Applied Materials (AMAT) 13 Aug 202020 Q3 Earnings call transcript

Welcome to the Applied Materials earnings conference call.

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

you call. Applied's thank fiscal quarter and earnings XXXX afternoon for third joining of Good

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

call that the most I'd and turn risks Reconciliations is to with which website begin, over to X-K and Today's subject found our and the actual uncertainties also cause risks the call recent which contained to GAAP and in today's on that non-GAAP financial to of to contains filings includes measures. quarterly Information at results we Before materials, to are remind you measures appliedmaterials.com. earnings differ. Form in forward-looking presentation available today's Dickerson. page XX-Q are like press Gary SEC. statements, could earnings And all our release now are Applied's uncertainties IR in like call our concerning I'd the

by quarter, the Thanks, steps COVID-XX Mike. navigate last taking time pandemic. to we This the I outlining of Materials were the inside Applied call started

event, talked needed and to and a SEMICON will critical how to power, outlined enable the headwind today adapted semiconductors I'm and including into long-term for A the this vision my has insights on play and concerns acknowledge commitment over allow Today, results. West, the manufacturing to been pre-COVID new resilience, the that covered operations quarter's on responsibly part better intelligence, our Our the maintaining our are principles: possible smoothly time in perspective strategic advances unlock of and first, that new labs second, to Applied's artificial future customers, exceptional running spending contributions, of of at that our and everyone, our PPACt I sustainability, partners; decade. business mindful for our two at role I'm sectors, additional levels roadmap employees, in electronics materials the working new economic is to technology global recent weeks comments initiatives future. for goals next will pleased will Applied's key consumer have going and momentum. creativity which remain to product for in portfolio market. have to I'd the announced guided suppliers, over industry's many stronger of deliver at potential business focusing term. grow by with emerge the to and advance demand market the strengthened I current and ago months. shaping to make and actions the focus I for of few both Starting our trust to longer environment, that playbook a a industry. that also area/cost, who potential and provide With Having better we of is about us semiconductors detail like environmental employees market engineering ways performance, XX-year report and of R&D dynamics said, suppliers, rapidly productivity. outstanding our

and centers we transform remains At adoption automotive adapts leading world investments the and And technology by the potential overall industrial because Work-from-home, online to the equipment, to of fab wafer levels retail AI and that edge, accelerated. entire of beyond. In customers the see drive Many R&D to us in even XXXX year, their aggressively this out the As roadmaps. we foundry/logic confidence cloud in and its use industries, are non-discretionary are a grow specialty stronger This to for are many inflections has nodes gives build challenges pandemic, continuity the strong automation IoT and companies. organizations fabs building and spending increasing being these are plans several with commitment in demand business markets. technologies. expect major sustainable from homeschooling, data soft communications created driving their infrastructure. and spending serve

I've year architectures strengths silicon the underpin play foundries In will their investments be there designed computing Custom ongoing very with for tailored illustrate general Recent and described faster of diversification Moore's with we in the their push inflection investments. forward systems purpose traditional leading slowing Law foundry/logic, specific customized before, applications XD than technology and As for as the from the by a to announcements scaling, or this transition of well. workloads. growing see to slightly memory, solutions customers of companies roadmaps.

systems see our very a being will We midpoint at on Against a to demand, NAND. backdrop DRAM our also revenues the trailing semiconductor strengthening are for fiscal fourth our and XX% basis, the guidance growth similar XX% XX-month be rate up of this quarter up of in year.

highest Next, problems, than faster grow, higher power materials grow plays leading-edge The over This directly consumption. materials value and and fundamental and to outperformance our the performance I'll namely, next creating positioned produce are and what's and and modifying new and traditional structures. explain are driving innovations areas, how, of complexity on the several lower interconnects today years. in we to leadership strengths customers' structures continues transistors to Applied's driving focusing process by our to to markets required our

businesses, and and of growth points our of deposition focus materials have billion more share. market and generated VLSI's analyzing and structures, CVD, on gained Epi, to $X.X our momentum. according example, X businesses that than calendar In For we in data, shaping revenue PVD, strong XXXX,

next-generation packed introduced of customers, midpoint will control serve NAND, and we DRAM, the though to of than wafer revenues Control we've depth We're also e-beam, most by and portfolio Diagnostics will early single the our of we this and the are which and guidance, be in up removal recently SymX complete material etch allows Applied and our company that fastest-growing revenue devices. broadest technologies system the well multiple we system combine the in our XXXX. the way Y, and our fastest our industry, midpoint integrated far XXXX, be metrology XX% Process inspection At market ever the shipped logic chambers, the optical adoption the creation, with processes built. nearly fiscal in in our and extremely customers. introduced profile challenges. guidance, leading co-optimizing is in year. up This dielectric inspection packaging. Since X,XXX the We At and new us business that needed winning segment. products materials address are more densely and process stages significant solutions high etch more in inflections advanced even has and for product see as This fiscal system structures traction growing in most from XX% in the currently to company ratio we our as to than don't spanning selectivity market. deposition the We're all within share for XD, modification, system SymX analysis, form early etch, customers' have precise provides high-aspect shaping, to metrology with complex develop a materials solutions and have more

very we new positioned technologies In to balanced we as share manufacturing. across in than In traditionally market is device node the in these our available are over DRAM, node, even seeing foundry/logic. segments. outperform market where are are very ramp business well grow addition, strong, In higher high-volume we our foundry, our and is

for open tool-of-record Over points won positions the grow. to XX years, including multiple hard have recently process five and past gained applications. still patterning share mask we've multi-patterning, mask, transitions, future hard We've DRAM of potential and significant node

addition, has upcoming In transition clear to the technology leadership. areas the grows logic-like by This high-k/metal Applied high-speed DDRX advanced including is gate. in where features, market available industry's enabled

is upgrades, we're compared predictable value recurring streams momentum to same in of which these the revenues In for look service XXXX parts in and Global long-term expect our aftermarket value comes see strong $X.X XXXX to in have the Services' Within is similar. delivering agreements. and from revenue rate our Applied XX% businesses. for where plus area If be more in are the Another XX% is validation up service XX%, revenue business at of AGS, billion, outlook clear renewal excess customers advanced fiscal we period the products. form year, of our and at unchanged spare of customers long-term to our This agreements XXXX. we is growth display, XXX-millimeter service

TVs. However, the and We as screens we're remain in seeing for some market. in technology about the high adoption the end addressing future of encouraging the signs market, demand market, optimistic on for expanding OLED focus and display available we of on inflections Applied our opportunities long-term the robust specifically XK

have restrictions companies industry the inside with how the suppliers. Finally, as company stimulated in COVID-XX and operating. as I'll differently in our well many highlight customers way we're are the changes working

while Anywhere since than time XXX March, digital the long-term with learning, saving lab reducing and Innovate eliminating provided more support and footprint. provides believe substantial by only thousands our training sessions engineering and R&D productivity I we've a strongly distance that fraction VR held staff onsite. bringing industry's waste, of using benefits restored money, engineers and sessions of carbon live field using and support fully example, For video, AR

technologies us significant and Over and sensors speed to lab from has to transfer cost, combination of several fab, simulation. optimize customers state-of-the-art data high-volume learning, of the past product our cycles, investments science, The been in in yield enables making output, new machine production. technologies years, up for Applied infrastructure, metrology, digital accelerate and development and these

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

employees First, healthy. of maintaining at thanks keep levels of and the workplaces to work our stringent hard company suppliers, are extraordinary our the we to protocols and safe productivity pre-COVID operating while

firmly Second, XXXX. from the macroeconomic we growth longer-term or demand customers, even spending in and while higher semiconductor we be in our headwinds, believe what industry strengthening, we're place. potential hear current is Based levels drivers of equipment will remain sustained mindful on

and Third, the results and Applied. including our the Today, especially for and is strategy customers to outperforming we're overall yielding key our etch inspection. PPACt areas, market growth playbook in accelerate

about year I to integrated we will ahead, very solutions and this beyond. bring excited new the innovative products and Looking am market

call I Now, will to Dan. over the turn

related AGS, Today results, growth delivered business Gary. more I'll our double-digit the share despite year-over-year teams systems, our you our outlook revenue challenges Thanks, performance display. QX. give insights outlined, COVID-XX, to QX semiconductor Gary and into pleased and across I'm trends that, for summarize

plus revenue. XX% about grew and XXX-millimeter represents AGS our company's base over upgrades, includes install by one-third business, year now of sequentially XX% year, which and Our total

we non-GAAP XX% a momentum our QX generated For the fiscal grew company We year. year and QX. revenue year over XX% up continued whole, by earnings anticipate in $X.XX, on of and as year

quarter, supply disruptions. we significant in due QX the chain we third of COVID-related the satisfy proportion shipped backlog couldn't that a During to

And improve. and nearly QX to backlog our in strong, The year quarter. on supply gross increased despite our basis prior logistical remained has challenges ending ongoing and by performance we XXX the demand chain sequentially points year. non-GAAP XX was Our QX, from unchanged margin industry's points continues basis

billion in coupon were due the redeemed operating increased Non-GAAP $X.X We allocated successfully of $X.XX and five issued at to margin of low notes both These average of development. sequential XXXX. and gains non-GAAP was billion, $X.XX historically XX% later in also reduced in we we outstanding. line OpEx rates targets, year. year about that and profit average extended and systems maturities and AGS. June with notes In up October semiconductor our billion and May, research by our weighted XXXX to transactions our senior years operating delivered We over XX% maturities

dividends $XXX and strongly having approval closing returned distribution we Electric We and We're to the need. to to program million quarter, we constructive close the to in shareholder committed transaction. shareholders final the buybacks. regulatory our Kokusai During remain discussions

accretive soon with our We continue the to and immediately financial providing to you after we we the financial results, new proposed look to expect model to close non-GAAP forward be transaction transaction. a

as his conviction made resulting expand returns already generate over are momentum several new remarks. markets The consistently opportunity in Gary today our the will of strong and that's our investments years in we the on trends I'll attractiveness next years. performance nodes in investing to recent the we've by have visible highlighted accelerate and the ramp discussed Next, in growth. We've for

same in is develop compares in Applied's significantly the favorably outperforming half to us new year, interconnects, winning market first the examine up revenue wins in market. and in our to we're revenue profiling outperforming last in also foundry, we're critical We're next-generation XX%. which customers integrated working plus like patterning, our giving peers. approaches systems advanced application materials with period This memory, where we're applications solutions. closest how our QX. is with our is is the using This semiconductor the and transistors strengthening as In new fiscal foundry/logic closely innovative Let's and of leadership well. calendar very the our QX year, fiscal Compared

and improves we'll In to discussions market. this on year, forward company perform in one expect be demonstrating fact, Based than Applied's of etch calendar as environments. spending throughout XX% customers, DRAM demonstrates ability we conductor the spending available growth believe winning well we momentum in number the DRAM to a continue more unique with of look variety the our greater to We year.

systems we the is revenue This to Specifically, business, and memory also to weighted, of believe growth outperformance fuel and into is install and strength for on foundry/logic our second for half our business both another second-half will the up in in year which Applied. our be leading in in growth be base future. track

agreements, are opportunities we warranty, and revenue. service significant off to a As parts win which our for new subscription-like long-term service go systems multiplier growth have

outlook. our I'll fiscal Now share QX business

We to by $XXX the minus year. $X.X billion year midpoint expect be XX% up million. would approximately be of revenue or plus over The around company range

QX, EPS We year. plus strong through significant weather now is the proud to base recent and returns and challenging support, parts with be company display ever, We're The than a our our million. points XX.X%, up would about non-GAAP be $X.XX. or over Services should be year should should summary, be across this Global growth $XXX non-GAAP in Within $XXX or about $X.XX service of third customer incredibly coming all and and Applied Non-GAAP to year to billion, Applied expect segments expect driving of driving driving to see revenue around to million. our cycles investments margin semiconductor positioned revenue are revenue over year. in revenue relative both be all $X.XXX of be outlook, In growth for our increasing about in gross made up operating with about teams systems investments about up And approximately X year which business our in we've double-digit And nearly shareholder or pleased leverage. in innovation, how of we've our year. foundry/logic be made while environment. delivered we minus memory, on outperformance OpEx also install a XX% XX% and our strong revenue translating also about XX% billion $X.XX should I'm years. very better where subscriptions. shipments

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

just one reach as many Thanks, you more I'm of question Dan. ask us follow-up. and please we you And than can, to to as help Operator, going one to brief begin. let's please not ask

question Our first Evercore. comes line with C.J. of from Muse the

now Your line open. is

margins, and Thank I the for taking and on afternoon. really on year year, Good great both first curious. question. the guide, for the guess you the gross just question actual performance

you've we to two, that COVID, you or expenses get portfolio see should silicon? next can that Firstly, for in lower with in the as upside of kind XXXX how about you think room think associated the we for XX.X% just peak cetera? based saw year we costs to any back that logistics, on And then reduced et about related discussed

well Thanks, performed company C.J. On the environment. has in the gross margin, current really

performance. You about the talk year-over-year

current and chain logistics team If to you guide, fiscal into XXX absolutely operations They've to we're work is a like up look take of going supply I be well. the environment mitigate an so and basis in. really our superb at to underscore the done would pandemic performing hard QX, points company job. doing the our almost the impacts that the we're are

And on so that company doing well front. the is

Then margins, the around This got going company. lot on And time on. we think comments. gross company environment to are. to well. market his back performing But those there's Ultimately, clearly, and spend levels, prepared is deliver as think take gross opportunity in these I we we'll innovation we're focused is that the satisfied operating at don't in we the step be we're of of of a systems is a lot clearly new margin, our again, take we've off of the an semiconductor current margins, back longer-term no we As margins and inside trajectory over ever something even in. gross hopeful matter well activity performing the when Gary about look about a that talked a step raise the where the time, company that

on what think I I while we well. that margin coming guide you'll see quarter, into some see the as operating strength segment, don't you'll think by front

we've segment. got over do so think that back the that for opportunity time I to benchmark to prior an And get

in and company well hard environment. So difficult doing work, again, of a I a think lot is the

And helpful. three think remarks listened were view actually ago. very that things in we as and be better arena, a like Micron is to memory might we prepared sounds perhaps your that where CapEx storage it And your on perhaps getting That's follow-up, I softer. as today within quick others than months the concern

year can So trends memory some Thank you're through how second CapEx into half exactly you. color the and provide then of you the on seeing XXXX?

C.J. Sure,

paint Let what memory me context. a that bit bigger picture seeing puts of in for the a you we're market little in

VLSI. XXXX And up see to third-party it's a number. and given about estimate so going be WFE look best baseline to $XX.X the year, off a billion. at number XX% over if think XX% point, year. It's our our validated we customers, everything this That's market that's year by we good we're from at of about this a We

XX% position what We see a the from of the strength to year. is as and towards than take opportunity. within for think feel be going XXXX. very we're think going of strength And overall be second-half We to our is up spend the to the into in We both think look proportion well into both that you continues there's segments standpoint year. of a of as And be at foundry/logic. are is XX% weighted like going strength we to memory More spend those in throughout think spend revenue we seeing think XX%. us WFE our similar foundry/logic. we we're proportion weighted to that market year, the that And both so next XXXX in against foundry/logic. as we And this comments, prepared both

The expecting we're we're So in half of calendar memory XXXX, spending, as precipitous environment. a we fall. look the this a not spike is expecting at in performing back not and well company

well the calendar first of You performed year the first and for half we've the going driving we're just versus XXXX, delivering in and keep of see innovation customers, half our business. calendar how competing, to

So we're doing. how we feel good about

Thanks, C.J.

Thank you.

John next of question line with Our Credit from comes Suisse. Pitzer the

question Your Thanks I'm Good John follow me for now guys. the LLC ask Credit open. like Suisse - that just curious. second that, foundry sounds line just Dan, of a is your actually to in afternoon, kind the (USA) C.J.'s Pitzer in stronger half-on-half maybe half to it answer of question. W. gets on up Securities letting year.

I the third-tier of do business quarter call fiscal fourth kind more use the guidance? China the of see coming of let's half much me into can your foundries, term, just spent a in second for understand more from sort and and/or as especially better China? largest How growth CapEx it hate of that of lack guy you this but better foundry his you look or to – outside than budget Given year, help you from large that that guy,

John. Hi,

with to help we're the try market. what you in seeing me Let

nodes QX-fiscal technology quarters that I bringing a multiple as the has spend the see months against the foundry/logic like see which going good. to the of about see half the with ago, in for couple to XXXX we diversification overall market. underway then the at and business. And market. calendar several is about I We in we're about of QX significantly profile on ago, low opportunity, We've that throughout for as the look for been our of which our in into QX multiple and business see today, customers is that strong it year point saying terms innovation fiscal as market. back of spend a foundry/logic quarter three look strength strength We our And things think QX a year. revenues, So foundry/logic that outperforming we see fiscal we reported this And is front. the going pull things say. ramping our We our everything foundry/logic to QX, looks based year, in XXXX. I business, calendar we at are fiscal the on changed equivalent of a revenue be Nothing our look now foundry/logic would calendar

fundamental just even kind of been might capacity a CHIPS Prime How do John Suisse way just has multiple of multiple with several diversification quarters. and years saying it's Securities you consistent kind afford out Pitzer set the very and your playing So think (USA) underlying opportunities Materials? we've - for what Minister in several the customers, what spend, and perspective. up curious through next now of LLC as Applied regionalization over incremental then it see nodes, W. in the And of this COVID my from capacity. that kind building the potentially spotlight a has maybe follow-up moving strategic of got We've guys. for I'm of Abe manufacturing I commission. fabs helpful, on more has EU shone Gary, talked Washington. the a one things semiconductor of That's clearly importance Japan is Act about Japan, Credit its

John, Thanks, the question. for

strategic of a and echo one two we're of my COVID-XX the are with call I'd this, look and your foundry/logic acceleration said. think take major strength on XXXX. XXXX of Dan home. also if a ago, twins from also technology first seeing what every at XX-year-old learning nature And Certainly, is an into semiconductors, transforming with what's only you what but our not back I industry. step I gets and driving doing customers was question in you to about it and back So nights

e-commerce. locations, You working have from remote different

accelerating, you talking companies of now. things living foundry. leading kind secular we're a from transition All right many that see silicon that the of are developing and also workload-specific about going And multiyear that's custom been those to we've all

talk also see the you And recent future, it's the connected trillion when again, what semiconductor for power, get the roadmap foundation announcements. all look infrastructure chips. need of the the really We keep think really you that area/cost need at So PPAC. that data performance, And to to devices per I to is about you to economy. of happening, the right performance some driving even for the the watt you X have

driving and to just So performance, you the about, TSMC right coming to encouraging forward you happen. way I think is we that certainly power United economic lower before that and I like perspective. power, higher States. cost competitiveness important it, that And were performance an absolutely to more going from talked And with at said fundamental see

thing the it's a great I States. for United think

also about Japan what's geographic on going talked You Abe in and in regions. other

that everyone of think I recognizes the these importance strategic technologies.

super-good that power, I roadmap, what's area/cost driving where clear future in to will position. again that's on Applied think even technology become and a everyone it performance, more is

that out it. geographic regions. in the with certainly it have that see different service we've I good boost Applied customers It's for our seen a different really number you've into described strategic move absolutely, the business, customers. is What as and So in relationships playing strengthens certainly a way we of that

John. Thanks,

you. Thank

of line question from Toshiya Goldman Sachs. with next the Hari comes Our

now is line open. Your

a provide of you update Kokusai good taking for and on Hi, very could much little Gary, an the you bit hoping acquisition. afternoon, I the thank question. was

be And what some that prepared bit but the the a you. on would of are talked last help guys bit logic little standing accretion Thank us and you in can it math, your little if remarks, deal a about helpful. of with the remind us industrial items? the You

Toshiya. Hi,

deal, to Gary underpins back the that talk about talk me that pass I'll then logic Let industrial it to the about and transaction.

as made the regulatory transaction, we've that on out a We need closed the lot regulatory of six front. know. you five we of in approvals So progress good this

to We So the approval we feel the have We're hope discussions optimistic about about regulatory progress. in progress. that we constructive to process. final close having our soon, good that close

financial to reminder, we So about just be good to to we is a date. expect And transaction non-GAAP feel progress continue then accretive to going close. upon the immediately as results

progress. we're making good we So feel

R&D we've just power, Moore's really our talked about deeply of how I about the Moore's scaling, believe And calls really I'm be customer three a over PPAC years emerge strongly people Toshiya, CEOs, two of roadmap. architectures just leading Law slowing to down, next And – I on driver limitations compete. also really that going regular leaders talk fundamental Law slowing customers a basis. or on believe the being see area/cost all down. big classic the with performance, with XD are to And the new roadmap you'll

to able past. structures, incredibly forward. and that happening materials, be drive those going all not be ways in we're chips to new the New of been to together, power, just going to connect new what's things I'm optimistic performance, cost going But it's

simultaneously. then or higher it we in has analyze, look what strong. we have And technology And technologies where and to is wafers you we another materials at Kokusai, Kokusai all that technologies look many process certainly and of architectures with some what those gives can temperatures. when future they can They memory create, look of those like, combine connect can other many, to look go that shape, much structures some of modify, Kokusai the structures devices. at if you So very like, some unique future

really So the we value. strategic communicated haven't a on lot

definitely we've tremendous Kokusai that progress that. different relative be market really will some be to certainly, closes. combining And these tremendous the share are to additive made doing in as soon over together. there years, We the opportunities capabilities memory But will and our transaction as last few

in fiscal to Gary, market relative of about you And, the talked XXXX. your outperformance level year

of about guidance I your XX%. think etch growing you business your the midpoint talked at

about think achieved XXXX, of you be this to can compare that PTOR level customer Thank next you about the year up year, on when potential that well. into the would relative outperformance of and super-helpful. year you on what think if of, control I based your (XX:XX:XX) process conversations, wins you XX% aware the business your in being as talked you're and contrast Based you. some

one Toshiya, actually things some in, customers, the about having working really optimistic. customers, but I'm in of different interesting R&D we're probably more with dinners our so that and key certainly environment of I'm of that's those I very again, leaders just and miss current the frequent connections many with

customers deep you roadmap is visibility happening going next power, because we have driving forward, driving deep and the wiring at about, structures the have the transistor what as X-nanometer nodes And area, performance speed And from cost, at customers. the If reason with perspective. I X-nanometer the next-generation and memory is look into is talked and a we important we're incredibly for what's co-developing visibility. also

All areas say, and engagement of and those very, position deep in look a we the when nodes, at N+ we've very, insight have deep all logic. like. architectures into look better never what we and would of foundry very I And been will certainly those in

SymX continue We steps We're etch our those in with position Y. grow for will critical business. a delivering customers. most We're the the to with technology great on yield higher that

delivering there. particular early with platforms to great we measurement, also the our our relative a inspection/measurement, technology processes and next inside to the in launched driving have we've that better And when and very, in we you our that been also have innings position, new that accelerating position really new adoption. I'm customers, materials, continue nodes only we're look PDC but integrated not to at a But in In with that and and in business, inspection materials optimistic. we're the outperform then So two we're synergy and with never very with the structures. we've labs new just really those Applied's customers

of in in and also visibility look our what visibility terms position. high have high very of those architectures will terms We like

Toshiya. Thanks,

you. Thank

Our next question from line Harlan Sur the with of comes JPMorgan.

now is open. line Your

on Good the execution. job great quarterly afternoon,

last to As in in strong it's follow-up especially traction see process to optical inspection. question, the a e-beam good control, the and the

market. think I a opportunity, of a billion market it's to the sticky that's $X.X actually about $X.X billion and part pretty

as term intersect So again, market then opportunity plans the Any what market the to And on that the billion win enabling this here? for well? opportunity team differentiators Applied platforms. are the discrete about for another to try side, longer are metrology team and $X

for the question. Thanks

think really One you be look said and there things and over with roadmap the PPAC fiscal our the just technologies customers. rate. a if our our important I'll greater you But about in Applied I XX% the $X business billion that talk in also, So two business year at really PDC. I and we'll than within growth, are here significantly to remarks, and are accelerate PDC, And PDC at service ability year, with minute. also look in PDC prepared if systems on our this growth that as is this a

PDC introduced is the fab. we've resolution driving optical fast it's a look you and drivers the have are adoption resolution early if very customers. about then have new adoption is really leading that million inspection it's generated towards of the revenue there a already an roadmap, the It's that from in customers growth, ramping two PPAC inspection system, year. new technology this also And new the at electron extensive in targeted has One hundred And pretty optical leading points major really dollars with system, year and very XX% market with the other a at that already in multiple innings where of inspection we're has e-beam this of some of you we new higher that perspective e-beam So that multiple system. in inspection optical And line we've imaging. today. new still the certainly the technology highest several And monitoring, optics and system.

So customer that March talking roadmap one in with about developing about with the And particular dinner with in is PPAC same interconnects – thing high future in the driving have transistor the technology, nanosheets devices tungsten. selective and I capability was or resolution higher ability to very when new you very, those gate-all-around technologies. had imaging correlation true this memory a like think or

e-beam technology this wavelength can unique the products But for of to reduction. is it thousands previous think with decade. today. of in field a columns those All the about higher enabling products capability foundation areas, e-beam going an that important technology, the It EUV our leadership relative particular is you next resolution, almost And versus really for that and we having roadmap driving have forward.

all our platforms. will of that different proliferate So across

synergy also with and things are the inside has the two also driving this businesses but our are So year, process really our been customers. with those labs better never business that our also

early of driving the So those drive in and both value we're I the in really continuing are two areas. areas of think innings those different

would true how do able QX. Thank make into were commentary, in I you But of that make based year, looks ship Dan, that think, And more have on you be first the you this still the QX, able would some exiting to insights And there. up? to of for fiscal team much in the up you there it of everything to your like million the $XXX half up or backlog of wasn't spillover QX? much

Harlan, QX. out unmet all And team, so in answers, talked operations team, our types, team, fiscal million. done months most about in the That environment much just color difficult recent three originally little of NAND, job you have a making and chain between chain was on foundry/logic, ago. logistics an a across demand better quarter, our our one than DRAM. the as device $XXX previous spread fiscal We partners Hi, supply million $XXX in in of the thought amazing heard supply we QX, progress our

got QX. that million we've And of significant go. fiscal so chunk $XXX more in satisfied got to that was a We've

backlog that to the And market true fiscal will rearview is Our of our fiscal QX, on confidence our strong are look it be that did that with unchanged. strong we QX, the a fiscal by about make seeing our we across we're is And demand company's that to has strength at me their bringing continuing we're ago point we customers expectation three first are call market made see significant on calendar that last QX. I exiting of a all the end strong end a and to is, mirror our technology comments chunk just QX months which carrying market into demand markets. look-through backlog across look-through in going is end true for virtually the encouraged only the innovation and fiscal QX, the market roadmaps. on is demand demand Not to I gives entering this our we're be our what in environment we our of QX. I'd businesses, our enable guess me satisfy pull as and

of environment And in. to a strong so it's endorsement we the find ourselves continue strong

Harlan. Thanks, Okay.

Thank you.

Our next the Company. comes Sankar and Krish of Cowen question with from line

open. now is line Your

is into different the DRAM DRAM much How subset the trying DRAM, be this more You overall from is fact or out profit? in translated NAND etch, NAND, conductor in this DRAM is spoke of to a whole strength verticals. strength beast? figure can logic-like about of your I'm coming and terms getting All is

This is Gary.

a is different memory certainly, high-speed focus big So for customers. a of number

like high-k/metal DRAM. have and gate that's etch business. you technologies, we've those significant the said on a our business So areas significant our amount we leadership, are in helping grown to also etch, And DRAM where drive in

adopted different And If a different the SymX devices. drivers really good and new are compounds with but look NAND etch so layers in vertical. to it are etch, have platform, puts us NAND, drivers, up DRAM of we XXXX as number share innovative have outperform in position really continue the is adopted of films, almost a conductor technology number node, since good that in points scaling to you perspective. the high-speed conductor at going there. gained it these very a you in really And DRAM about next-generation XX memories from being the ramp next the we still And in of

say, the about So to also Kokusai a our thing of and perspective. NAND. say And definitely talked other will with thing memory combination earlier, products additive films I overall in us I high this the is from very a Applied bit the be to selectivity other well – really position perform those would little very, etch I would

If you total grown DRAM different over years, mid-teens for of spend we've memory or our in more think segments. from the last XX% and the to back those share both several business NAND

will So positioned we we overall NAND to DRAM going very add and Kokusai and well think certainly that in both we're – forward, believe performance.

but less display Gary. sense, then makes your days, still a is very cyclical these And getting deeply is follow-up, That cyclical. semiconductor as business

long-term I'm So display strategic rationale How the of kind curious. of company? to important is the

lot a question. the for Thanks

capital-intensive then technology the horizon, TV, is technologies, growth gives displays confidence current a seeing of the sit As the we bottom. do into environment a larger think flow structurally coming we're that stages at the as to initial as technology there's we at both display opportunities look Krish, the as take to in of market opportunity What grow of forward a this more we foldable/flexible we in OLED market to think think and know now. the coming adjacent current inflections being see handset, horizon great cyclical company. a generation we're We core take about on there continues we're drive market. this some the XXXX. we than revenue COVID at bottom. post the the us we today, for we display the cash look The some enhanced here bounce as to inflections are going strengthening technology that the levels for to on those into markets, And And along off business,

monetize market revenue great core in the it and a enhanced for cash adjacent way it's flow and to technology So drive company. take to an

the of do Hey, thanks, Krish. lot so in operator, we ask we And still time no queue, have at like people to question I'd this please one that a follow-ups. and

us Okay, our so please next give question.

question the of with comes from next Patrick Our line Stifel. Ho

Your line is now open.

to control, bit color of maybe process technology outperform? the ...quarter. You been you mentioned a already, to some asked follow-up little can a can Gary, of that as give conductor how Applied etch. have of continue questions

maybe mentioned also you but a your little like maybe technologies, you on deposition and the color well? a nanowires, in conductor businesses of new more little I of gate-all-around, guess more others. opportunities, core some side Can provide etch have terms You as in the

a area/cost me faster higher say performance, the in that's lot technology. structures, marketplace question, Certainly dynamic structures. new the very I It important And power, I are for power, see a roadmap love and But one. And the let that really leaders architectures, better love going a this focus all you other for what is – the customers. are Patrick. I at thanks about deeply and really really, for about Wow, others. drives I say on the our broad that forward. working believe but than we're driving includes new interconnect that our is cost of performance gate-all-around, for really, R&D I key interacting customers. with would really Low technologies Okay, just customers. talked there

key, also New interconnect the reduce wiring, a the in that's resistance you of driver key our technologies so all that customers. for

we're the together a the New that standpoint, materials from chips market. all packaging to connect ways bringing new to

different roadmap of say those structures, multiple creating, we look to of are at I'm we single super-important what the do that together PPAC different exists when And and FinFET connecting can And integrate that would leakage portfolio, those you shaping, a all a encouraged current talked today, a different our improve are to just there's platform number areas relative that if under one one devices I modifying, I look going things. there far forward. no analyzing, on driving that today. So thing so with, vacuum multiple beyond at where can about even manage products technology you or where interfaces, chambers

particular think see So FinFET. market improving And And high in is if that technology, probability next integrated that solution. you'll our there's the or coming materials XX% improvement I for a think a sometime is to important. It current an leakage in some you drive incredibly, the about customers. works again, of that current, year incredibly in

our technology That being of the combination all electron data have that where increase Applied. for Again, printing, capability with image We can number our selective and diameter together the the gate-all-around layer there's recently can, forward. are XD points Those your of kind developed, highest fast insight of for resolution combining in really and developed actionable wafer, like technologies. can announced within development is in thousands look technologies which customers, learning technology with to analytics these industry resistance. big a a and to tungsten, areas have I atomic things nanosheets. massive, imaging, imaging talked a You driving also the or different just you new the proprietary look a we're And process so work on innovation. and we algorithms the that windows wire high-speed of distribution, the of are reduce roadmap thing dial driving the PPAC other at at really about, spatial in very beam machine you key of that lightning technologies unique, where and the those is game-changer

those of enabling, many of creating combination a really and it's So materials shaping, films, modifying.

of unique also the that means way. technologies. in We very have things many technologies, we're combination The unique unique together those many customers strategically a analyzing connected to

into are been facing. their critical insights has technology future nodes, never unique have stronger. We customers our the pull, that And architectures, future customers from their that challenges have the Patrick, we

Patrick. Thanks,

you. Thank

UBS. the line question Arcuri of Timothy next with from Our comes

line open. Your is now

really like that zero you Commerce? you had stuff. with there the end-use recent sounds bigger wasn't of implying call? indigenous on the And $X.X you picture impact Gary, question lot. question question is market. picture And about I update can the it from us were really, more it They any guess in had military here, expanded like sort last discussions of seems on is, the and coming the And China. can I overall a year half guess WFE I is, talk impact. my really this my you indigenous had from billion a like growth than bigger And China it Thanks regulation

of be further discussion this So that the and restrict Thanks. or sort additionally access? could effort whether tone there a a for truly tells it the you to is while what are of

off then question. market answer for the Dan the I'll size thanks start can Tim, question. and

impact So we what going what discussed and on as meaningful we've in that speculate is our any assessed similar We've to discussed. our But actions place. to we've question, business. with continue can relative the we last to future today rules, call, seen see not to geopolitical had the really, I'm what no previously on take consistent and

also Dan I'll so the question. market answer let And overall

Gary. Tim. Thanks, Hi,

quarters $X quarter, quarters market, now of $X end in think, ago, spend. that in about see of the that about or we've $X.X billion think for last said I domestic we market saying incremental a be going off as billion several high the China, China of billion range. to XXXX, at been we So to we couple we're a And of baseline

ecosystems, billion we're slow, as at market of profile spend. China, steady viewed about spend pretty see with that do quarters I the think we in consistent so And how for roadmaps. we development And of investment several about in technology $X.X It's now. of

that. You see modest additions capacity behind

not more capacity And But geometries. spend XXX-millimeter it's see It's more. probably XXX-millimeter, year. more. lot a You a a across little see little we this

investment from in a device see DRAM, You NAND. standpoint foundry/logic, type

quarters a in profile profile it's their the spend So steady no the slow, of balanced several real but ecosystem, viewed now. we market change really of for development and as

Thanks, Tim.

you. Thank

question next Fargo. of Quatrochi Our the Joe Wells from comes line with

Your line now open. is

for that about the normalized I demand think more you that driven into for can see talk XXXX rates Thanks additions? year? kind wafer taking this transitions versus question. we of of in technology as about how you're if wondering a memory. little was about being the we seeing utilization And we bit How do think fab do that kind

Joe. Hi,

year still from what customers. don't see is market great us thing big and the still one well performance the deliver our we enabling given we're a we the to standpoint. the positioned technologies that We see the back of a about encouraged investments spike market. our capacity of things stronger an today transitions the see to that's customers in their about for It our the see And of of we innovation do just in growing half that standpoint roadmaps. technology nor relative really shows we're overall from key than we're opportunity, business So

a of really a capacity from lot roadmap continued the wafer see We don't we going technology investment standpoint. see into So starts industry.

And, for more questions, operator, Joe. we please? two Thanks, have time

comes Quinn Needham Our the & of question Co. line next from Bolton with

is now line Your open.

I we've to comment just maybe year that you looking And to foundry/logic for I last that like not If because going next a shift addition get to better one, we're XXXX. into on all I wanted question. think mix feels the two, by I capacity said I the as surprised And probably follow that head heard that. just, memory it in big your up guys. a comments, see I'm and you it. in I confirm wanted if Hi, guess been mix memory. the prepared think between stays we same, didn't

So could looking perspective particularly I calendar was on from into on expand capacity you memory, a hoping your XXXX. thoughts

Quinn. Hi,

seeing from to we're say XD market from I continued in being see see investment It's strength planar the a of architectures, technologies, is and we're concurrent proportion it what our this a this roadmap more in going more is We in spend foundry/logic. what XX% in industry, Over We the standpoint. go year. would We in it So market investment technology going next is be see as than year. than the spend proportion relates as the say of on similar window bit very spend to foundry/logic seeing to the we back industry XXXX, inefficient of if the customers. to And a little spend an And the foundry/logic strength spend, a year to continued more see of memory I XX% into this growing was the feels of new to foundry/logic it from XXXX-XXXX, level We transition technology addition industry. we XXXX. what there spend about aggregate would related. of year.

capital CapEx more think a production into seeing the a efficient of bit you're rising, spend going but out Over much efficient intensity time, more much seeing profile. that's we you're industry. I see

is customers whether all balanced to standpoint types, NAND, DRAM. share very fairly we're say I'd And across a got very thing agnostic we're spend, so balanced we've other The company. portfolio device where want from it's a to foundry/logic, a

those up think in environments broad set well given our to I all perform portfolio. we're of

continue watch to the we'll quarter we're market, So seeing. we'll every update and on what

Quinn. Thanks,

Thank you.

Our line comes last America. the Bank of with Arya from question Vivek of

open. now is line Your

center their demand views that or for end your I it's hard I'm my understand memory an correlate are demand basis, demand? completely and declines how a of demand in words some on deceleration China and somewhat from have So basis, as customers some demand curious. that reconcile appreciate real-time are who your are on shipping How to reconcile you I ensuring encouraging and your you to taking on do to mixed the with customers but smartphones, mentioning data memory know some picture real-time but Thank we their your memory a doesn't in example? question.

our the Again, the technology our of calendar is first our half we reflecting DRAM NAND continued comments first the year XX%. of and up of year about all is XX%, we're our the talked doing half year. reflect is business pursuit XXXX roadmaps. XXXX, of over business Calendar up strength calendar And business,

Over the last couple We're XX%, both the quarters up sequentially, us almost ago for performance seeing memory recent was most NAND in up quarters XX%. quarter DRAM. sequential and two

more market bit. cost it's technology a our growth capacity the the of of the customers a in demand requiring. of And our technology drive their from modest that roadmaps our business define an with is as what customers, structure bit the We roll And continued environment see additions cost so on for in demand we're it's to per investment standpoint comment where roadmaps roadmaps. seeing out

today? thoughts Dan, Great. Thanks, your closing for any Vivek, And, for question.

Sure, Mike.

safe. to doing really cash aggressively difficult flow We over to stands really total our especially that's translating want and and all partners strategy for time. quarter, we're look environment investments and a meet for business are our up a the customers' safely. our many and our across and from ramping and outperformance Mike, forward and install balanced of employees base, to throughout that now device thank have share in we like growth it let's in I like in virtual quarter. this seeing predictable needs the bunch of a how to you as us that's Citi call. me, then, the at what of generating I types. going is close Conference events So out sprinkled the revenue market. in give the keep our one-third company, Until I to whole more

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

this Ladies conference concludes Thank your participation. and for call. you gentlemen, today's

now may disconnect. You