were back are back compute drives can vast chain that disaggregate trends attribute to like WFE, in take things and Since driving got the the as depending silicon we've beginning - industry, the and one around influence WFE, semiconductor silicon majority into platform. data that, mobility

handsets in is, units that like our would and in slowing is demand The are that I do down, support favorable second trends are industry. see drivers What of market say we broadening the happening, still gains industry. the I end clearly content so thing the

a as even take how XXXX a so though and at to in any XXXX are quarter adjustments are or now areas. profile you coming look you see look headwinds XXXX, that structurally given larger, period quick our industry is And different into the from can

capacity bit to You and volatility would well, of seen think point a semiconductor has of demand is see can those the billion, industry we the industry. sized that, the moderating manufacturing say an billion, $XXX at serving clock the billion-ish a on be It's roll $XXX industry diversification trend this industry be at very to today. going billion that $XXX This to world. the to the an of favorable we in aggregates our in going forward future, wafers take levels. is in some $XXX It's that be point industry chips support that's going what as historically. view for I produce that a is we terms and

extremely were what that disappointed about today. to would I we $XX be WFE, if So a talking in given about we be here billion XXXX, know sitting

Vivek. Thanks,

you. Thank

Timothy UBS. ahead. Our go from next from question Arcuri comes Please

share Thanks about a so just repo. the had I much. Dan, question

bought bit this, $XXX back prices million you the over six at a quite $X.X billion at lower quarter past this but bought months you think, back much only prices. I about higher than

what wondering just forward the I'm much. strategy is share Thanks so the repo? going on So

Tim. Thanks, Yeah.

a shareholders. allocation healthy cash So and growing on excess is, what company, we our strategy about returning focus strong our said excess going sheet capital to the and balance we're maintaining to cash then

what against strategy. think I executing you see that is us

may the given If to If quarter, above the timeframe period the of on take or long decades, done look day. what flow last may XX% given not you shareholders. given free a two to in a the repurchase we company time trade over any has we narrow share we've of back back at any cash close our where to be

the company average $XX. our a the of time, an at This outstanding; company Our about look if repurchased almost XX% not company given billion for shares billion track long today policy. a back And the X.X peaked done of at you under we've has very something X price at is and shares three-year it's has billion. new record, $X

of we so our shareholders respectful flow. I has the run, the disciplined manage which way And in free over and the think company been in cash long

Thanks, Tim.

you. Thank

Sachs. comes from question Goldman next Hari Please from Toshiya Our go ahead.

Great. Thank very follow-up I share taking wanted on your the market you comments. much question. for to

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materials announced at to And there's And, tremendous we from times than many faster is why really value getting that's that's goal feedback are today. the there. That's investing. think that we're the we Center. So systems are We why META certainly, we customers. the to drive

Thanks, Toshiya.

you. Thank

Our ahead. Stanley. Moore next Joe from question comes Morgan from Please go

strong you. of companies over in I My aggregate, you been question seems we've numbers are is the year-to-date that are I DRAM DRAM on thank company your Great, all seen. despite like And quite DRAM it have pretty three kind if think DRAM. shift we aggregate sales to terms to they guess, XX%. equipment who showing of up strength push-outs significant there, in

guess, it intensity I in So, is inflecting any much it understand doesn't one increasing, I was that seem capital like year. but

about helpful? Thank DRAM accelerate year? I would guess, is push-outs into robust of despite that sustainability it year? - that would how next XXXX you. a having be anything even Does So you us the And, does such with that tell mean would supply

Joe. Thanks,

journey from standpoint at bit at us a look that gets our we DRAM, where in As the today. share to back we're of to position market gets it a

As market were across the types from almost or or done that DRAM a diagnostic we into And one had diversifying a Gary device has All below. standpoint. he company end-market has XX% And where device market very company the talked, to market-share came a since he we're good share been came was when types company, job into the those the XX% across from others over standpoint. hard to really The market We're one beneficiaries. increase to require with logic-like higher being of the periphery us I/O some our that customers. roadmaps transistors with in speeds those And share And us processes share devices. it's as it. worked drive accrues company's the allowed customers adopted benefits our when deliver seeing well innovation to increasingly to the their in of on businesses.

setup forward DRAM good last as And good the you one a driving And is us. a pointed that we've there. And It's years. setup for market going the share good we done so, out, forward going several as over like around well. job been

making the in So we're we progress DRAM. like

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as So We strong a feels from feels But it be not year. outlook it decent proactive as going good, for a it's the pretty and it looks steps tight was. customer like next it think still to year. conversations, really

Thank you.

Please Stifel. from Patrick Ho from question ahead. comes go next Our

you architecture on you're key a talking the chips very terms within continued Gary, the playbook, materials the much. and innovation. and just structures the in with factors Thank follow-up maybe about five of

variables past come next of that these at Or this the I something believe foundry the X-nanometers we Given in the into node? your segment, logic see guess, strong that, it exposure would do to you more play will some X-nanometer is decade?

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and AI the are for we customers Initiative, from major across drivers of in board and pull those at the the at Forum - July that's Design strong the some Resurgence Conference seeing So DARPA in July. Electronics

we're X,XXX One times these can in of leakage in that current. trailing used even and technologies gave geometries was Again, improvement examples driving new we be of the current geometries. many

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Patrick. think Thanks, one have we operator, question. time more for I And,

Thank you.

from question Deutsche Please Ho comes from Bank. go Sidney last Our ahead.

question. back my question go an want taking to I profitability. earlier on just to Thanks for

see spending, first see lower leadership gross will growth? bit and model, lower level. guided your that's of mix margin would I And can is than at leadership product a about you'll what between half of maybe memory and at to and I products growth higher little you revenue XXXX situation But XX%. growth explain quite slower XX.X% more assume lead understand, your growth it's fiscal and you less products. XXXX display a already You for versus business end-market because about

is to trying Just target How margin volume? to driven from here? the path what's much by you fiscal for versus about get to the XXXX mix think

I of about handful gross as let with margins, What margin Yeah, going systematically. any gross the we've me several Sidney. margin please quarter know, a through function gross say this activity. in that are last in to customer thanks, the I factors. basis factory margins leave And good walk to anything years. QX gross segment, you level, unpack follow mix, there's a our up. and XXX revenue There would try of over by Yeah, increased line be done job If We've out, product points, mix, given about guidance. actual is

those vary quarter-to-quarter. All of will

AGS a ERP standpoint. about of growing supply continues part a customer seeing covered. QX to of sequentially the progression. sure XXXX the mitigate quarters We're cycle, make part of transition an three, from guide as a natural deliveries line next activity factory be chain down the to are in talked And to point at revenue We level elevated mix. the lower throughout the we our our risk customer inventory bringing were was needs over very tight. to We with four kept to bring of an going that that level be more inventory where

to to And would so, our we're revenue gross guess, and that clearly thing there has play. the most wouldn't gross how off to drive products at I profiles to across these look and a revenue to and those aggregate various the quarter I are driving one job then margins given and level, And Company largest is too continue is, continue margin. much to make to good progress be margins a the at work hard done in going factors I our influencer segments and going point of historically. levels. amongst number any

to like up we the Okay, add, Thanks anything great. you'd time? we on wrap Sidney. so the close for question. call, Dan, before else just

close of Yeah, with I want a to thanks, thoughts. couple guess Mike. I

a we're environment. all First, know in we challenging that

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to goal, see. you we intent our Our help see is what

tougher As prior to feels environment even going our the compared substantially than as are favorable that the trends industry thesis place. around they're We're it was technology higher long-term firmly to and confident industry, the in right long-term now, peaks. the is be

to guess already allows more the Suisse more we've profitable. many the that very Thanks look of you inflections the invest we weeks. is on couple We Credit also lastly, uniquely at much. a believe of drive forward us the see seeing business. well to and conference positioned I that resilient industry finally, be A in horizon. to company It built

replay Dan. on we'd call Applied by like PM of right. continued everybody be And to All our interest Time Pacific Materials. will today. Thanks, website And A for we'd thank you X:XX available to the today. like joining your thank in for us

you concludes Thank all disconnect. you, ladies may day. and gentlemen, for today's attending conference. This Good the program,