Applied Materials (AMAT) 15 Feb 242024 Q1 Earnings call transcript

Welcome to the Applied Materials Earnings Conference Call. [Operator Instructions] I would like turn the conference over to Michael Sullivan, Corporate Vice President. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining Applied's First Quarter of Fiscal 2024 Earnings Call.

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

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

will Monday Before a we Patterning a have the February Advanced panel host begin, Applied SPIE calendar announcement. at evening, Conference XX, On in I Lithography and San Jose.

a leading I'd from be Dickerson. so We'll we'll over several like join you'll be introduction, will us San we Siemens stations to call products Gary and new Intel, introducing EDA. at Joining And hope have with webcast, demo with in experts that be us to NVIDIA, the technologies, IMEC Jose. the event. and turn also won't There

fiscal made and Thank first earnings Materials guidance you, our in Mike. that our quarter Applied start exceeded a guided XXXX, high of revenue range. with the end to strong

is innovation delivering strategy inflection-focused Our results.

new have innovations over our years. We consecutive in major a high-volume for years to great outperformed position, X the transition customers next we believe production as and markets several are chip

are The that to critical customer capabilities, Energy. to see Electric breadth of AI, and key combined us Renewable innovations our scaling deep relationships, inflections accelerate allows technology with our technology early Vehicles and IoT,

ICAPS high-performance interconnect and including expanded memory, our market. including high and reshaped solutions, the delivery, enable applications transistors, have of DRAM, in specialty schemes, We that next-generation backside power portfolio new bandwidth

collaboration and I'll highly grow begin, our some about share customers partners. environment. accelerate to let today, long-term also Applied's market strategy me and through accretive examples and to In available of on how I'll the share. tighter remarks velocity these commercialization provide latest my innovation to with our our But talk perspective our inflections are market prepared

are types all dynamics fab a of overall levels customers, across hearing normalizing. inventory reacceleration cloud with memory we're discussions improving. our capital device There investment and that market increasing In companies, is are by is utilization

Applied's demand of stronger logic XXXX, weakness terms slightly being ICAPS some year-over-year, delayed. forecasting to we markets leading-edge in foundry In some see than important be investments. by in projects even We're with offset lower strong end being business are though XXXX, regional

memory remain our with We memory dies XX% data connected of to of is be are by which production means expect spending. NAND DRAM wafer stacked our driven business, advanced more High-bandwidth ramping key the we needed of year-on-year, produce enabler less in to used fab logic die total that to for high-performance up see continued NAND customers twice but packaging where are in revenues and And dyes The the strength equipment DRAM high-bandwidth than memory. high-bandwidth larger standard AI Xx volume to chips. is same than than a capacity DRAM, more center. than the

market. packaging our growth share coming by Applied great critically the working, focusing XXXX, in compound how on top made output the is High of die is technologies, of our process is innovation our about needed or enabling at packaging HBM stacking inflection-focused increased market. significantly to annual increase DRAM rate this, has a available a total expected grow only of but over X% example for further approach Bandwidth XX% up and the for On years. steps of the steps DRAM Memory DRAM next-generation

significantly Peripheral growth, increased positioned our Technologies, have Circuitry decade it We're XXXX, IO also was our share thanks a implemented In for that Logic equipment more DRAM enable earlier. points were leadership that speeds. our to than was combined. closest XX DRAM future higher for our process we larger DRAM than been revenues best estimate And X to Applications than in peers

in Our of in we multiple have patterning and silicon and scaling, leadership co-optimized, which critical advanced positions capacitor hardmask high-bandwidth solutions, bump memory. strong strong enable packaging, that for where generations will or position micro DRAM unique are through via

we billion. fiscal to Packaging be year, types, growing XXXX, revenues from than expect our expect all HBM $X.X larger our across to almost billion. approximately And Xx grow to last revenue we packaging In portfolio Product device Advanced $X.X to

market. this we Looking adopted, new further that again, we ahead, our introduced and is for heterogeneous as double more expand see opportunities business widely to served products integration

a high-volume This shift from process equipment used every XXX,XXX in available of wafer billion for to And AI market Applied's gain FinFET key in and is XX% for this These in foundry to spending enabling than can applications. capture center year energy to we're month a XX% data per leading-edge on XD production of more that new Another over the especially beginning logic. by efficiency. is inflection provide will gate-all-around complex high-performance $X The share module. chip's starts track the transition improvement gate-all-around transistors, structures transistor for capacity. grows this

integrated logic Major in foundry inspection, for manufacturing the metrology advances more and to are also the and flow. DRAM into be better driving and need leading-edge

that We and imaging, XD field up XD highly have industry-leading developed at cold to XXx speeds. emission enables eBeam technology, higher sensitive

and our expect total eBeam systems sales. to a factor represent grow of XX% revenue of We X by system XXXX CFE in our

new new strengths power depends IoT, communications, and playing weighted materials Applied. approaches, technology recent is of technologies. edge. device XX% to shrinking development automotive, about billion sensor of road $XX innovation In features the accelerate invested limited incredible customer map for years, research and the new in customers heavily ICAPS or the to on investments see core have today and industry are revenues not the ICAPS annually, integration their less we and about in to towards leading The structures,

these where Since the integrated we needs unit than in innovations market we new target dedicated saw XX early. And highest solutions. value that process ICAPS And ICAPS on robust is area pipeline and we more markets. team ago, these years we've have another a X a of to released development customers. then, the of device products focus inflections formed

market innovation, recognize to While such of AI major they are Semiconductor in Vehicles are Electric as still and stages important and Energy IoT, Renewable it's adoption. inflections, growth the early already driving end and

example, without foundry incredibly cannot GPUs high-performance also logic leading-edge The only and The rich chips potential like is today. AI opportunities, next-generation unlocked cost. power map full represent be centers wafer starts road data AI X% with for technologies for For and Semiconductors with complex. possibilities of technology performance, but of better

complexity company No Materials. this than to placed better Applied is address

deepest these to faster, advances our collaboration we're To earlier also develop deeper and and market unique a differentiated we ability the highly of co-optimize combine, by broadest partners. the With to industry's we innovating and innovate, integrate our technologies customers solutions and products, portfolio customers. bring capabilities and our way have with to driving for

innovation our network, into that will in expanding are EPIC we're the building connect center, Silicon Valley. We global

we During electronics. which the innovation, is Leti, is accelerating quarter, and partnership we with on announced an of a collaboration our focused next-generation which with ICAPS expansion MIT, new launched long-term power around centered

has also year-on-year complexity yield, their value industry customers delivered our transfer with enable rises, optimize the XX As customers growth manufacturing of growth. period Revenue for and at this into billion in versus AGS this that into the same for and the and we $X our sustain advanced and believe the year, up year, more to has then future. quarters rate. to growth first is opportunity we're faster last annual volume a output services can delivering cost business we now was R&D, new AGS double-digit X%, factories. technology rate consecutive accelerate quarter run the

is of AGS from revenue significant generated A subscriptions. portion

XX%. service under up XX,XXX rate agreements, over these tools almost very We a have year-on-year, X% agreements have high renewal and

the in outperformed of Brice, fifth the Before I first delivered quarter the our in XXXX. call I will pass results summarize. consecutive Applied quickly XXXX over to strong we and markets for year Materials

we've will support ramp inflections, outperformance, established next-generation high-volume at chip positions The into as key continued customers production. technologies industry

to drive strengthening are success R&D in customers we We their velocity investment and that see increasing for and innovation services demand improvements business industry and rate our manage collaboration complexity mutual the advanced scales. customers And helping commercialization in with efficiencies. are as R&D growing partners

hand Now Brice. I'll to over

teams discuss delivering is performance. value strategy growth years our we thank we thesis I'd summarize ahead. and to quarter why the strong and Then And in producing. it our and results I'll the like in today's improvements further our believe revenue Thank operating you, markets I'll creation making this margins our Gary. On will call, our and for outperform

our I'll provide Finally, QX summarize our QX. results guidance for and

industry. for process I'll by and value the begin discussing and how assets strategy shareholders. and create broadest Applied the in expertise equipment portfolio our has deepest

to allocating by in our most invested our Semiconductor highly annual only R&D co-optimizing are in collaborating manufacturing ways. the new challenges chamber customers, to integrating invent solve challenges. the technologies new billion $X these solutions to with Increasingly, We critical is and way in

greater probability value strategy The early processes closely results, and leads financial efficiency and materials In returns. stronger financial customers, creation higher being addition, identifying our success, faster our a of new collaborating with results. in and demonstrated to of are benefits

We record billion. with sales in generated 'XX, calendar equipment over year sales, extended in DRAM equipment And billion record reported calendar AGS. including legacy strong in our $XX.X position of $X.X we

over share. and Applied overall XX company has contributed share outcomes XX DRAM years. In the over past gains best This gained of share the fact, years, has of of XX of the WFE delivering points year fifth to straight overall a multiple the in one points of share past

at a nearly and over compound to XX%. outstanding company rate by XX XX% free increased cash at XX%, same XX% Also, grown dividends on invested from shares flow the EPS this we over capital of over and Over fiscal period, per net years, non-GAAP XX%. nearly at at reduced return share XX%, X% we've revenue

Next, I'll summarize thesis. our growth

look Semiconductors significantly than As faster planning to we we the out grow expect GDP. horizon, over

increasing the time, expect technical faster as to we driven by or than Semiconductors equipment Second, fast over complexity. grow market

business. a outgrow expect to our fourth, as our Equipment than faster thesis we Equipment will Applied's third the pillar take that of we to expect support market. the the business Applied's Third, our market. to And I'll Services fast Equipment business grow outgrow or business moment

in Energy. to and The reason is technologies AI, enable Renewable drive needed that key the IoT growth Semiconductor advances our

inflections high-bandwidth will company is AI, the logic DRAM for data extremely years, to advanced In memory. center compute Semiconductor and memory, well the ahead process several process Looking are out equipment over that #X we play the positioned. both in next standard and

share have to more sight XX% delivery line packaging. backside advanced power and gate-all-around a also or transistors, of We in

IoT cloud. #X which silicon, with AI strong in used analog convert the We it and to position equally and and is transmit ICAP in to information Edge sense are the

our through deliver also In out play the inflections strong over including confident collaboration global like rapidly technology the and Applied ] in outpace described. MIT, partners and markets for energy innovating we Gary that several summary, our to these shareholder strategy position major continue next as assets years. unique and to returns are We feel transformation, new agreements which with ICAPS Lei [

our basis, $X.XX. billion, I'll EPS year-over-year results. basis grew slightly Non-GAAP gross XX.X%, $X.X X% nearly non-GAAP OpEx to non-GAAP to Now and QX On grew sales summarize to billion. to a margin grew declined XXX net $X.XX points X.X%

Turning record segment Semiconductor our sales. strong revenue to DRAM was Segment $X.XX margin non-GAAP XX.X%. results. included billion operating system and edge and Systems at was

R&D we growth. primarily emerging expand are chain to expenses and our efficiently supply investing and operating also technology our focused logistics While to are on programs manufacturing future inflections, for diversify serve

record quarter its was AGS operating delivered revenue billion increased XX.X%. and of nearly year-over-year Services revenue Global Applied to year-over-year growth. segment approximately consecutive XXth non-GAAP $X.X X% and margin

XX,XXX XXX,XXX parts revenue to AGS subscription as tools, services was grew delivered nearly Around surpassed and quarter X/X during recurring agreements. base installed and the of Our chambers.

growing operating enough dividend. Finally, continued than AGS more profit Applied's to produce fund to

Moving QX profit revenue and to XX.X%. was operating segment $XXX display. was million, non-GAAP

to continue OLED upcoming look to opportunity our in growth IT forward inflection. the We

flows Turning million including $XXX million cash buybacks. in million in $X.X $XXX billion and cash to billion generated to cash and in operating dividends $X.X in $XXX free QX. flow. shareholders, We We distributed flow in

discussed segments, shares, $XXX.XX. which the First, way average allocate from increased the recent to the this QX, and note visibility unallocated majority QX we stock-based expenses repurchased following: XX-K results our compensation, we our non-GAAP gives X useful estimated EPS We of moving report, our we costs. million include at of in the managers by Please Equipment over nearly lives greater refined that the the price corporate we plant increased of effective an $X.XX. operating Also as

and EPS, models, your you or a operating quarterly corporate While segment table the like profits quarter operating profit operating To on segment XXXX showing a basis. been includes costs in reduced proportionately. in and change no has help the would XXXX profit impact on earnings our of have with each company presentation what unallocated fiscal fiscal it

Finally, basis the in and reduction compensation, increased in by sales, cost depreciation gross share-based of approximately points. margin XX

QX. our for Now guidance I'll share

expect we $X.X about within $X.X $XXX $XXX million, of revenue be or to or outlook, revenue billion, around we expect Semi and minus $X.XX, revenue Display $X.X EPS of expect of AGS billion, non-GAAP billion minus Systems and plus We around revenue plus million. $X.XX, of this

be operating approximately and expect around We margin non-GAAP be non-GAAP XX.X% billion. to gross expenses $X.XXX to

are Thank you. We a rate of Mike, tax let's And the Q&A. modeling begin XX.X%. now,

Thanks, Brice.

Our as many ask question please analysts of call. possible. With in goal as on mind, our is to help just today's that one

to our in session. you please If have re-queue later the please and come question, best you to Operator, we'll another begin. do back lets

Our [Operator question line Rasgin Research. first Bernstein Instructions] from of from comes the Stacy

wanted in I to China. about ask DRAM

China due the the as how that forward, I to we went So quarter DRAM that to was off year. the supposed of of quite had into us we stronger sanctions rest piece that, was thoughts I China much you go to roll was talked and half? quarter, bit thought trajectory, non-China going be. very was the your on can that was into it going expectations for pulled we about the than versus to of had strong. through last April but be are a What It second forward it tell China think strong, you been guess, as the and

question. Stacy, thanks your for

our the high of approximately elevated. was we higher So should closed, it And And the current it same terms just the -- of we'll another as just QX. QX, remain in DRAM. expect see in China did that clear, quarter be quarter, in we we in quarter we quantity in to saw -- the outlook in shipments

That's of expect for we normalize. QX, I all increase the it as we'll we had a DRAM said to estimate $XXX question, for part was the look the that And of side. million of on approximately the the quarters. through probably the good think those year, rest then second

levels our to it's Our the with that's right more average. now something normalize from China mix should typical at

Which the that Is is what's what? -- typical?

a I approximately perspective, would a say Well, many averaged from year -- long from we term XX%.

right So will to at that XX% if around we're level. year the across decline now somewhere

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

I WFE in us see the on was 'XX. give how hoping if could environment view your you you

your But more edge, to of that Because think within the grew Applied this at But and how a in trailing quite towards you think, growth. are in of see competitors the you the CapEx on the I WFE kind they position I have less ICAPS, how strongly industrial low the edge you suggested in limited only but decline of many sharply. trailing said new mid-single-digit that, ICAP some edge DRAM it your only many leading given on environment? of Gary, or that and move analog just and the side. cutting companies auto look when of U.S., I does

and on cutting it's was I So curious you piece only different So China think that's the decline? going that. that kind parts broadly why just comment why to of non-China of then and WFE versus maybe

I change, terms 'XX, those how in end evolving. of shaping in markets real our Vivek. No Thanks, are think, for Okay. outlook

in DRAM China, there to market. will little think be levels Leading strong continue larger We start ramp think we new around do the and digestion ICAPS as the Logic both. a And improve some will low will think half year. in all NAND from do will gate we be its investments We be bit. a to So, of towards back think

in Just ICAPS clear, business. we enormous X growth and to ICAPS had for be crystal China-related years the

It underlying over won't that with But some rates be along with to enormous this the for company. digestion And we a We that growth capacity. expect little see market time the bit smaller. think grow so we that year. may there's

hasn't those outlook. end our markets those -- in changed the -- that's shape of So

suggesting? low consistent do you mid-single-digit So WFE, have is a are that with the to that view? others Or different

we Well, ICAPS. strong on what Packaging. growth we all perspective. way in see Applied. year commented it for in question, we we Applied's to strong you DRAM, can had strong from do said we your were was asked is strong we the had And a tell you We 'XX, When

precise we 'XX. not for toward And give We're 'XX, going number a puts are the look to takes. so those as and

question the of And next Fitzgerald. from from our C.J. Cantor Muse comes line

showed I business Silicon slowing. that thinking also high Curious strong single most you guess people in leading-edge about, think thinking about are ICAPS vision from where benefiting where DRAM. the WFE the 'XX, share talked I for in how XXXX? and you're foundry, logic across given clearly, outperformance You've digits. grew a your down But actually you're gains

a it week And of Or a do kind walk through year So a on year you is of if preview another give with question, a what digestion, focus outperformance? you care to hear, that? would as just of it's SPY you Sculptor? think kind bonus a little just of could we'll including a a away, of over

Okay.

Gary So second I to know first tackle part, I'll the the then of part and the tackle wants question.

call the 'XX, So on outperform. you the on fast-growing that some said, inflections grow. and the the not and our couple of growing, China expect we there's market are growing to because a of exposure size ICAPS It's the in We're CJ, piece, we quickly do outperforming markets to of we think in markets making like market. expect, the of a do won't

we're so And stronger which I making we call don't know the not know. if on is trend. a And

the see how year from So out the on we'll show. that plays And perspective. Gary,

On -- the me just let on outperformance. start

for I is inflections. think about how important major the think we're most thing positioned to

think than power have Applied, distribution, foundry accretive share. for very for is around, overall Which leading are we you where more XX% logic share. edge, to market opportunities backside if billion-dollar about our those So gate incremental all opportunity an

as new have ago, years said that introduced. we I well major we're really been X XX So products positioned ICAPS, there. formed group earlier,

ICAPS a have products. future We pipeline strong of

like have edge have they're and where opportunities again, we segments lot of a PDC, in and so we -- momentum. to And grow

ICAPS, like than share We've I our more So years. XX position points last the of XX in gained over DRAM.

extremely And In $X.X in inflections opportunity for for us and next revenue of in to broadest mentioned Packaging, DRAM. as billion well major an we years. remarks, the prepared portfolio. I over and in positioned the And this strongest 'XX around is the the few have double

provides I about faster those and about Sculpta, one to outperformance. all people, us up So the a for be And on really a alternative we'll of of patterning. your just EUV reminding pattern talking areas, that's shaping then technology is question set that think, simpler, there double continued more cost-effective things breakthrough SPIE,

leading large logic advanced to and high steps customers to around hear attend, SPIE, next this close about with including ramp company of Sculpta we're will in customers all the years. and annual business in for million those edge growth you grow that $XXX in to the CVD Sculpta new of that to patterning EUV to to continue foundry be few $X.X So working very we're drivers new expanding NA with us revenue, we for in for engaged on expect will billion you'll applications. outperform. And for patterning, Also also XXXX, at and and enable the technology and

patterning, for increased share around just XX%. served now XX% $X.X from around billion, ago, billion in from market we've to our our reference, And $X and years XX to

I really, excited Brice very said, company am was and technologies really I growth with delivering these customer for the meaningful . are when strong So pull great some excited, absolutely

next Thank you. for One question. moment our

Chris question Wolfe the comes Research. next Caso of line from Our from

rates you're as looking kind customers is into at what the importantly, more looking of you 'XX. and question calendar are telling the order guess I your

that going coming start I balancing 'XX, your look As into between some days? green off we're you technology to of shoots these as thought some early to we long of here 'XX. customers the some at and transitions. those through started with the times capacity others know, know see burning have industry in into What's lead

we at improvements Chris, seeing the seeing thanks improvements currently, in question. When for utilization. inventories, we're the look in market we're and

it's is the starting -- up. market That's to on side. that So entire much pick utilization pretty the across across

investment XXXX. expecting to end is Semiconductor that echo would leading the comments the And continue is generally customers we're an We Memory the for growing. speaking, for to expected what to from from it's on devices we've markets then cycle optimism, heard market be We're improve. And edge. hearing others

about So for 'XX, optimistic are we direction the 'XX.

our the from And TD question from comes Cowen. of next line Sankar Krish

you. for Garry, a I had question

portfolio. You have broad-based product a

your it's years. let's a power in delivery, with You X in And outperformed best-of-breed or ALD WFE or for is edge shop, say, your new one-stop HBM, products? gate-all-around these of solutions? some are of applications, whether words, backside other strength going I'm at last more for even or helping customers kind gate-all-around, curious looking Epi

would Again, inflections, miles about advantage thing examples when your one mind-boggling, create which portfolio. that we many Chris, how you all is to used have tremendous us the you -- how smartphone we that. billion these I and like that broad your of do think XX processor one times and of for about of it's for Yes. a say of is with something transistors do chip XX wiring, do think that, kind when I've

There when in enormous high resistance of wires miles are and speeds, to you're very steps type of vacuum, an combine steps chip. we platform data that or long, technologies, these enable very very the low ability is and co-optimize advantage, combines XX move technologies XX technologies power new at super like any low building DRAM to enormous or new have to under the these miles these of those developing X thin And technologies, gate-all-around, one power. that over wiring, that X,XXX packaging backside that

it's unique. integrated And those are our that's So about completely solutions. X/X of portfolio

us learn eBeam structures, to cold us then width in technologies. about look electron to clear co-optimize and can those when at nanosheets, and of talked the that also faster enables gate-all-around, technology. all I unique you're again, building want of We leadership optics. those we emission to have we technology that those field And you have our enables see

customers, to earlier, we're generations as X technologies. relative we can with deeper, So we're we're out, innovation driving see those our

in game why relationship for how ] innovate. about be changer deep and working that those So things, with innovation also customers super, we the innovation EPIC packaging [ on have all We to Singapore where full the a That's and flow of Lei lab we innovate, then advanced are architectures. connectivity. also a I new computing in our talked super think way going lab, is we is edge ICAPs, and

So We advantage. what's of that And advantage. that tremendous then to gives ability needed us can gives think I us tremendous earlier. a all Chris, see the a co-optimize

And from our question Malik of comes line Citi. the next Atif from

I from have China question talked Can the talk the mix a XX%. for about you gross normalizing the Brice. XX.X% impact Brice, to margin the mix XX% about on from the for rest you of year? of you're guiding through the

Appreciate Thanks, question. Atif. the

that underlying our in margin reported is it XX.X% the approximately yes, think point. So modeled gross And QX be would at was margin the gross higher is We our XX.X%. China view this we've what without mix.

So makes margin down to amount. gross that same go will course improve from if that continue we come as through XX.X% the to the more normal time, of we we sense. to year, underneath XX.X%, where At slowly, that, the expect a the are

be normalize you you'd at QX immediately, XX.X%. if So,

year. that And we're expect changing course improve our to We not the through then the of goals.

goal for XX% still continue work map. cost pricing XX.X% we Our as targeting on improvements and to work XXXX. road That's where on to our we're is

customers would progress much pretty pricing on that across Yes. add made have Atif, improvements. we I just all

said, I And hit before that those improvements encountered talked making about we committed goals. supply Brice think as in we've chain. to headwinds there. We're cost we're the

question line the comes from next of Pajjuri our James. from And Srini Raymond

HBM your on comment. Gary, a have question I

for said industry you of output. X% accounted HBM think about I

is, years, output we that clarify think the you're look question If my if I you as XX% business. bids. out if But wafer for can about forecasting next growth this or few that's to

of now? how evolving? mean the going So, to to I it's little market guess that do expect spending is Or XX%, as if you we grows WFE think how going grow to you XX%? it's us a equipment right faster grow do see HBM for tricky than understand And DRAM should that? I much to to also the

I've lot couple of seen modeling, the share those a data Hi I'll points. of a just Srini, since

think it's starts. starts about wafer we on question, So X%, wafer it's when first the the

I it this markets difficult purchases the business that been as the probably think estimate of at has you to point is DRAM have. most equipment because the itself underloaded understand

are many capacity what get the of HBM, doing customers some to of think to shifting I their So this is output.

in are non-HBM. highlighted dye prepared remarks the the than his larger the Gary sizes for that

utilization, business, help it few up for So that certainly we do -- it's And of if fairly be which WFE the will going think eventually past the DRAM, DRAM level will forward. is expectation. it you we years, equipment will look think drive strong continue strong, to increase do orders been the at our and

piece, what then process. DRAM And is having side. you us, last related see the HBM Gary expand is customers on apps the general their to of course, are what faster that's that highlighted lot of a than for the and Equipment growing

the XXX and understanding of is HBM about that. steps my DRAM do So in additional the of a DRAM to process about XX steps, level XX possibly

HBM and regular utilization then we'll the sure, the capabilities as time increase you'll customers expect to techniques for alongside growing capacity. packaging see see on. So And goes

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

question. I had X-part a

your NAND is on the the on is first part one the of The business. part conventional second business. DRAM And

understand. bullishness to are Are everyone. guess this extent see hoping a there's been what pickup you in are Or of disciplined perspective? terms understand I'm hope the So there? node you, telling things similar year. question in you Gary, are the to for on early seeing their plans market customers your It's on they're side. then layer your as transitions a DRAM are are supply starting that pickup? from I doing, NAND conventional to signs DRAM visibility very or of side we guess soft will you Or there? a a they the a least HBM, what well terms business, I better muted? resume in And things the at still conventional soft of And pretty have count increases

of it's make and Brice. Toshiya, a comments Yes. I'll add to maybe couple that. Gary will just

improvements on is and we this do also in improving, with the but see start and see So, see also DRAM side, and in improvements We DRAM inventory positions. NAND, prices, DRAM. and utilization true for I'll we

optimism do consistent we the side. with DRAM rising that's the So think on

been ways enough The thinking capacity. low start before they there's go have utilizations that adding a to to have about

upgrades what market view to pick signals as up. HBM suggested starting similar same the the the our nodal would as do it's perspective, improvements talked we in So seeing technology pick a our inventory, the improvements about. WFE up. for be spending. and We're on that, is will mostly we perspective Utilization the advances that the be have And spending And be NAND. would is in seeing And from that it we pricing. will drives

And packaging, continue patterning earlier to to relative as in that advanced DRAM. position periphery share scaling, WFE And share, we've years. leadership going think higher achieving we're there forward, overall gains. us. for enabled points in as to including look memory, high business to strong healthy at products, talked we speed DRAM talked XX than last XX DRAM IO, I our more technologies I've Applied positioned well remain you by or for is DRAM, said our logic capacitor moving over bandwidth if in said the of I also, Toshiya, about earlier, then the going Brice we're about really very And very gained outperformance Yes.

total see revenue Applied, the the NAND but XXXX. far still 'XX amount percentage a versus in up 'XX, fair is we for below

little bit a that's So more color.

the our question And from line of comes from JPMorgan. Sur Harlan next

appropriated you but 'XX movements launch your will in delays and point, grant timing some opening what's be maybe it Bill, advanced after off I the chip alluded potentially mean sack logic would all funding. foundry we Obviously, fab grant months a funding their to absence industry that call at remarks? about programs, due on and this talked One pushout guys in the still on least I program the think at ago that near-term disbursements. of Congress funding. in due that last on are February foundry programs President the no in signed grant driving to this XX I persistent earnings and some the about was leading-edge think your logic but delays Is that of of some CHIPS right, like XXXX, peers thought here on to talked

I'll news, do make a comment those. have we're up-to-date there. changes, Harlan, in those think Okay, been that the on I schedule

discussions is outlook that talking any you're of schedule about. changes our consistent So those with and

that On expecting the our government about soon. to reports on R&D news beginning preparing seen CHIPS the to application We're in the and side ourselves accelerate Act, the open we've process. of that recently process

So of the but those your to I is answer ultimate don't it the is, we projects. destination yes, question think expect it affecting change will schedules,

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

logic much for I And help XXXX, can calendar then in was and quantify recovery your wondering ICAPS?. the think grew foundry the us do ICAPS think about you edge the you offset how meeting 'XX. could we in as business if in decline business

Okay, Joe, thanks.

in So and publicly that I XX% grew it what 'XX. faster we've on grew approximately highlighted 'XX, ICAPS that is think than in

investment an it's specific. us to be Applied. to market market change It's we wouldn't for But from that us. for the and that Gary It's so that been more there's very your And strongest important innovations highlighted point, perspective. the market. largest now across

to accelerate. stronger leading but about and -- the giving expect quarters. to leave on -- those quarters we you and which And highlighted And to the digestion right and guidance the of the we across not few is edge focus linearity so see that ICAPS, serving that the you'll But the next that second us market kind to we But it think go the quarters. in We're end is continue across did markets. highlight forward. of since part was what shape X some force then expect We'll the we growth. how

Yes, Joe, me add. let just

at I how our think hasn't see to the market. relative we all, perspective changed

still XXXX. And And powerful of compute a focus $X drivers AI, lot every digital DRAM industry. foundry in there's by . the look and some -- of at there's content. you logic trillion certainly, at Semiconductors more content there. AI Xx memory transformation if we Xx has see So server more

very a perspective you've we the continuing growing outgrowing So positive Equipment longer earlier, X there's on years. relative I to and Semiconductor think I said others, have market as And the as as I outgrow, positive Applied Brice and term, from as last think faster to heard a faster, we perspective pretty think Equipment have growth, 'XX. for

opportunities that, major we to has, secular this don't as great So Applied see we as talked think to inflections. focus the about, do the industry growth on quarter-to-quarter much frankly, as and half this or I've half, we that in relative I

it. way think about we that's anyway, the So

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

question. a a and clarification had I

baseline, China the say then is your So something you the And when share? baseline what with on my clarification, that billion? $XX XXXX So you WFE agree Brice, billion to WFE. would is gain question like $XX is clarify you if you can

customers spend. that not what numbers, I a se, we per of China if I use revenue public WFE and to implies $XX But they that XXXX, they in is So companies, tools maybe bit know half about little other less. of like seems the know the amount. billion are have some that support only from but stockpiling roughly it SMIC your

from And ground So from companies or half to of lunch. maybe displace the the with trying U.S. crux the happening the China what's question being the sort just I duplicative free and real off spending is a of guess would question imported of idea kind Gary, you disagree not of is, is the is elsewhere. that stuff It's coming guess, getting Europe. what's with really the China I that

that plan going handicap when do how So you forward? your business you

Okay, Tim.

strength, market. a not our that. of us, was about on We cetera. view strength. strength, So, XXXX about in discussion in to what careful ICAPS et about WFE, DRAM XXXX engage year. Applied's the shared just Packaging talked of talked performance we've We And We for that our been strong the view

size parties And so the of say we'll market. the about just and to have what the see third wait

a we us, saw market. strong For

agree. number China don't WFE customers. We On new are stockpiling. we the There see of a

that not. think leading if terms of public described, projects it's know we see us market the planning horizon. be across start a next years, wafer added for market start capacity strong will under X we are that don't there versus number planned exactly I the the capacity do So wafer But, companies in partition where a and you of over are investment, that large

it mix. a And is so I think

the You've of behind put When consumption. place China local think compare got China the to still at there. macro, we amount and consumption, real we amount in capacity of demand local they're we look the

utilizations improving and we They're generally So be we investments also lower actually, expect are world speaking, yields look And to okay. the than time. rest over but rational. improving, the think of they're the

you're for it's of then China the asking increase None or government equipment sort the of planning And we know, to about sell, be I project. things, going serve incentivized Gary, market. of the Gary, you're these perspective of all capacity, to whether abnormally right such the amount no we whether used tools free of to not lunch. from a that to We an not installed think, think it's it's that going and we're end

is perspective, we a line are launch. don't don't demand affecting government an it's free of China believe a incentives end needed So from free location believe the just that equipment. We lunch that

next our from Moore And comes the question line Morgan Joseph from Stanley. of

portion that? And comes AI it of if Packaging is at HBM DRAM other Yes, the other -- types HBM, then I for even above clarity than rate, more and you and be that of I could of DRAM memory? us kind Advanced have that? relatively would some your is you would are on it -- talk just guess to wonder there Advanced HBM small opportunity when overall forecasting actually of [indiscernible] there's least. I all that's people encompassing give revenue Can that $XXX Or the And bigger. thought million run of for stacks Are you're doing beyond you about related a Packaging?

Joe. Okay. Thanks,

So we back demand. that. we on used DRAM was for think impact elevated that the going I QX, quarter, to the saw DRAM, the China from That approximation the the of first

but was estimate think seeing. quarter, to we're that incremental So doesn't good that it's going you're not exactly a the -- right, of it describe I every single

end up quarters allowed of Gary, And incremental for those in with we'll straight on shipping customers the... technologies. to DRAM X So China

HPM, increasing billion. we our billion packaging -- to almost And On Packaging HBM around is is $X.X again, in Advanced what overall Packaging the overall talked about $X.X 'XX.

us kind around it. of Packaging that's HBM how Packaging $X.X So $X.X think and About billion to total billion. the in is about for Advanced

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

industry over doing to year. than the Just Applied better the full route curious, in

of ICAPS and the bigger the terms quarter? occurs In revenue and between some this foundry maybe maybe in suggest current some around -- advanced that the timing in handshake around logic digestion but in dip July but pickup a midyear,

it's Brian, Brice.

outlook beyond yes, quarter. we're quarters not So going to future the guide

stronger, to the tell we've your on think side. be force you hard given the markets shape or whether edge -- to point, little leading end we So it's that digestion a growing Leading the And take. which ICAPS will will

we not going get until to that So quarters. we're call those to

Company. next from Shi And from question comes our & of Charles Needham the line

leading-edge have a for foundry I long-term logic. question

] and there get next end know seems high about of the years last I actually looking a may not would adopted drive that to that maybe out in EUV material was be the for are the to driving of lot [ could the XXXX more reversed because edge a before again actually you the of last XX I talked EUV -- manufacturers has little So EUV debt on decade, slow multi-patterning multi-pattern. years, adoption intensity lot jump actually the led Material Materials, And last to X discussions XXXX. EUV, the adoption the to does kind helpful. lead bit. equipment and of outperformance X like look guys But because a but like Does years, engineering be there the outperformance. think about up and more between engineering -- to of Applied trend Applied the If the thoughts suppliers potentially of that at think 'XX mean, that any back may I mean, back the recent half I again? I

Yes. question. Thanks for the

to, our something road talked about called largest I They customers, thing map going point one forward. their So they co-optimization. what's technology talked of would one about design driving

was structures and that from were new area said the forward coming is scaling of much basically materials. they they new So what driving going

is a backside get no So through that with example structure type of area size. power can savings XX% change an in feature you

many innovations materials technology of percentage So end higher. going I see we what we're technology. and spending technologies. there's different higher, nodes we decade, -- of the think that contribution the relative Packaging past of working backside see customers innovations, going what CFAT the out, certainly, with Gate-all-around, the power, There's for

those we opportunity have that inflections XX% are in accretive. All over very areas, those of share

-- point. a more contribution over to data see again, innovations from you higher And relative one I'll spending give of those do we go time.

double a is gate-all-around. transistor amount that 'XX. and gate-all-around to faster. innovation $X.X Applied So see process We data for the revenue Gate-all-around the and new in to than more almost in billion calendar 'XX ramping

well is So again, inflections, very where extremely powerful architecture Applied new they're positioned. those are --

Okay. Thanks, Charles. And session. close operator, getting the to we're of end the

So if question, quick time more for have one we please.

comes Barclays. from our Thomas from of final today for the O'Malley line question And

I the the getting edge but question leading offsetting. of talking in for handoff back up half, the half, is you're business, about another in second on half. kind Clearly, kind really little ICAPS first picking of slightly the had a the softer

from on seeing strength half greenfield existing you're additions? the where that is capacity new kind second fab strength in the would help be of where is terms the that helpful. edge, that is coming In leading build-outs of in Any or

Tom. Sure, it's greenfield. It's Brice. Typically,

your So equipment you're and I a typically greenfield shift putting start some think of you're if to able that. in reused you'll later process, part companies of do when the that first

So be expectation. my would that

Brice, us Thanks, like And that question. closing how appreciate would to your give you thoughts for Okay. today? Tom.

anticipated we've to Mike. that invest inflections. customers with we the technology most Sure, is me work in What to from stands and out closely our the market summary trends important perspective, major a

grows will beneficiary, years. the as spending be and a major AI IoT several think I over next

Our packaging positions we'll and me corporate higher #X than average, . backside confidence power that in share. advanced to continue gain gives are our gate-all-around, which

portfolio, we're operational makes demand we strong strong make in confident me meet can progress, margins. progress Beyond our making gross and which also

you. accelerating to March fund growth at hope enough more to I the Morgan generating our you many thank on Also, of and growing than is digits services see dividend. conference double our profit X. Stanley Mike, Finally, to

call. the Let's close

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

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

now You day. Good disconnect. may