Applied Materials (AMAT) 12 Nov 202020 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 would now like to turn the conference over to Michael Sullivan, Corporate Vice President. Please go ahead, sir.

everyone. afternoon, Good for Earnings you Fourth of Quarter And joining XXXX Call. Fiscal thank Applied’s

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

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

I in $X Materials for to am run-rate of first report per Thanks, fiscal pleased hit annualized Applied earnings time. fourth and our the that very an Mike. revenue share record delivered quarter

results we and fiscal we’ve for employees, earnings These suppliers adaptability. to partners all in navigated the For products success. XX% and value technologies year, significant, want and are considering thank company disruptions strategic impressive our all long-term the XX% their this the really investments the revenues unprecedented more to year. while new highest industry’s address I position and grew the for resilience problems making and sustained,

and kept development and our ways working, on investors, to switched on commitments customers product new have and technology to of teams track. Our our delivered

working drivers company call, of end need by our highlight sharing over keeping new date strategy this the major and the will ways, our remote today’s are view protect Applied’s environment. that of and our drive and XXXX, of I benefits is about our in very support I’ll especially While market growth. our excited our our inflections conclude am begin our the of accomplishments health In current long-term to the the years. of employees to some growth I’ll R&D. by in safety profitable driven shape a while strong, actions fiscal as long-term will I’ll outlining Then, and the that year, several describing next investments markets before by

of in our infrastructure, we adapt post-pandemic more for and is era, transformation semiconductors COVID-XX combined changes challenges communications companies building are and the see the on Investments us whole, that world fundamental the economy aggressively equipment by the driving seeing demand. of their In we fabs customers are and into created are the accelerated investment with As levels and lives to XXXX depending we semiconductor IT in current driving many prepare digital This sustainable robust fab wafer beyond. out confidence and and foundry-logic, ever. as advanced R&D. than a very gives areas and leading-edge

the roadmaps. technology perspective DRAM then outgrowing positive. than remains XXXX. Consistent in faster very forward with We their shared growing with growing DRAM therefore faster for push due addition, markets these sectors an this is memory, customers In XXXX as XXXX In underperformed rebound. as to see in significantly XXXX, we and NAND than represent on industrial outlook call, NAND in the in and and our automotive, upside spending headwinds foundry-logic year August specialty

can are independent grow are mix. the the and spending market demonstrating We we of outperforming we

quarter. an semiconductor another XX% – systems quarter, be mid-point the our This revenues all-time next will guidance of up were

grew semi systems year, with and XX%, types. products broad-based fiscal strength device revenue across the For

are interconnects. benefiting enable from Our materials leading-edge creating traditional leadership modifying for and that transistors businesses that and provide structures solutions innovations and

on In shaping billion. year-on-year. strong demonstrating our XXXX, business grew XX% $X.X XX% In have growing momentum. XXXX revenues that share materials performance analyzing we’re grow structures, to nearly For interconnect in to technology fiscal our and example, revenues, focus is and and fiscal to nearly record our deposition etch that significant generated our metals our we critical opportunities businesses business

are as DRAM applications in conductor etch win foundry-logic. we in share new gaining We and

business Our record as delivered XX% the increased revenues for also inspection performance, systems year.

traction customers in of We and in share are and have inspection winning optical significant products still early E-beam that stages with with new leading-edge adoption. wafer are

uniquely Performance, Law is leading of down, how transitioning benefits new industry scaling is and to a our us is positioned the includes structures, geometries to because new As and traditional key to packaging new a playbook. of the new technology. in PPACt shrink breadth playbook innovative playbook new to Time-to-Market this architectures, it technologies new advantage are combine ways devices. XD accelerate Applied drive The describing slow of ways. materials, Power, companies Area-Cost to new portfolio This Moore’s product new allows

new Integrated in example, a This revenue of where customers For a patterning generated been solution co-optimized open combined in XXXX, is $X.X the IMS. product winning a with differentiated delivers call of hard-mask we a new multiple hard-mask. that or Solutions fiscal products billion etch a novel of with Materials example new have we applications across nearly great material highly to we class

have We be very our market the years. to leading next numerous and engagements excited we’ll the customers bringing about IMS several with IMS I’m in products

to broad enables where chips ways. is area be creating in value advanced are new our using capabilities packaging connected we that Another

fiscal scaling, the record is for revenues up from business XX% year, packaging of half a Our XXXX. dollars over generating billion

a of partnerships. We footprint are eco-system and our expanding combination investments through organic also

levels. XX%. grew we increased also service by business AGS and by agreements the to the of from long-term service, record quarter record for year. revenues AGS number tools of covered XXXX, the to Moving fiscal portion subscription-style The generated In delivered also revenue

now recurring from XX% our and parts stickier more comes service result, of a spare business As streams. predictable these and revenue

high, in target our challenging renewal in the illustrates see products. advanced we long-term at Our customers market. Display, are hit our revenue XXXX very more portfolio service XX%. for Rounding a than also rates value agreements our This out with

significant we shared view the XXXX with last changes in this for call. to Our our outlook is similar year no to

However, increasing IT LED include: adoption in we see be of applications, to OLED smartphone Organic higher than leading for that a launched are adoption indicators point foldable watching market we’ll OLED XXXX. future of some date with These encouraging starting in growth closely approaching adoption. to screens with XG OLED equipped handsets more the could and spur handsets XX% that OLED displays price the of volume

the before, market our and we I’ve display about for said available inflection on opportunities expanding market. OLED Applied the As are we the long-term optimistic as addressing focus in

plans the accomplishments lays actions out for XX-year a and announced a environmental Future’ We behind our Better vision roadmap Xx, look suppliers, to This the our our challenging with Finally, to operations, our and these as to sustainability new global ‘Make this proud social and and I holistic company call used summer. technology can goals our of roadmap our year, We’ve advance commitments. considers how work framework XXXx, approach detailed taken customers scale. new to a am we for that how on back be we it over very around that on we’ve and also XX,XXXx, everyone. the I Possible used responsibility rally

describe see a for Before I’ll we the minutes drivers growth to Applied. few I take longer-term conclude,

opportunities enabled healthcare. AR/VR, to our displays and numerous, that I next from trillion-dollar As advances personalized of decade, be better. next in the electrification transport inflections by to and never engineering, There have can look ahead been materials are generation

means data-first world a to application-centric will to an data. or Al the and from the will electronics create inflection to area limited and everything that generated humans’ no be is will one where touch that be industry machines. moving out the This economy. really First, are and of by every However, has potential longer implications consume semiconductor we change eco-system: by the Al. has and all growth data the also stands major industry’s almost ability consumed major it Al for

Second, workload-specific industry. computing available and of silicon. to the the designs for computing new new is data And neural and types diversification hardware customized Al of from power of third, best volumes training make networks incredibly will entirely intensive. devices massive needed built is for with This of great work approaches the sense

of investments the industry accelerate drive the the we in Performance, is needed Applied So generation Materials. new imperative to The the technology devices. the for semi potential uniquely industry’s improvements in PPACt advance create opportunities there performance-per-watt to advances to Al to unlock computing of of huge playbook, a solutions. We’ve And, strategy future. for positioned aligned Power, and are for our vision this next Area-Cost around and Time-to-market tremendous

over call to delivering challenges let the hand the Before of performance. Despite quickly Applied summarize. XXXX, unprecedented record Dan, is me

technology in overall transformation semiconductors infrastructure, market the acceleration driven of strong like etch of outperforming are have trends, very key outlook for Al. inspection. The growth digital an by IT longer-term demand strong, momentum and especially and and remains businesses, We areas

future have opportunities never better. been Our

Applied’s that technologies are the next-generation have Al investing and for for We growth. laying groundwork ecosystem in been critical the future

playbook look PPACt for is the we new yielding our as customers very products market about the ahead, accelerate I’m innovative in to to will excited already XXXX and solutions and results integrated beyond. bring and strategy Applied. Our And,

I Now, turn over to Dan. call will the

our for and perspective along some share backlog business I’m QX. the to our delivered add installed developments on I’ll performance QX results. in business and entering Thanks, noteworthy you our my our I’ll provide next and with Gary. base Today, share our full-year ongoing revenue challenges our company despite pleased year QX related that our outlook Beginning per with fiscal with earnings performance, record COVID. I’ll

Semi QX direct a shipments of and and record our XX% which disciplined the from above revenue segments, the customer increase period now to year, and significantly increased all year-over-year. that and we very higher did you was by EPS earlier and profits in resulted guidance versus look of the to revenue healthy trends year managed at up same we record revenue midpoint in manner demand shipped operating the of our cash non-GAAP delivered unmet AGS. XX% by teams across a operating In and system year-on-year, support Our profit XX% $X.XX, the QX, business. our see continue all non-GAAP in in grew last this of in including our gives We’ve flow. free backlog the guidance we delivered We Systems

comply About operating of needed with QX to our customers in $X.X the our for requirement We to China. XX% flow cash our government We’ve U.S. where new revenue over up year-over-year. for the a QX. and requirement This also into reduced rules. applied guidance increased one imposed related in months quarter, already to foundry two licenses licensing billion, our

our of by combined full-year Turning over pleased with and Systems especially year-over-year. our results, XX%, to Semi growth semiconductor-related the businesses. AGS grew I’m

past upgrades, which our plus base installed grew includes represent close stream service agreements. long-term our This but factor AGS, agreements Within had the across a agreements XX more we makes of third at an majority years. We’ve agreements revenue. in one-year years. growing annuity-like by about least resilient third extended outstanding to world-class generate over developments yields, of company XXXX, Our millimeter of close we’ve over our and relationships increased Applied’s Until a the growth revenue market and This the by provides of underscores in business, XXX year-on-year have three of a three signed of are terms the customers, X% service positive with using these over cycles. of to AGS terms, to who a the that recently, continues our life us data-enabled had seen node services vast output costs. we part working

nearly XXXX, grew we XX%. of base by our tools fact, in the data-enabled In installed

and non-GAAP For the revenue gross of by XX%, in Semi basis XXX AGS. OpEx margin increased grew delivered by in XX%. Systems whole both XXXX, EPS profit and invested non-GAAP We record points, increased and research we non-GAAP XX% operating by company a development, as in

agency cash $X in nearly as the out generated as returned our Kokusai caution cash connection that QX, paid limited billion the raised the We dividends $XXX of with setting our a to flow also Chinese allocated to to buybacks, stock of blackout $X.XX billion million, the row, an reviewing the a with by an dividend were prepared and year buybacks the of record a average $XX we We of transaction. and increased $XX.XX. billion Electric for third repurchasing shareholders. at operating We our is in price for legal nearly transaction. sheet balance imposed discussions Electric regulatory in million $X.X $XXX new Kokusai abundance million trading In stock department on

year. We the end discussions we’re continue to constructive the calendar secure have the before for working and to of transaction clearance

new Next record, regarding I’ll new we Applied’s the we The $X.X reached setting combined as our semi-related enter also share a year-end nearly in our billion. of year. $X.X backlog fiscal businesses demand see growing nearly color to billion record. some set QX, year-end a backlog

leading the and, the we’re recovery. eventual tracking Our Display as backlog Gary declined indicators discussed, year-over-year of

outlook. business QX Now I’ll share our

We XX%, revenue plus to million, or about approximately with expect midpoint year-over-year. company minus be $XXX the $X.XX billion, up

this $X.XX XX%, of plus be year-over-year, up X% revenue project nearly non-GAAP year-over-year. up EPS nearly million, revenue $X.XX, Display Semiconductor AGS $X.XX around or of up XX% up we to $X.XX expect $XXX Systems billion, about year-over-year, Within and or minus around billion, of We about revenue about year-on-year. around XX% outlook,

margin product gross due non-GAAP and which about and higher in lower expect to We year-over-year XX.X%, sequentially changes to near-term mix. is customer be

to XX-week savings. reflecting quarter expenses Non-GAAP holiday $XXX OpEx annual a million partially expect to increase month by merit increases We plus higher offset one from shut-down of

QX has around average delivered summary, and share around strong XX% Our I’m a QX entering weighted new pleased performance guidance count that XXX Applied momentum our of million. a assumes rate fiscal tax in and record year. of In

pull. products as levels record and Our technology backlog generate strong customer at is our

business our our is supporting becoming agreements. cash incredibly to challenging increased record proud multiyear teams and base under services delivering service more and earnings growth larger our shareholders. resilient for and global data-enabled circumstances with flow while of in Our I’m customers installed our

Now Mike, the begin Q&A. let’s

Thanks, Dan.

of not than more to can. let’s one Now Operator, brief us Please many please you reach help we question begin. ask one as just and follow-up. as

the [Operator from Evercore. of first Muse from Our comes line C.J. question Instructions]

please. question Your

the I your assumptions mid-XX% looks grow DRAM your going question. first And if Yes, and around at DRAM. that’s better like you’re we’re industry-wide. January it far good business afternoon. quarter, taking make Thank what you guess, than for for I to my look about seeing question,

on that probably your wallet I of growing segment that’s in you given about conductor with for outperformance discussion some discuss share So that what’s And fastest we driving think success etch? guess, including should how your can DRAM calendar sub XXXX? the

take I’ll the Yes, question. C.J. thanks

close DRAM throughout is pointed built this significant signs to year business strong. very momentum the we strength expect and the year you our As year. showing out, of We’ve

XX% the market high think probably the that against XX% this range about end of WFE. growing the backdrop in probably we rate of As overall year the to of that’s DRAM industry growth an overall for at

XX% year higher business Our a overall is over up industry. against for overall probably systems the of couple is a be market points as than going to that the DRAM calendar

outperforming. can walked you see So math seeing company last On call, the the a based standpoint. Gary you quarter’s the etch on through, about momentum significantly we’re that talked from is conductor

We’ve positioned think metal well on coming really really, we’re And get there. as the really about, high-k device. the seeing while things about inflection a and to market, off been performing standpoint technology is strong a customers’ like roadmaps team then speeds you and to talking the drive So adoption. well gate and that from for IO DRAM into the just our

the adoption So going in drive and good continue performing this backdrop technology. we’re what our But we we roadmap as encouraged a feel we’re and really would of customers’ we how of performance and market. see to next about strong really we year the against clearly, forward strong continue to push by good strength expect the

little maybe This more Gary. is bit C.J., Yes, color. just add a

For where we different spot to Dan with logic-like products. like said the sweet have that’s number of as in the a high processes, where more periphery leadership of more moving is speed,

XXXX. unique etch, So we’ve growth XX that’s part of conductor the I our of think points the that’s last seen DRAM. inflection, share fueling since earnings I in really a gaining that DRAM And call in talked, growth about about in our

of outgrow future continue the really with really the growth, enable market grow in that’s memory to so that to the the And our feel for SymX key and continue we’re and fueling inflections the DRAM. technology etch, to we high-speed – and going also inflections the good strength and

and of is my focus and multinationals could on you perhaps overall sustainable, could with breadth China? there greater will follow-up, going XXXX out in out if I on think what’s CapEx concern then coming that given as probably if China, that of should on impact how on seeing the layering you. you curious the Thank see overall the we’re about we’ll But of in And I helpful. we thoughts calendar offer that is China numbers have and think types guess, domestic Very particularly SMIC. not spending what

Yes, sure C.J.

were anything me end. in the of to the spend. And both it weighting about having and market customers multinational well But in the as that customers over customers. of if on calendar Let overall spend add I think year are to Gary an groups see by if would the at From standpoint say XXXX, see as we meaningful domestic jump I that market meaningful the multinationals. domestic spend, favors both wants

I is investments. broad-base you see of think what a

you’re XXX NAND, within geometries, millimeter in You’re investments millimeter geometries, seeing XXX investments DRAM, logic. millimeter seeing geometries, across XXX and foundry,

device types. won’t won’t would XXXX. to that probably From the We but So see all rates the you that growth certainly a those but strong growth into It’s show we growth XXXX. see going customers, be in categories. to year, continues spend a both still think multinationals I growth We more rates. domestic in strong did than standpoint, expect

market. So we a see, good it’s

to and that in see build for disciplined strength future ecosystem the slow their continue in a to manner. they China We see expect as foreseeable

C.J. Thanks

Thank you.

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

please. question Your

Yes, solid good the on results. Congratulations afternoon guys.

question to C.J’s Just China, follow-up on Dan. on

much that the we you about about the first Wonder it fiscal of prepared are your quarter. impact was or fiscal now thinking SMIC with it? represent numbers And fourth zero impact You can forward-looking the SMIC ruling if quarter, of confirm did just your does an against us there? talked how within impact kind in comments how

John. Yes, thanks,

what I you. is Here can share with

put was in fiscal two-thirds on want probably the the can too about, be our we requirement through what fourth but doing, to imagine, place any is customer way licensing one it don’t of detailed quarter. As you talked we that about

or that four about exposure new requirement. saw weeks five we to So

have those been comments, if higher QX guidance QX had in and would As the restrictions prepared revenue been place. in we said not

So fluid. complying already where the licenses need We’ve remains we with them. new we’re situation for rules. applied Trade

So the about would to we revenue the But in future. speculate for certainly requirement. QX have been higher, don’t want and that absent guide QX

time. As would a working going continue and And of for you governments requirement relationships very all in to long again, us for we’ve China types the a be the with strong to market licensing it’s got broad-base we been expect China know, we’re get We’ve forward. device to across satisfied. and

the tension. But That’s China. lot clearly into helpful. are trade around conversation follow-up second lot of the U.S.-China equipment had side now of Gary. strategic there’s then maybe restriction for story And a looking been around shipping of for semiconductor a concerns my capacity. a where necessity for Gary, the at of There countries

you about have U.S., announcing more like perhaps in production, talking things the CHIPS the domestic same. Japan, in year. foundry a have earlier officials this in the been have You Act TSMC EU Arizona incentivizing

just this driver, of And kind what given of So of the how kind a business? be, your vantage of think trend this will potential capacity? do of could your I’m for semi be curious, in it point you important industry, idea regionalization growth

for the John. question, thanks Yes,

the Moore’s going talked look not the different very is enable XD the cloud. Law AI scaling, the say lowest to all the their the about drive enough at infrastructure would really edge highest power, is roadmaps, I future I before deliver first-off, our focus deeply past. at being to to that major roadmap and and believe So customers in that cost. the best the for classic performance chips I’ve than And future

many that highly trends do alignment and to to new that of for your customers with think near-term going strategic and regions, see in see and question, trend, regions we I we this some that’s countries do many big — aligned certainly, is moving believe, with So I that that I continue. do kind with

look for past. opportunity the I terms is an great to new than a service technologies as going believe us. the are Applied creates of different these customers moving new support R&D, do their regions, these as definitely all said, future of it for of then And ramp, that creates opportunity going transfer more even the regions, forward, accelerating I the certainly into to in So important,

technology the industry how We’re to you point drive inflection an at forward. in the relative

beyond packaging. of two about playbook connect computing talking ago, And architectures, every elements shrink biggest two slide together if chips talked and customers roadmap the what around look new I’ve materials, five months XXXX you One to the new efficient aligns new to the structures, to of exactly it with months been at energy about ago, new double ways our ways with new advanced go their years. two

and PPACt So exactly new enable been Applied about position we’ve to what is a really in great integrated talking products and solutions playbook. innovative with that

for I at a and that to this So been we’ve playbook in point very, again, first and I the and get that whole going best infrastructure the think going countries are an better their inflection the aligned forward. new are industry AI the And believe win. do to is never position. very It’s companies important

Thank you. John.

it. Appreciate

Thank you.

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

Your question please.

question. first Good is question afternoon my guys. for Gary, you and Hi the thank taking Inspection. on

I up remarks think XX%. prepared about business you your being in your talked

I business your was systems in think was it fiscal XXXX. XX% up

peers You sustainability a most most and think Where you are in the peers, into should Inspection I’ve follow-up. about And seeing all not XXXX? got that timeframe. probably your business we your outperformed for if quick traction of that how during

for Yes, question. thanks Toshiya the

we by bright XX%. And business as grew you real revenue company. absolutely Inspection for the mentioned the systems So is the spot a

fairly resolution analysis the a are certainly – And on thing And really, of And all leading PPACt have would aspect, both in great some adoption these of is technology. of strong new soon areas, have new important for in optical and able the Applied product that we structures in that’s that’s new we’ll really when imaging structures, all innovations, roadmap. tremendously grow have the some seeing the understand resistance you have roadmap. market I that around all structures those the also other think We our driving – these connection make driving the than The any of higher the the product unique products or business, the the to an to that having power lower a dramatically and around the inspection other wiring initial gate PPACt data this capabilities say, the is modifying to leading drive these today. in rest how to together business on of official for with Being different with capabilities. system shaping a high tied and we see to e-beam synergistic launched films improve new all launch in of room product has e-beam lot and transistors, customers. about we and performance

in really of that early but adoption capabilities. connectivity the I’m rest have about going we’re confident the for So Applied’s of our some PPACt excited accelerating PDC to of these business beyond, good very roadmap in customers. really from also and really we’re results the new to business, the XXXX I’m

thanks fiscal correctly, should you. margins slightly gross we I that follow-up, number at you lower, higher, is sort recall your about about my think or there for a margin, think the gross cadence? for upside longer if you you to of how Gary. margins, target multiple on then term, recent up and internally a impact a sort Analyst is you it think gross just number, for of know as levers the on that and lower gross still And both downside Dan, right to I But Thank Day, QX. margins I guided put XX% multi-year but most that are Great, could when the

Hi. Toshiya. thanks Yes,

margin well. gross really performing the standpoint, is company a from So

comments, XXX XXXX, you the basis If up fiscal Gary said we’re in points prepared year about in what think year-over-year.

that’s XXX and that QX up as little temporary fiscal like reported And look down It’s we but reverse Our a QX. out is year-over-year. mix fiscal itself sequentially, to you think pointed into up fiscal different year-over-year. just basis we QX. points as the mix some we’re out, bit little look see going still into we then We a our we

the we I So the in due the of When at on on depending we we in we the are think about points. the if margin, points cycle. at or plus in headwinds long-term then the minus experiencing X and company environment be minus to the well XX% it end be look you difficult plus a best just we where upper pandemic, the printed way referenced would executing and think gross quarter the of describe or think you X factor is environment. XX.X% COVID of to we some XX% current range And that would we’re

performing framework current the So to around and framework long-term think is the from impacts pandemic would gross company as margin. model reflecting and around holds the I see the to well that you that margin gross the wane, think in that legacy that environment headwinds I the performance begin

you. Thank

Thank you.

Malik the from comes question next Citi. line Our Atif of from

question Your please.

memory important and the Hi, thank you which comment you my an of that in which remarks leveraged in mix, or your talked from distinction independent made about can for taking And guys question. you Etch some Gary, outperformance towards of you logic. an markets. Inspection prepared is the interesting grow your peers, are more

are where Etch different next about excited or or you into Looking Inspection year most market?

the thanks question. Yes, for

point, see faster that’s the able I our an also has edge the That at and fundamental a And customers cost playing others, companies than be this out terms in to deliver competitive from higher driver the it’s I I you Law most what excited marketplace can ecosystem infrastructure about, I at many I scaling say, lower view would if customers performance all cloud. look at the our to power ecosystem. around companies future the that and standpoint, inflection best of this aligning that going see industry AI important am really believe leading is of you and earlier. that the the not So had what classic about enable in the Moore’s talked of and in XD and the

and So structures because are create, have many we in combination of Applied outperform, connect shape, analyze to modify, unique and used a products devices. technologies and is to great that position

business call I PVD, on our think and to XX% we combined about CVD to So businesses. This about of deposition we amounting the I grew epi, $X.X performance our year, of last deposition our in billion. share year, billion. some points talked metals X $X.X Last gained

And So next we’re unique really also new That’s go stats, And our and memory well great these forward SymX advantages. foundry with Applied and expanded to optimistic Conductance drive really, mentioned to there. platform, we’re very from probably stats the capabilities. etch, technology there future significant logic, where wiring, the structures based opportunities we’re as you very are One materials about and growth and to businesses chamber. is leadership materials the our strength fundamental other where transistor best are performing We’ve real and last are really, you platform I’m PPAC moving roadmap. the is combined as as in in year. in on we customers in really really winning this enabling Materials. generation etch, key our to EUV history the conductance. nodes, remove of winning performance etch beyond

structures that re-depositing also particles issues, on not you’re So these are the deposited performance causing and on chamber. yield and

we is particle that on benefits seeing with platform So – the they technology. yield of SymX, customers, often giving the SymX that’s that leaders with night just we’ve benefits fundamental performance. that logic on or a one with Also with enabled particular and I’m with that are the better again seeing yield us last are new top of advantage the our phone, R&D coatings

we’re I and the really very forward. in to about go Law inflection or as the and is So a and in some and structures point, the of momentum business about adoption modifying analyzing, is at I all etch products. I’m creating excited new that are not phases Inspection believe and as about scaling, devices, good the very Moore’s do thing of optimistic key you again talked about I’m future XD But look that also very, what the unique I already really position. talked we industry most of connecting we at relative early and classic

So technologies really are again, doing the a perspective, at different we AI mix well I future enabling we’re of believe foundation from for that in infrastructure. this and environments the

in And billion still Great. this WFE that China for follow-up $X $XX my Dan, as is range to year? domestic billion

Yes, that’s correct.

to on over range. that billion We’ve to It’s that on that pretty changed. be view hasn’t Our $X time. billion consistent in $XX been going

Thank you.

Thanks, Atif.

you. Thank

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

question Your please.

I thanks hi, of Yes, them. taking for had my two question.

Dan. at the outcome Kokusai delayed And December for a what I the increase, can to same for any had you tied for follow-up then be happens Kokusai Gary. it really of path, kind targeting and one buyback the along Dan, end is close are or of it the acquisition First still further?

Sure, thanks, Krish.

So, as the five you the know approve of we’ve regulatory gotten authorities transaction. six to

remaining with of year. receive constructively the optimistic end We’re and be the we that authority we’re calendar clearance to continue the going by engaged to

think combined So company focused back the perspective we’ll the the of we’ll community buyback From a a give will model company to forward investors perform. to come asset, integrate once next transaction, over how the we put investment that. standpoint, combined and several I a stay on close the years

shareholders to going As cash excess that some happening company wouldn’t see is, for forward of of about our opportunity. a industry if we work our what we’ve that repurchase put capital higher quite the what this in back we against see part our standpoint, think from strategy the stock, of see And doing highs, opportunity and capital an overall given time, talk but there’s structural to of is I We going share real what a it’s giving very structurally big allocation growth communication, all which market shareholder we’ll execution and be surprised higher larger, buyers terms now been friendly standpoint. the we of from lows.

the close probably get investment that community for So we’ll of what many but together we’ll conversation continue years, transaction. now been we post we’ve have doing the once

to ship Gary, Got AMAT business the U.S. needs you might caps other protect it’s political on or it. this China, angle, your And also then business or engineering long-term do practice think the reverse but China, and for from a from on question Dan. Gary. philosophical – standpoint, a competition a side how at a or looking side, one to enable term but semi local your I’m good from it not for customers, Thanks, longer of flip because balancing you on do is IP.

bigger? I’m China So how curious as do of those you kind gets two balance

to different keep that I’ve have thanks doesn’t want infrastructure. with most I path look I or And don’t as to us technologies. way factor industry XD future for the the go to the before, don’t And that I been deeply enable playbook the the just of companies those for roadmaps, competition the if has innovative many believe AI for past. said classic to the no just years the you this believe a technologies different Local combinations Yes, is like the following just products the there’s work in Moore’s many, forward with to leading forward Law technology coming question. regions. back and for and many the

tremendous two Architecture customers mentioned going months I new XXXX of new – And to two I last things forward architectures, EUV over So leading talked it beyond packaging. you materials, energy with structures, efficient years. their if aligned ways new our – to be the about they the and with to together talking Day, every connect exactly XD of the with new enhancements double road computing innovation. I’ve was and been one years the one for earlier, about at that ago, look chips there’s the advanced two the

just to tremendous believe I So be going there’s innovation.

of connect past. much ever products. technologies products the than and the critical manage this thing to in becoming to the on been opportunity interfaces the relative together is more the these target be is other have All and a interfaces to are these ways moving they’ve in you to going the unique And structures

portfolio oxidized at drive this are for interfaces. technologies enormous those damage it together, or advantage advantage tremendous innovations not we’ve to comes enable we Those the and you a unique current having really completely know from leakage improvements where So or some Applied. combine we talked transistor, about in being is unique that in a can current very capabilities these really able

lifetimes the the will inflections these transform is we’re inflections. every world of trade foundation inflections at think today that biggest Applied that right those I fair that So and and AI, around seeing free will operate certainly of best the and industry our with

Krish. Thanks,

Thanks, Gary.

you. Thank

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

Your please. question

to I you XX.X% guess, spending And backed thanks. a the probably seems of some agree billion I at duplicative about intensity $X and know the lot if two. revenue. think by Gary, XX% I today, seen charts China intensity. not there’s Hi, to I I’ve out and least $X longer-term had like first, with totally your you it WFE that’s billion strip in capital

right So like it seems like if closer you strip XX% that probably out, now. to we’re

might So go, longer-term of underlying and about do that it to out is mentioned XX% number. a where can you sort then or that’s of when top real backed like issues by revenue. I you fair before, number, WFE And when longer-term, think kind of not revenue a of dollars semiconductor that know of modeling WFE. a real spending a you had you John happen intensity core WFE But lot can because you layer build think but you that think use on a about that’s

So the question a that is, number? is good XX%

in this Tim, is this Hi, I’ll on Dan, one. jump

to So a I think with. XX% is do good start number

make think roadmap So a that on. XX% Yes, is I I time, standpoint. what to that upward good argument, see think think lock-in can there we on technology a you number I over bias but given a from is

talked technologies size we about the Just we We in XXX on and wafer multiple probably couple investments timeframe, of came around it. millimeter when concurrent both XXXX XX%. saw a in more saw perspectives

an with all-time gains hit as X%, low XXX probably wafer industry of the it and all high. in you upward our technology and point that came what then. And since the about is we consolidation of came at trajectory it’s efficiency saw a the a that’s the steady millimeter on XXXX been customer size well as So base, into

the pretty good think And so is a we one. trend

the thing industry. way bit you of different would a and to, I of The maybe a point is other this little thinking about

capital and compare it window, two-year that for you two-year XXXX, that window as windows successive of combined a two line. and and that next upwardly XXXX the and when you of is low what combine two-year and of do XXXX intensity then XXXX, compare the point If you and sloping take XXXX to XXXX window see next onwards year exercise you’ll each XXXX and combined out within

higher to will And we think a higher see we gone lows no our industry has growth And from upward so cyclical and thesis sloping line. as highs trend out. plays growth that with

good feel going this really about And support thematic for now. talked Gary is so and trends many where about that has quarters all we of the industry

WFE on yes, for little a next percentage guess sort a Gary, question I know, then Yes, basis sounds is it, emphasized my the is off NAND a but lower we It the ominous that certainly side, than to second put you DRAM, thanks. point this just DRAM can Dan, context of year, DRAM much now far going I on guess got And of in seems a I DRAM, and which in NAND. right outgrow you better supply coming like year in demand. of are is we’re base the on

for supply those demand back into of Thanks. sort you can So what the that numbers packaging? means balance

in I’ll to point jumping-off best the this XXXX. XXXX, unpack is what the that get we think Tim. jump a at describe investment I one sure. on way it contours about Yes, the see and as again. to around for talk And in that and community then use

continue the XX%. market we to to up XXXX, see with overall starting So XX%

range. high at We’re up against XX%. of talked business the systems the that We market, probably that’s Applied end about

By to than logic in average. year. be is of DRAM but overall little memory calendar up see going systems XXXX, XX% greater the in for it’s a Our XX% market growing foundry, faster we DRAM market. the than it’s below the side type, house, growing business the device the

the is real overall XXXX. NAND. I story market Xx NAND think growing in is the in XXXX

very of Applied year for NAND. think year, to the growth a memory contrary thinking growth memory XXXX around so a is that’s that And is XXXX. especially I the little is And nicely. against outperforming conventional maybe backdrop what

So we feel about good XXXX.

I specific continue point significantly forecast to and up you’ll see standpoint. WFE, this and year-over-year another to for to outgrow see the it memory look year. of we industry As time. flattish strong not the sharing we DRAM at specific premature for reversal going XXXX, market. think a into going expect But in be to is next from We and And logic year be see we WFE the is set house XX% we around again total be is we’re to while Applied. side over strong foundry, to a of NAND expect be growth the what it’s

XXXX up look confidence into up a strong into NAND, standpoint, up an set set logic, the been in we’ve flattish DRAM. this given we for from a as is talking foundry, that us market overall look It share set now as is Applied for DRAM gives about great gains end year. strong good So throughout next the Applied XXXX we strong

Thanks a lot, Dan.

Thanks, Tim.

Thank you.

JP from question from comes next Sur of the Harlan Morgan. line Our

please. question Your

with systems market, system job afternoon. Good year on Great the and shipments the revenue just be next the incremental analog of tailwind into should business. of seeing muted, much your and On these weakness in driving edge markets, given segments industrial the the recovery the a commentary year edge this for leading auto quarterly lagging execution. growth on in we’re now

fabs growth and your what’s microcontroller the on what’s your over analog expectation versus number edge these new leading few the content applications? edge so, all-electronic content the given of lagging of XX-inch analog the just And positioning years, mix next market? segments And of in and in

that jump Harlan, I’ll in one. Hi on

think in one to utilization a off we in would going to markets the I market is levels, pandemic. geometries. pointed our talked a we’ve utilization of to seen for of see bit or Once even quarter This you and we out, natural it’s the result progression of those then you’ll some A markets of layer weaker see the then level, couple continuing to utilization any industrial little of auto But no trailing market about rise. as we last see of rightfully. begin ago perform showing end think end customers weakness I quarters stronger. Since signs follow capacity. certain gets a a low

industry whole would that multi-year as we we is think up the Auto, to look Industrial And market that over drivers Internet of geometry so expect of in the there a legs time. a markets, Communications host next Things, are trailing to over as Infrastructure, overall a window. would we larger no see taking no geometries of year. outgrow segment expect that Longer-term, into structurally geometries I no those trailing trailing And result

seen anytime think we’re we’ve you XXXX. think less well-positioned From an in it profile. node encouraged we significantly. well of do maybe seen markets a the than XXXX that and in moderate multiple really leading hard standpoint, about leading-edge good current because more would But In back and to and customers, feel or what pulling by probably a less foundry, the the that node up So to very that, to rotation do set those structurally balanced are technologies we a growth near leading are nodes, positioning on broaden we’re it. across stronger, logic competitively a term, weighted edge, the we that to and it environment. multiple you’ve get cyclical, from industry, benefit expect Over a market between while bit entire to that’s we more volatile just balanced edge trailing profile going makes to drivers customers this that time, industry

so going we customers And continue see we’re top bottom the from to to strong to deliver new and pull profiles. across technology to continue market the enabling to

business? outlook the of insights modules, integration. there. packaging then business, estimate year. size markets packaging $XXX revenues do you in million of type guys this growth segment emerging Applied’s advanced you the of do this this is and How what for big of some industry complex pleasantly return see the the as by or strategy multi-chip technologies, [indiscernible] actually innovative surprised for cases the Thanks even seen moves And in more I’m towards chip-let and

Yes, thanks question. for the

fabless There think see the really being companies before power very one drivers. I to customers, companies, I we drivers the and packaging. So five leading many and by part also the before, the companies important, costs is other as look strong that really, going our this the if a I of the have the performance of you definitely key and at then of ecosystem really, discussed forward, in relative position. importance ecosystem you are packaging talked packaging is mentioned about

in a integrated interconnect increase hybrid fully one die connect you partner enables partners. Xx We different industry’s first company advanced about two number and first in working deliver packaging. we’re that distance with ecosystem where can density. together another are bonding, chips the in of – And shorter talked IO to wafer-level a We with number solution for form

market. a going of to innovation lot is very strong have there we in happen positions. And So that that’s very,

particular leading defect innovative to very these also with technology we we surface and advanced can had large inflection. new wafer need on have If etch customers that to the at metrology inspection some we cleaning, working Singapore us of we Excellence look of you add have packaging one that center then that Applied’s Center you control innovation, deposition at architecture. in some particle just And CMP optimize enable

business these advanced early So I expanding ecosystem. we’re the really meaningful technologies. through are of I’m packaging, part new partnerships Certainly the today, it’s excited. in but think at many adoption a our of really of of with number one phase we And the

I’m I about specific it. So don’t ecosystem. important right want much excited now, become in but I number a think to give realize going than to it’s more the most people

Yes, thank you.

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

next Certainly. of Then from comes the Needham. from question Bolton line our Quinn

Your question please.

the nice results outlook. and on congratulations guys, Hey

to your where it the at flat look Just anything sounds in XX%. may up at if DRAM foundry, segments, in to I like this from take not XXXX, fiscal revenue away year-on-year the you’ve but roughly WFE what NAND overall revenue least achieved close was logic NAND year be and

your loss in logic? in this really share continued like are XXXX share opportunities as year. looks does outperformance you there depend Thanks. it fiscal and stem lost that look Wondering foundry, DRAM So to you’ve or forward, strength on

Yes, Quinn. hi,

might you WFE calendar that’s NAND a end think drawing we and year talk about market be talk wrong about conclusion. we I When the the comment.

at business, quarters. you’ll of overall the significantly the talk see flat, about NAND won’t you first And device of in I look our performance you the and the than that hit, those the guide, three our referenced. the of but market. year calendar quarters with happen if peculiarities at up business see we so to roughly type, revenue And the midpoint XXXX, line they within you quarters when by just of think It expectations more

fiscal the one a from performance quarter will standpoint for months, you if quite look the the so was on trailing there historical this flattish. you a year that XX large profile out showing see And year quarterly basis at

now the first overall line quarters more months roughly of from in you a quarter’s you’ll number. talking three with different next The that’s three results, see business XXXX, a when very think I we’re at And market. see

how market to in business So we’re we’re very and to over to that technology we’re comfortable, and confident better time. continue positioned with end our do drive look within going

thanks Great, for that.

Thank you.

Quatrochi Fargo. final Joe Wells Our then question from from comes

Your question please.

When taking you the those look trending of a about your installed think three your question. was kind Yes, your few thanks that one-third for at talked quarters? prepared I of base, the for curious current being on over do contracts service book remarks you long-term agreements over about of next how you now years.

XX%. time, it it point been So, than period. XX%, hi, we go of multi-year one from was over you has at playing see now, grew we Joe, XX%, out long-term in revenue this generated a back agreements, XX% If our to service then

around this business. strategy right the got we’ve think I

out of extending agreements, time. off provides service of which over long-term XX% going we’re look number to those more that see in XX-year, north You and to the revenues drive even stability

We’re to north. that number going to look drive to continue

way. strategy, that continue year at take we’ll look but So this growth a forward business to much push time, we our and a one headroom a one see against it in at execute time to oriented quarter against and more more stable number

Joe us for And question. call Dan, you out close the your to today. thanks, help like would Hey,

going year record flow, sincerely backlog. environment. cash remember for partners for challenges. did to all employees year-end extraordinary Yes, thanks, pleased support they delivered customers Mike. everything revenue, that like difficult to in thank our operating Applied its I’m would that we’re really a earnings, to And in our I and

quick Looking year, you leave into to few a with. next thoughts just

clearly than of growth regardless industry and bigger market industry are think for I playbook exposure semiconductor us ever. the the towards opportunities well mix. balanced roadmap is The lets spending our moving the our new perform

to care. Our seeing is growing of safe the and hope until seeing Conference the by look us next then in Credit Take happy early a at many shoots I you resilient cycles business and Display. and Thanksgiving. green and Suisse installed making we’re I you and forward base enjoy month Gary I’m the across more all encouraged

much. thank your you right, call conference thank All very concludes interest in our Materials. you for That Applied continued and

and in does conference. ladies Thank This your gentlemen, for program. participation conclude you, today’s the

now Good You may disconnect. day.