Applied Materials (AMAT) 16 Feb 232023 Q1 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.

thank earnings joining call. and of first everyone XXXX fiscal afternoon you Applied’s for quarter Good

Joining and Hill, Officer. CEO, are and me Gary Brice our Dickerson, Chief our President Financial

call to risks contained to uncertainties in uncertainties Form Information that actual recent you like concerning are our and I’d XX-K cause Applied’s the to begin, statements which most we that Before SEC. filing is today’s results contains could the forward-looking subject and remind with differ. risks

measures. materials, Reconciliations at today’s IR financial GAAP available Today’s measures and in call non-GAAP our appliedmaterials.com. also the found to earnings in are includes website on of page our which release press quarterly earnings are

Lithography Before announcement. we in this calendar and begin, month, Advanced Later Patterning have is Conference. Applied I a Materials SPIE participating the

the at aren’t IR to Time. am plan launch those we Jose new XXth for our We event you’ll hold us. on For February X San to Tuesday, conference, a product join Pacific hope on traveling Website who

like And Gary with that introduction, to turn Dickerson. call to over the I’d

Mike. Thank you,

Applied well in end delivering high the range. executed our fiscal first guidance towards of results quarter, our Materials

We our quarter. also consecutive backlog for the grew ninth

expect declining move XXXX. progress as we to forward, through good backlog gap. closing are we making supply-versus-demand Going Overall, our we start

when our shares that suppliers quarter this disruption more our However, second very recently, guidance. one of impact he will provide about major details our encountered a shipments. will Brice

scale Our and industry, brief XXXX; investments markets customers’ current our company to In my of and finally, faster positioned for topics: is for to are will and making a prepared Applied our grow outlook main overall; I longer-term three productively we the how the growth remarks, our accelerate roadmaps. cover thesis overview the than

AI, In facing resilient, are markets variety PCs near-term clean and perspective and smartphones begin this automotive, and including energy. high-performance are macroeconomic demand clearly mixed with market. especially me signals, inflection-driven remain weaker, of a more dynamics. industrial Let markets, our automation, customers environment Consumer-driven the computing on of our while

memory wafer customers both will inventories equipment defer of for and spending as investments, down year DRAM. in terms XXXX rebalance additions In fab NAND and be a capacity

ahead being We beginning year-on-year. see spending down later of NAND, expect now this pick leading-edge to year. calendar recover slightly foundry-logic We DRAM to up potentially

near-term causing capacity to leadership. technology firmly nodes strategic customers are demand next-generation While they for to headwinds remain trim in the additions, to investments battle committed win advanced

Our Communications, Auto, year-on-year. view Power Sensor for of and last than positive was now up spending we ICAPS, IoT, incrementally is applications, it and being see chips more quarter,

capacity serve a Leading ICAPS companies and to verticals. technology across wide growing range demand are of investing both in

government In to supply. addition, support build ICAPS resilient, there strong is world around the regionalized

driven Based factors: our is us of on to customers, perform business several variety we business to Applied The outperform mix Materials the our environments. resilience market well in which XXXX. First, in from well spending seeing hearing our are our balanced and is positioned believe in in a we market contributing exposure what by allows

technology strategies. our their on leaders who in focused with remain position long-term investing Second,

the We inflections ICAPS, advanced key and foundry-logic, positions advanced have technology DRAM, strong packaging. all in at

metal which grow XX%. more improvements. of is of finally, have agreements generated service our than is impact products up control And wiring rate critical made form percentage a backlog, service which record our significant track differentiated XX% resistance most long-term of These XXXX, deposition agreements. next-generation and our of Third, years an of including is on business enabling to X.X More regulations. renewal is U.S. than the from even subscriptions a export for of uniquely that high tenure of average in the after our in current revenue

making the are industry markets respond and them foundation our of The more XXXX long-term positive. downside, and digital and semiconductor volatility in next-generation highly outlook of cognizant build investments to to both are to in are important more accelerate we the economy industry the trillion technologies. than remains the or Around ever near-term before. remains decade. billion approximately our strategically upside Semiconductors to strategic or ready of by economically While a world, manufacturing incentivizing grow $X this capacity end regional in from to $XXX governments on track the

Technology power, slows PPACt new improved complexity chips industry area-cost is increasing traditional scaling and drive the to XD Law time-to-market. of to performance, a significantly Moore’s as playbook and transitions

seeing are foundry-logic designs. additional In addition, for This as chiplets grow. advanced the and transition capacity decelerates, Moore’s to in wafer Law while need XD drives average accelerating sizes the heterogeneous we die also

inflections technology are major patterning engineering. materials the available packaging, increase market. inflections by advanced new wiring, transistor, Applied’s enabled size also and in Beyond These materials and of

in inflections been well share these are multiple larger capture to available we have market. positioned our for now of we years, investing As a

We have pipeline integration to heterogeneous power delivery, bonding. enable and new transistors, deep backside innovations, a of solutions wiring Gate-All-Around hybrid

all the that way IMS, with or Our us data process materials unit integrated traditional in broad products platform. customers portfolio and combine single of to equipment a to enables technologies on-board process metrology solutions, advanced offer multiple analytics

growth To secured. be on we receiving confident already making government strategic investments are of very this have Applied’s of the outperformance new in support speed support, scale, dependent some and location about these R&D we the investments industry logistics The within which growth, trajectory and are infrastructure. manufacturing, of We will that and environment.

a Beyond to infrastructure investments simply the customers, research catalyst see and collaborate we partners. as expanding these way with capacity, suppliers change we

overall on reducing next-generation bringing believe the in expect to and coming speed we market. new break technologies cost will new We Valley. to Silicon high-velocity this months, center of innovation our example, in platform increase manufacturing ground while R&D the For commercialization

to on industry ways As the are major a faster. across This Materials theme to us so for focused new need better and that and, up and productively is strategic do and we work scale, we and Company, are Applied productivity the implementing efficiently. driving

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

well positioned While to outperform is facing Applied industry we are the economy year. and this that in remain our XXXX, semiconductor markets challenges confident

products, backlog at resilience our customers strong Our positions of differentiated business, and service leading with technology inflections. is underpinned by key growing large

Our fab while enabling as equipment the our wafer materials for the opportunities portfolio this highly with are by semiconductor improvements in line the solutions. secular positive with view, in and outlook investments longer-term and R&D PPACt trends making and differentiated infrastructure, roadmap across markets of we engineering Applied remains outgrow create driving organization. strategic In to speed productivity

it’s Brice, over Now to you.

Thank you, Gary.

today’s team revenue QX to like for our summarize strong by guidance I’d results I’ll environment. thanking us our and call, start deliver provide partners for a chain our helping and On in dynamic our QX. supply

broader to Before going term, the discuss context the industry the into the like and I’d for Company. near

comes our our strengthen diverse. stability. high become leadership well grown have above in share and resilient half our Semiconductor near confidence the and growth more period. to These segment added semiconductor returns, become to earnings return is businesses XX%. significantly invest, from In of larger Systems, dimension The Applied’s of has business revenue Over generate factors the market and past our few cycles, our or and more where than this industry more revenue services another ability has shareholders. capital over

model is returns. efficient business Our attractive generates very and

over fact, rate a our cash fiscal on Applied’s capital increased XX%. free have to XX% annual of grown In XXXX, we return XXXX and compound flow invested at from through

have We allocation three capital priorities.

cycles. and investing sheet weaker is strong this our market first what in be a Accordingly, growth Company though the semiconductor we returns, and are maintaining the to is is we can semiconductor market. to balance we customers believe trillion-dollar The even future year, so through fund second scale funding the market support will R&D a

to infrastructure our logistics are R&D our are making We to collaborate solve help investments problems. significant and increasing capacity, industry in highest-value our partners productively with and and their manufacturing we more closely and customers

returning Our third allocation shareholders. cash capital excess priority to is

XX returns XXX%. the XX XXX% free have been of years We flow, have committed and to return actual past to for cash

repurchased have this of outstanding beginning shares XX% of We period. the at

As share increased over we’ve and the has business past We’ve XX at CAGR years. XX% dividend. dividend the more our the increased larger a per quarterly become also diverse,

operating income dividend. our fact, business than a In services covers growing alone more from

our I focused on are that to we increasingly Finally, our want productivity. investors improving know

our hiring our our generate growth. by we expense, positions increased and portfolio last spending full-time base returns restricted from is R&D highest our XX% We are have critical we ensure largest to employee and possible to around decisions investments. slowed the making year and

to opportunities formed operational drive and and our efficient, new to have make more manufacturing see also We predictable goals. teams our

and now we basis to gross sales the of These two-thirds were XX.X%, results margin logistics costs to primarily by end our $X.XX last $X.XX. of delivered EPS Non-GAAP sequentially financials, $X.XX sequential was Non-GAAP net our pricing QX with in non-GAAP Moving guidance about quarter’s manufacturing nearly improved results. with OpEx R&D. nearly along from increase of of nearly adjustments. billion upper XX identical and record and range increased the billion, driven points to

foundry-logic. memory year-over-year to XX% offset revenue to in Segment the margin segments, more in XX.X%. billion. Semi was Turning advanced ICAPS non-GAAP reductions than grew by operating Systems $X.XX Strength and

in absorbed better the $X.XX was QX approximately AGS and billion. of XX%. U.S. quarter midpoint revenue performed grew to X% nearly our operating AGS regulations margin a of impact Segment than revenue trade from non-GAAP expectations. full year-over-year

declined X.X%. $XXX non-GAAP was In Display, to margin revenue segment and million, operating

$X.XX operating including million returned of to quarter, cash revenue. XX% which $XXX our to Turning We was million $XXX flow billion flows, in $XXX we and in shareholders dividends in million generated cash the during buybacks.

guidance share I’ll our Now, for QX.

revenue or X% nearly up minus year-over-year. to plus expect be million, or billion, $XXX $X.X We over

a negative the and or guidance assessment it this of in plus estimated revenue, $X.XX situation, by a million This $XXX of current to expect all to of was our of of EPS QX. recover cybersecurity on event non-GAAP suppliers. Based that majority expect our We minus announced recently $X.XX. the we one of related adjustment includes

Systems year-over-year. Semi billion, revenue $X.XX expect is to over We up about be X% which

down Display $X.XX be impact expect of should about negative million. AGS U.S. billion, including be recent revenue $XXX trade to X% around regulations. the is year-over-year around which revenue We

Applied’s quarter-over-quarter near-term be chain by non-GAAP higher logistics which and expect We be operating to to and expenses supply is $X.XX gross billion. non-GAAP margin lower lower approximately primarily we around XX.X% volumes costs, expect driven

of We and are XX.X% a rate tax a of XXX share weighted count modeling million. average

by investors to I’ll support. remarks saying for long-term your our close you thank today my

with for We future are investing the confidence.

that services economy. in and size the a products to global strategic semiconductor directed and to Our are industry growing being importance is

model business customers. invested our deployed highly collaboration with a close low is high with efficient, return primarily on and intensity Our in driven R&D by capital spending capital,

and our less has markets. semiconductor more intensity become demand services grown business more has has larger capital resilient recovered business Our to subscription-based. broadened more has and and Equipment as volatile

XX%, $XX.X fiscal past In returned to and investors. billion in cash non-GAAP the free cash flow free of income flow, increased XXX% we’ve fact, net over years, five by generated

the Looking manufacturing forward, global infrastructure, will grow we the faster enable plan including to the roadmap previewed. required by believe our us We the and growing deliver than R&D and to innovations Gary semiconductor the our to ability complexity industry. our of customers expand plans

model. focus increasing will on maintaining and we our spending productivity Finally, our efficient

Q&A. the begin please let’s Mike, Now

help we as as To just one call. today’s question reach Brice. many us please Thanks, on people ask can,

If come question, you and please begin. the have requeue session. to another in back to please let’s later best do our we’ll Operator, you

the And our with Instructions] of first question coming from line Evercore C.J. ISI. [Operator Muse

part on guess, whether half, kind I think or dollar-wise you how little you a about side basis, much. guess second year first of more calendar To what to thinking in are that you will so And contribute unwinds? of that, the of things. was as Thanks of that to calendar do as a here I backlog hoping of silicon ‘XX? I color backlog trends degree get on fiscal kind half versus kind

C.J. Okay. question. thanks Great. And for the Hi

during activity with step of backlog, we a quarter. movement taking the our back, a just on did So orders lot in see

improve backlog executed still level But we’ve begin We And that start we year. would also did we the there the a of as market and work in expect Gary normal that through out, was we’re as as that be memory. pointed to the As that quarter update in shipping pointed able really, we bookings our think sees customers everybody the chain a our orders We our logic demand that last still supply than And the have year. out, ship half to leading to toward of actually that we’re be in grew. last we’ll movement. and in cover we more described more them. from business this the work else some and we see Gary edge, down working lot backlog to quarter, strong units to weakness that of demand year, had the in with do each before, go

backlog year, the probably weakness depending we the So, for a a the to that been has little X in to against recover going the against. think of we to the bit to the buffer, thinking it take unit, it’s normalize through lead X backlog rest us, and quarters, market work the on times ship the of strong need and about business we’re to

of add especially Yes. largest C.J., is is I our part and that other one products, backlog the implants. with thing leadership MDP our would

gives as that us forward. we go again, strength So

bookings guidance in the definitely Yes. highlighted, helping is talk about half, buffering And us we’ll that more C.J., more highlight second we’re us give It we’ll of And very half not are just than markets for backlog giving is say strong it the we ICAPS quarter. we’ll as had in QX. And but year, the year. the the probably that that QX, this, confidence does it’s so that but I the strong.

has In accelerating fact, been in demand markets. those

Rasgon the next line Stacy question of from our coming Bernstein. And with

this it in a at you look focused that overbuild, efforts point I Is actually year, the out? about strength guess, strong versus that node take guess, areas an ICAPS through coming as be trailing bit restrictions in forced -- I go demand. China any that, going is I they’re after node? as like from And the at we there concerned much I to wanted at built little where a harder to gets mean, leading in to dig add-on all it to their concern about into the ICAPS? as Is are a

Hi Stacy. question. the Thanks for

on broad-based, highlighted growth it’s first when the actually would call, my answer accelerating that all, and year-end year. did We it’s our of significant I had First this last we be into guess, year we ICAPS.

not. back to come I’ll that’s concern a or So whether

single largest is the the and ICAPS. driving region country largest China

So, is area. focus a it

actually We’re affected it’s concerned by regulations. going not be to trade that

the not at radar that’s on point. screen So, this

of we think used think the a know and and I companies available intensity aware used companies As capacity, manufacturers that it and we factories capital reflection increasing. those just ICAPS leading many we the have you’re of in or for think the is And are strength, adding broad-based little about about they’re that equipment announced aware is that ICAPS probably certainly that there’s market.

companies government they’re do so, cases investments. new some to We think make serve market, think being it’s And some need driven by, the by as in cases, capacity being supported in add this are to to having it’s sustainable. do capital it it. using we’re equipment hopes incentives in But they think incentives. concerned that in not don’t enough somebody the plan install put and that companies not the have place We use. are will use just to don’t of to We

confident sustainable are power. fairly demand, things vehicles, also of types we these we’re electric the So, like underlying All markets in sustainable. electrification, think

in it we for think So just area our we that -- we’re and continue. seeing an will acceleration business,

add Stacy, I business of was the if is lot equipment you used had ago, the you thing a emerging. years model foundry one would too remember, as several

And depressed years. really that happening for number intensity of capital that’s course, of So a now. not

and good. our is very So capital intensity up, position is there

And Bank our next with from the question of Vivek coming line Arya of America.

be you memory the does trough or of your weakness sequentially a curious, other to look who reflect Because more kind down is that the the if U.S. explains lot very have second seen delta. half? I when outlook QX what it’s I at of XX%, their ICAPS that And there see think that could that outlook, calendar are peers your just in seems you demand, it’s I’m your memory strength different in know QX. it don’t we right, XX% just than from

you the that more you explains memory still puzzled outperformance. earlier, yet half? Thank it is as it is come of trough Or the Is So, it to weakness what saw I’m not that ICAPS, something back you. could else? they and just in see of maybe have and to that it seen

Vivek. question, the for Thanks

the seen think We significant there We’re on their booking customers. with activity, memory -- customers we confident in I Mathematically, ICAPS has our saw We’ve offset from weakness slowdown more The we’re as right. leading-edge we’re pushouts orders. in acceleration current. you’re and seeing exactly any have definitely in and our memory definitely we we’re cancellations highlighted than seen logic. current that fairly

And then, we’ve on memory indicators side. the that’s the at So, leading true. looked

declines. still pricing We’re seeing

We’re still seeing increases. inventory

customers, think confident from but with at don’t we’re Vivek. the we we’re our it’s current So, turning least yet, perspective,

next line Krish from coming our And you. Thank with Sankar the question of Cowen.

not since earnings I that year, hypothetically and assume from range ICAPS maybe it the you of how revenue or about it than speaking, you’re one XX in outperform, mid-teens? is did the you’re in if the going year. just better for to to you’re strength. billion this power WFE to XX XX seems And for But fair so the and WFE is just that WFE probably is quantify disciplined be more Brice, Thanks. low you. percent scenario on trying notice understand industry to more because this OpEx? I like anywhere some to growth be think talk your people kind of $XX about down like down to given to But

Okay. Thanks Krish.

we from we’re to didn’t on market focus because sharing what seeing, all it. in a abstracted really bit the yes, we’re So because little we’re that we’re provide getting signals a the WFE just trying

you strength acceleration in us we’ve ICAPS may make out, a As different. pointed bit little got and the that

from shipping still also orders We’re ‘XX. had we

for us, that of differentiated up the demand, units in key catching existed business we’re So especially to the before year. some

us perfect it’s estimate. it’s match, to a So, difficult not for and

to OpEx. Switching

As was of our constrained, was we OpEx were that call, we supply in ahead our last revenue growth, a about our our because growth. plan, little talked bit

do So, focused hiring we initiatives strategic only, improving spending. implemented productivity have targets. on have our to and headcount We’ve we on moved

that. of conscious we’re So

because think Of growing. act, a industry we the is Krish, it’s this balancing through year course,

R&D. investing We’re confident in the direction we continue need to in

programs primary customers. deliver to those is So goal that’s our to

we’re now, comfortable We to the we’ll with But deteriorates more the make us, if environment then for have trajectory. right spending. flexibility, changes appropriate

the Next Malik Atif line with question from Citi. of coming

in taking my for job Nice the execution. you Thank Hi. question.

outperformance peers. does do the in you’re now? business your versus on silicon you within at strongest And XX% you? about right Master for ICAPS least the it you have silicon is your near the portfolio. your this if Classes, And being sound of like running Brice, term Thank area for historically, where ICAPS driver ICAPS And talked around I’m curious could in at carbide is auto comment the think you. you or So,

Okay. Atif. Yes. Thanks,

foundry as we ICAPS is or business of Memory And bit. so that a think mix XX-XX last slower year, this we’ve edge. with year. that as little I portion the edge two-thirds lagging little changing our a about characterized characterized is logic the leading

a that’s from What we of And that that’s at characterize that growing incentives of I is the seeing high perspective. are the company market it Company a that intensity in is by part the it. at part carbide, ICAPS the this part And highlighted. we all very comment. that accelerating think year. driven of And a for is by the TAM and the driven strength So government could maybe, the thinking and make on markets and of way the level by silicon is end Gary, we is you rate that higher driven

Yes.

more Let me color. just a little bit give

to for similar So, is with ICAPS foundry market us leading share relative logic.

share last grown the significant few to accretive years. our margins. over also It’s amount in a we’ve So, ICAPS gross overall

a Four could these I IoT, the auto communication, years because to about think significant at see we going talked markets were we’ve organization sensors, this, ICAPS we formed pace. grow ago, power,

a team. So we pulled strong really together

the have broadest We exposure.

significant at within ICAPS, technologies, of you it’s segments have If any different of look strength. -- whether all those we again, the in

several something ago that saw that’s investments. years made again, and So we

just products if in XX at. look one ICAPS area There’s areas strength versus been particular we So, last ICAPS in largest that exposure area, where And introduced we we one is in we’ve five and area, very products. broad specific But that new many expect supply That can revenue again, of ICAPS years. on ‘XX Implant the constrained, our focused in we’ve have we we business. ICAPS. ‘XX. is double implant in have segment that the many our

very, together a really position pulling So positions. put we ago, again, in And what for just years today. organization good really have we’re seeing us across the that four board very strong

from question coming with the of next line our Sachs. Hari Goldman Toshiya And

in year, mentioned just that you the you thoughts overall had inventory you question. question, a surprising, ICAPS are your question. potentially to the of prepared ‘XX marketplace kind Gary, is and that NAND what that and I which Was recovering my . the my just That’s trends expect share what by weak just DRAM And Thank Can little clarification given as one that your view was in versus revenue Gary, me ‘XX. ICAPS, talked business situation. in your in of well? a clarification you today about to DRAM? quick And your remarks, implant? end double then then you informs how that on are the or

Okay.

that That’s the had limited the Let the cover And specifically on we of our doubling me is supply in of in ‘XX versus was implant output. ‘XX. ICAPS. chain -- question first part ‘XX just that challenges

question? there to happening -- you And what’s the that’s with ICAP. do cover Brice, So, want NAND in DRAM

I customers NAND, give and We will memory. and next be see we’ve internally. kind I perspective. -- memory, it even the earlier, at and looked improve and to like it declining going lower all are market next we of declining three we We signals we still pricing will weakening slightly at at can are look we moment look have that exact or or on think then DRAM flattening. don’t of it’s looks to quarter expect year inventories in utilization NAND looks do the lower mentioned that this think, our turn. the for utilization can like we’re either in Toshiya, have at growing. when I both We’ve and DRAM. inventories looked an seen the forecasting the utilization memory And And of quarter.

that will point just again. call and improve we memory to say, grow. companies that it’s next year And to don’t the memory in expect where So call that I do begin invest starts But to we this at time think difficult can point moment. will

UBS. from And Timothy our next question of coming line Arcuri from the

of higher Brice, seems than upturn. your a backlog bit began on during a the like given I to your times sort or numbers peers, got question long is how your lead It had skewing backlog.

give on you if wondering a backlog. few maybe I’m more So, can us the breadcrumbs

said you billion. backlog was quarter, think $XX.X SSG I last

from So quarter-and-a-half when I backlog the more I a think you for backlog that of SSG like just that’s X.X quarters like SSG a to And worth normal, so, up backlog. of number. if want to SSG. went kind And be of run always clear used that of

So, is conclude to right it worth right have that SSG? you relates all after maybe backlog as now excess of that to it quarter’s a

Yes.

think I for the Tim, -- thanks, question.

on see would color So in leading logic weakness I we memory say and did it, as we described.

So, strength a that seeing comes side. on ICAPS lot we’re the the this of acceleration back to

a a from perspective, the implant. Gary So where of is I growth mix in that’s of from. orders think lot coming the strength highlighted And

the is but not ICAPS XXX%, growth and total for memory of weakness certainly So meaningful in to to QX the is logic. offset obviously, us not leading in year, very enough -- it

you gives of is of the this perspective. that in So, some business. Most the semi

working -- backlog range. in off the of would probably the it billion guess I of say us highlighted that will billion back would that times or business quarter, what lead is, in are yes, Some differentiated where does And backlog. space. the it’s I it what equipment, areas to comes we’re take I the still tie XXX-millimeter, in AGS think And a would normal $XX -- we the say long in which we be last that $XX highly is

the to We last in and direction that supply year. as up demand back had expect from catching we to start we work improves, can

backlog from so So the billion? go I to $XX.X just SSG up Brice, did guess, confirm,

to you data, the it? Yes, Tim, if can see at Can see looking see I I’m sir. this.

it. Got

Okay.

Master back gate December. all We have or inflections would Yes, many lot of I maybe wiring, Class capacitor to around, the Master one that the thing just strength. technology strength We talked in formation that kind these a We PDC key of of add had about materials, do inflections. with gets in in Classes memory questions. new

up another X at wafer alone, per dollar the look XX% enables The we from When composition one reduction resistance. Xx of goes the to again, backlog, that’s X-nanometer. have thing. a wiring So you inflection in about that just

are So, in relative performance. those areas also us helping

And JP next from line the our Harlan coming of with Sur question Morgan.

of sort the road customers Given in excess out not Typically their disciplined, as actions to very technology customers pulling tech the unprecedented They’re downturns, migrations, right? even to in in tech being add, space, far supply, back rein your memory capacity migration migration. we are drastic but memory so your push wouldn’t going yes, see situation taking on maps. inventory

So, customers the of higher your is capital pullback does their fundamentals normalize big associated potential just this migration tech a pullback realigned the as memory? start intensity going to spending this as WFE all to mean tech get year because in a contributor the in on importantly, memory to to sharper recovery are maps. migration the And for memory try aggressively road

market to I’ll the something for and choices. want their Gary Thanks current transition is the Yes. probably don’t the technology here. start, will question, Harlan. add guiding I think that inventory in situation

opportunity their the product the bits leadership by improve positions et cetera. performance, to driven and improve be will and that cost think take the I of

So, what more on equipment map depending their does happen they what is they road that demand have can reuse may into is.

lower and on that. So, they’ll buys changes their make based equipment

the So, -- are technology and situation ramp of current connecting -- not situation. I inventory business aware I’m the with that companies for decision think

the logic this kind mix India. is foundry foundry also logic with of could say would going potentially memory. will between a believe incentives, was two-thirds, certainly that DRAM again, in in would That potentially one-third to are that future. said memory the different add memory, Harlan, versus by that’s Yes. It going the And remain government number you I that incentives into And strengthening the say years profile see we areas, a in especially of lot U.S., a we -- number strengthening, perspective. government of investment. going few we additional of billion share of in in logic and year strong higher we for your Japan, Europe, calendar think per into would the dollars end view of a ‘XX, that sustain memory year of What foundry I and we forward.

of from Wells our And line question coming next Joe the Fargo. Quatrochi with

of about your you’re do today. split orders customers. kind think fulfillment production working your there? that backlog backlog do what’s the from guess, where more we we or kind your down supply ability levels to how at that about I ask normalized maybe increase driving slowing that in that versus terms XX% of of from of How to to understanding out at wanted I least back

It me Thanks the with hear for backlog, the part to was question. second let a Joe. the that of Joe. down question, little But working hard start

against flow hard demand constrained. that number. behind exact received way last still several that the it’s So we’re been we’ve It’s to shipping order coming that really I has got it business business But on guess and we the about the X And unit to are backlog think year. estimate the we depending we’re of. it, X quarters -- thinking in supply estimate units

as orders the line to again. know noise you ahead we position. your year’s we’ll And improved, do kind that. I So year take units business the second -- question, There supply was can quarter. recover don’t unit, think will to back able one some begin against we’ll and next next -- ship say and to business blocked probably in recover the to of normal it. do that go we be into of Joe, part two or quickest has last that a have Then

apologize. I Yes.

The more second normalized to to down slow? that maybe understand of predicating part to to are you you orders orders on long is is get from just or aside the level, take to being a are resilient piece trying -- expecting back other supply

expecting really current I -- to would we’re I in not really I slow. think say said, guess Like environment. orders I the not we’re we’re

think year cetera. ‘XX industry, the logic, et towards be And whole we better leading next expect so, to a memory, we as across year,

at predict if this saw we as we the there some can’t orders ‘XX, footing. every strong So towards will be to we in firmer strong period. market. point, stability expect be I We cycle. it there’ll be head think But

with Bank. Our question of line Sidney from next coming the Ho Deutsche

by past to leading would maybe leading-edge hoping end your on X that I you great. maybe do just for Based outside the foundry slightly You that can guys also, And you bit. years and edge? spending months the X be you talk on see about as talk year X of how expectations this of this ramp how that logic And of maybe about does business, to double-click your Thanks. a transit ago? compare compared to that X-nanometer production, was year. can down say, little nanometers,

Okay. one, I’ll that the leading-edge. start on on

So The at largest I it’s pretty at point. running think customers this are leading-edge straightforward. lower utilization

utilization And that so, they’re they they at as their level the resizing capital now. buys are look

some of the So, ramp. that we then, next on pretty I comment I a nodes. But related X-nanometer? think we’ve about equipment they want And or their do the don’t tools They customers. some ability have timing other and of to it’s to make utilization seen think lower comment into the of have you to typically cancellations And reuse straightforward. those pushouts Gary,

our in one there, rise again, positions have for majority goes of Master about a to that points. going I significantly dollar the what customers. about from next. say to like expect up inflection. strong. And the the from per of the customers, What a those spending that in And the inflections And we’ve wafer very FinFET, that’s X-nanometer be those Classes, our covered investment from the the us, is versus would for we’re share technology Yes. I’ve we node of for covered in hearing we the X very is to Master And wiring gate-all-around talked where Classes. we’ve lot looks again, demand big that that

strong. So, X-nanometer is our position at very

improvements are Our even position X-nanometer performance. power customers and in driving in stronger gets as

there X-nanometer position hearing comment let for customers on our timing, is very the So, significant we’ll what from and timing. the And them demand we’re again, is then good.

Bolton And question line from Needham. next from of Quinn coming our the

ICAPS for you Obviously, it something XXXX. could sounds reconcile in me. is very strong business like the hoping help Just

China said it’s down when biggest to year the But from about at You is XX% your part the over ICAPS. of $X.XX billion. China $X past billion like looks revenue, it look I

that really to as ICAPS ICAPS So of strength XXXX? through coming from Thank reconcile in strength non-China expect slower or guess, just do pace in come you’re trying that is revenue the you you seeing. China nice recovery versus a you. China the I regions,

Yes. Quinn. broad-based. in Thanks, strength The is ICAPS

or most memory because leading in the and to really it close growing that the the largest is. is and zero. of see China where So, country, but That’s zero logic that ICAPS-related essentially investments investment we worldwide, of are investments demand is is China most

profile a is is relative growth, the other that would there growth in at China ‘XX, I to in regions. But ICAPS similar Yes. say remaining level. significant

assumption your think I see. So, we is pretty to close what

our question with next Susquehanna. And of coming from the Hosseini line Mehdi

July stable follow-up. just impact implant revenue with able potentially could one that million you is a ICAPS? I’m how then, that trend? ion get $XXX understand quarters for $XXX to big a quarter, rather million how the trying out. help be me could clarification feel have is pushed SSG to I SSG one would The help two to the and out And pushout within

-- I’ll the Thanks, I’ll $XXX take million. the Yes. take Mehdi.

expect of we perishable. So, is -- that do demand none

based whatever $XXX we’ll we’ll your QX. So know but exactly We QX, take yes, modeling and get in that it get in model, in weakness it I most you’re if half, don’t just we the all that would the describing. you’re if degree, offset think then, to like there a would million that in for QX is, add on our assumptions. second extent to to And then current there’s it

relative ion Mehdi, Difficulty] to Yes. [Technical implant

trying just implant within understand ion I’m big to how is Yes, ICAPS.

Sorry. Difficulty] [Technical

button. the push didn’t I Sorry,

ICAPS, So, relative double we largest business. to Mehdi. amount it can earlier, said ICAPS -- size within segment believe that ‘XX revenue And that, ‘XX. from the as we that But quantified and the to the implant implant I haven’t double that implant, of -- is we that roughly we

segment, ICAPS. that it significant. products across leader multiple in is we We’re have within broad and the But really exposure

it’s it’s materials more know, really market. and you shrink-driven, structures-driven not As

that in forward. will expect and market, leader strong going that we remain and in the We’re ‘XX

of the Brian And line our question Chin with next Stifel. from coming

is net it backlog the of guess near-term in -- the of discussion, that about of there net your in cancellations is just thinking kind Maybe of shipments, terms or guess, is sounds and a of This way really terms amount be generally? the even ICAPS, the Is the pushouts revenue happening that is resilient why as may example? disproportionate for memory, it like main I really right reason in that’s towards geared I product is of that backlog beneficial. just

in do accelerating parse way Yes. logic side. the for point, that backlog it’s your get demand from or we I that seeing exactly customers strength question. ICAPS to the that’s think you described. didn’t on blanks Brian, I fair. significant in filling our But thanks leading we’re the memory

so of say that ICAPS there’s the that our backlog. strengths a the to significant that represents fair we’re shipping, backlog And orders it’s that to I amount across that think extent --

that is fair. think I So, dynamic

back companies think driven putting are end it’s don’t capacity do going it’s big to that for in by we just just don’t those in build said, think and anything investments. unusual is markets, And that sustainable. use. about the have strength companies or growth We and that, they won’t This any unusual activity. We -- starting a ICAPS Gary while might you as space out, seen of the these is coming to larger seen talking we’ve some think the

see you’ll think the it I across So pretty much globe.

Great. imagine at firing those of the cylinders some And even too. aren’t I moment,

well. as not that’s So bad Thanks. probably

questions, please. time operator, more And you. have for we two Thank

Curtis next Barclays. question line the Our Blayne coming with from of

Just overall curious logic. the message on foundry

in kind And down about being the have think I’m up. you talk the what’s trends it leading kind is market. of understand talked to a about if just trying as could some edge. been has ICAPS slightly for of clearly, of I So year kind just

of kind you’re Just seeing. what curious

just just it of edge. You months us last has? foundry. talked of about in walk leading-edge it getting a clarify how bit much you weaker on through couple And kind Can leading

customers slightly an think everybody the is reductions foundry this when exact at period weaker, about at capital number either. time. in number. of when look they not When see had give big we We But, we it plans. I logic, foundry when low knows, won’t think may logic, we the our Blayne, we that look exact look in have leading we at Yes. -- utilization,

So to place. their for this working start next but in logic you bit customers, the to and see invest They that that put our capacity a we at and those little more through coming point to expect they’re through. going make in reuse are inventories we leading But investments. page, in have is equipment And may that customers’ the the nodes when time. customers turn going available

see And so, we’ll do Gary, add anything strength in Okay. past this logic to when we we’ll foundry expect that again. one? -- get year, to you want to

good. for the question, We’re Thanks Blayne.

question Mizuho And Vijay from coming Group. our the Rakesh with of line next

on Gary Yes. Brice. Hi,

that all is a follow-up. exposure your small the fairly given back mentioned on Does that is cancellations? the current. I backlog Going And then imply again, backlog that within think you memory the memory or

recession, made depends current know gone don’t or we our think go. have Whether -- customer it the will changes if of on also on there not, all, don’t. -- people I some backlog things it’s how current. and We’ve through Vijay. first if important to exposure situations. The macroeconomic be Hi are definitely there’s more factors people some a based

really will goes. demand is current. changes. second market, we’re think just the where in depends think we the there’s missing can half. it on signals underlying We So we’re the say for don’t depend don’t It and impending which the But we economy goes way all on

it China spend trough to a down. the to third it. like you sequentially, quarter on that China Is down is side, that there was the XX% the of fairly ICAPS then assume and on China? the Got had it’s looks it fair close going some still given commentary And out probably side, it of

call but display a won’t it’s I think over grow. exact thought because trough, it fair We time expect will we

businesses services our certainly, grow. expect and point, expecting mostly And is We business growth ICAPS will there. at an we’re this strong China

the is yes. So, have those effects trough, the I won’t absorbed you we if trade think I effects, ask, rules, answer call but the are a of

your you closing Okay. Thanks Vijay now, give your would to us And for thoughts like Brice, today? question.

Thanks, Mike. Absolutely.

backlog our services are that strength emphasized growth products, market. us enabling resilient we and this of our helping our in ICAPS in today, be So to

to industry customers. capacity long-term growth and you call. semiconductor attending our technology committed all Stanley to of conference Thank this look forward building call. I We seeing you forward today’s offices the and We’re attending weeks. our confident support quarter, the the this of a to thank at the in and Mike, many look to and please you, in Morgan for close few

is which February closing Product to I’d please join our message, for webcast. like my do Patterning us And own Brice. XXth Thanks, add on Great. Launch

website, You we’ll of replay X can Pacific post Events today’s page a IR where Time call on of link find registration a the our o’clock also today. by

continued afternoon for this for and your So, Applied joining Materials. interest in thank you us

and conference Thank for participation. your Ladies conclude for gentlemen, that you does our today.

now may You disconnect.