Applied Materials (AMAT) 16 May 242024 Q2 Earnings call transcript

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

Good afternoon, everyone, and thank you for joining Applied's Second 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 measures. risks the call contained most the uncertainties Information XX-Q non-GAAP concerning with financial and filing includes in is Applied's recent also SEC. Today's our in earnings materials, which Reconciliations to in found quarterly are ir.appliedmaterials.com. today's earnings available our on website GAAP measures press at release and are

morning, have technology a from calendar SEMICON Before July we Tuesday Applied a X, to On host West begin, breakfast a.m., X I Francisco. X:XX announcement. at in will San event

architecture at be will After AI AMD's technology wiring I'd DRAM, Gary logic, and who us hope chips. Products Senior road turn future in advanced packaging. Mark introduction, Group; vision, President with us. And including outline computing you'll with will over call the share for along to inflections Applied's Dr. engineering Joining Engineering of Dickerson. power, We materials join is frontside Applied device with Technology transistors, Semiconductor our AMD. high-bandwidth forms backside of Prabu Raja, map of advanced that making Vice shares We'll Fuselier, Mark like other President experts AI along Product to memory and and

Thank Mike. you,

energy inflections road well as chip technologies for more performance that demand underpin revenue reshaping secular next-generation high-volume enabled from term. manufacturing huge our technology performance XXXX, benefit of and into as in over quarter high better the and end Applied a map Materials strong outperformance deliver trends position are global and of trends toward by are as production. higher semiconductor to are Semiconductors second Materials and will ongoing capacity The These the foundation the Applied we're driving move earnings to our trends guided economy. the the chips continued range, growth with efficiency. Key support great longer improved in chip

we way provide how AI. collaboration to inflections, innovations as implementing by major research customers today, double-digit and in and in to the for start and more Applied's industry's translates to shifts bringing Tectonic value our inflections, with all in as explain earlier, customers service with our the the we're new to I'll doing this, partners are of the accelerate how from how potential. addition, our broader technology, manufacturing remarks big-picture road I'll semiconductor in our examples capturing to high-volume semiconductor my development perspective. and a technologies business. I'll one every how and supporting driving well are have prepared and is And and electric several market the they complexity IoT vehicles our of enable all will In multitrillion-dollar common: the semiconductors. this including near energy they are I'll business. In over performance and map in area AI, built upon automation, service transform growth decades. technology growth clean some of including autonomous working also next describe future virtually with term economy thing helping deeper

they deployed, innovation are are technologies driving new the and ecosystem. semiconductor these As growth across

stacking high-bandwidth as logic; enabled long-standing has future DRAM; compute customers' DRAM I X memory inflections key technology AI chips of chips. believe to referred packaging both the the memory, by logic, at world's simple most architecture leadership are the materials interconnects. we advanced or some the the impact the of has next-generation leadership lifetimes. our processes in connect logic investments of solutions engineering these sophisticated together AI and scale, that package. Applied of road terms significant are high-performance chips the And key and technology be are and made technologies: X terms, essential our In advanced to possible inflection in for technology areas, heart and power HBM; maps. In in make and transistors create to or Applied memory of in semiconductor biggest data system centers will AI In that device a have a for advanced all and process leading-edge

nodes wafer month that considerably their module manufacturing. The complex, billion to Applied's to market use billion transistors are every shift first the to and $X gate-all-around process transistor transitioning gate-all-around of flows grows $X approximately capacity. now around from starts available new transistor per These for FinFET XXX,XXX are high-volume more for from

transistor process the gaining gate-all-around we're also on to XX% spending transition, for steps. share, and With equipment the we track over of are capture

have or speed high also used to market interconnect transmit very share in and low power. at wiring the We strong data

in wafer market expect to it generate $X.X peripheral revenue of XXXX. In available DRAM, technologies power more using makers XXX,XXX for billion $X one billion billion than Overall, improve each grow that expect logic when and gate-all-around power month, introduced memory manufacturing. starts and circuitry. that delivery for approaches approximately the we is the is into Our this to performance of and more the from in we wiring key consumption to double backside are implement by per potentially volume nodes is $X steps to than year

co-optimized used positioned equipment our deep leadership stacking to packaging we be HBM scaling, best makes the leader today critical position clear growth. In for our and in die that Last in we our quarter, larger technologies we via. positions, Xx also through-silicon memory, in future the than logic, in including revenue expected said in for bump process DRAM hardmask high-bandwidth in and strong with XXXX micro capabilities in XXXX. have solutions for DRAM Our patterning us combined strong unique in capacitor

we their portfolio we $X.X believe than device recently could more growing plans Xx now grow accelerate our revenue million. be advanced to HBM, from have to higher our this packaging billion we Across year, this revenue seen for now all product that to $XXX expect approximately capacity customers year. As types,

Applied products center served market. more is the Materials. Material next semiconductors are adopted illustrates that science develop increasingly as the to inflections major data computing generation materials integration Applied edge are we further see center heterogeneous is solutions beyond to industry's enable new to business our broad, portfolio early the computing. this from data that enabled to road double that example widely of engineering ahead, AI to Looking expand materials engineering unique map. that introduce AI semiconductor of the important just are high-performance underpin one a AI, we and has and invested opportunities critical by connected major inflections, for how again and ICAPS

We than headwinds rules created are period. of for a more data XX% that than estimate confirms consistent restricted wafer this by fab TechInsights that grew us XXXX, that investments We the accomplished market we those despite into China market trade during Applied translating year in faster row. the equipment outperformance. Recent the in from fifth

have to portion to generations more share devices equipment. advanced are becomes become of gained While even come X-dimensional, growing overall fab overall, wafer packaging within important served share DRAM an prevalent, market become our faster. This of materials future we market we as logic even because larger more is and engineering expect we

Another the key address Applied's the component of by strategy is industry. faced increasing to complexity

deeper we customers and collaboration driving with broader First, and partners. are earlier,

with rates and the the changing success goal investment accelerate mutual are increase efficiencies. model industry's to We innovation

designed support will we specifically of build Our platform technologies. and commercialization is innovation EPIC high-velocity several that out next-generation the to global years next over

from are accelerate XX% generated revenue that portion XX% grown The we major of by device and our solutions inflections. to in Second, able solutions has XXXX provide integrated today. complete approximately connected more to

and the We applications. And yield, for $X.X growth faster our communications, manufacturing agreements. serving long-term these transfer portion into third, with demand and IoT, expect from in revenue This the and at ICAPS this specialty quarter, service a to their customers performance, form technology billion, sensor high-volume a solutions growing then supporting service are significant continue power from is auto, for record fab-in-a-fab-type both in of are leading AGS our customers this of we optimize helping factory and business. edge who delivered new output of cost coming operations. subscriptions double-digit new

trends Materials Before economy chips Brice, road XXXX, chips over for EVs and efficiency. Key quickly underpin reshaping and energy are that better are I clean growth Applied on that strong driving in Tectonic will a Materials. from enabled to by secular AI, in the longer performance new the inflections map technology, to performance more to great deliver IoT, we position and over global in shifts including are continues semiconductor benefit term. hand the higher demand summarize. built architecture energy, and with device are semiconductors, I Applied

support packaging and move to our our HBM, double-digit integrated earlier, Applied deeper collaboration and our service solutions most broader customers accelerating for supporting logic production. And is our partners, outperformance this Materials finally, in high-volume expect and road growth between complex including the into advanced, We business. co-optimized and industry demand nodes, and advanced driving technologies, increasingly next-generation DRAM chip high-performance gate-all-around map and ongoing and as

to I'll Brice. Now over hand

thank for will solid our how our model, execution, strong to focus and we're Thank guidance I'll we and sensor environment communications, teams also and semiconductors you, which auto, trends that like XX% allocation Gary. I'll revenue market the global discuss into operating QX and margin. gross and quarter optimistic attractive serves for industry. help calendar driving for semiconductor our our data demonstrating our capital power provide insights results Today, and the for and outlined for QX. In are the profitable QX, And grew ICAPS center business returns. their our I'll resulted Gary overall which shareholder drive business, share the another IoT, I'd in and strategy markets. growth describe summarize year-over-year, growth

earlier utilization discussed across providers had we PCs data leading-edge device DRAM, of leading-edge it news #X then we customers. In ICAPS other and in the in DRAM, forecast fiscal data the center our advanced the will strong memory eventually plans, of increase driving the forms During AI quarter become issued for market which across demand and advanced driver is types, is in February, a announced wafer packaging, that that years. we our how technologies our smartphones surpassing coming logic, business, for high-bandwidth factory month, did. starts, Gary foundry/logic quarter, and would we cloud megatrend capital strong this used spending QX strong packaging. the projected good Within the and center briefing services. In market all service

our at innovating believe business ahead. We which business a reasons. Two, is leaders large driver third edge energy, is devices chips decades business in introducing ICAPS our edge chains which we position electric ICAPS achieve level, XX-nanometer renewable market broaden Our drivers at ICAPS demand to used creates this ICAPS device notably: for applications. A in and industrial for vehicles, automation Across new chips, are A the as computing, long-term One, capture IoT will electric overall demand industry net-zero supply goals share. support demand and ICAPS plans. we of chips our and sales for is node of driver for increase IoT finally, makers their and customers. vehicles, the are driven foundry/logic largest chips. year power unit continue help we home portion second renewable will the the and X and our smartphone are solar described needed megatrends, and growth will which Applied's several to needed and establishing business, And especially partner the highest-value extends wind better gain where of for are now power companies us to megatrends computing, system stimulates segments, one remain autonomous the is energy. reach by products our large by to the additional additional

results summarize our I'll enables. capital and the Next, strategy allocation it

efficient generates free Our flow. cash business model healthy

to And buyback share program to Our is our shareholders. profitable growing in to first and second our investing distribute flow infrastructure and enable is excess priority per using capital R&D dividend priority cash our free growth.

fiscal to we XX% in reinvested over R&D cash past the flow billion billion free capital years, XX additions distributed over $XX of more than Specifically, $X and in more have and than shareholders.

supports our I'll operating summarize. strategy which allocation model, capital Our

over customers described. in we we've invest year, each $X with technologies new are visions megatrends in semiconductor the First, to to collaborating their global that competitive our invent billion R&D closely critical

packaging technologies design systems that manufacturing these chip global deploy scale. and new customers at we advanced our Second, enable to high-volume

factory tool we solutions. leads back and activity to distribute point high our more and which ramps cost. stable And service of cash and ship into important customers base this helping these network our every which and from installed growth our we excess maximize global shareholders. An that yield and decades a by technologies Fourth, output, return profits have accelerating the a finally, to manufacture R&D life, Applied optimizing the to we systems. and Services. new consistent manage manufacture develop for reinvest and supply on we service Fifth, percentage is Global we Third, to chain of opportunity, systems, grows investment useful

in announced is In year, of company service XX comes summary, Also, of recurring we spanning has has increase services XX% year-over-year dividend shares in our non-GAAP AGS XX% AGS of sales, fiscal under free revenue nearly at which per and share by XX%, fact, Connecting at about XX%. growth, long-term nearly consecutive our years, agreements March AGS cash we of XX%, we growing over more memory capital net that this this XX% X parts quarters our fully outstanding this Over fund announced XX% model at a past enough have than reduced increase. X/X share. a a delivered per over has In and XX% EPS downcycles. continued compound strategy, rate increased allocation delivered from to our XX%. over of dividend. In to flow dividends renewal over period, operating a the XX XXXX, March to operating produce rate. revenue at profit And

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

segment record X% Applied XX.X%. operating to results. revenue margin non-GAAP systems Semiconductor was Services increased remained year-over-year at implant billion, was operating revenue Segment included $X.X sales. and strong to and Turning billion $X.XX non-GAAP XX.X%. segment margin Global ion

Our surpassed tools subscription the base increased agreement of time. installed for and year-over-year, by X% chambers first under XXX,XXX our

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

becoming more notebook, capital in larger technology an sizes in in confident be OLED the are smartphones PCs adopted spur screen and found tablets We that with will would increase investments.

million $X.X generated and operating cash average to dividends in including We cash $X.XX distributed $X.X nearly in million We million and Turning in repurchased shareholders, $XXX.XX. billion cash price nearly flow $XXX buybacks. to QX. shares of We in billion $XXX in flow. flows billion an X.X free at nearly

I'll Now share for our QX. guidance

minus of revenue of billion, $X.X minus plus expect of Semi EPS around and revenue revenue billion, AGS non-GAAP [ Within about of outlook, of $X.XX or this around display $X.XX. $X.XX billion or million, plus ] We and $XXX expect revenue $XXX we Systems $X.XX, million.

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

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

let's Operator, Thanks, Brice. [Operator Instructions] begin. please

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

your for you your versus with 'XX. half I backlog outlook building visibility as second today conversations your guess talk as pertains ongoing as basis would how are on large for into going love potential first kind about your a and it to that calendar customers of half calendar both well to

thanks Great. question. for Okay. C.J., the

the that to off ramp in the indication China what strength Gary And drop-off gate-all-around exactly shipments are on manufacturing. be the That DRAM, to what And QX, fill half. We will we related grow of And then strength were gate-all-around. point business to high-volume that second we for HVM, be see as drop-off So beginning that in see QX. that that DRAM. ahead in 'XX. look that and of leading 'XX we same is out expected to in a and would side logic that's highlighted able our will half. expecting that about upcoming. his about as largest And whether leading had QX in logic. in our the QX fundamental I been gate-all-around ICAPS the leading look we happening advent that's would know in consistent look that's be and 'XX in in technology technology we earnest think for in at expect QX. that's we backfill QX remarks $X.X equipment we've logic leading significantly that fairly we think towards the HVM at in when earnest good ship -- expecting talked the able And process China second in for what billion we what to will business and with to and be logic the of customers, called and when exactly ramp we're guidance for to ramps process that the ICAPS falling we DRAM high and for shipments we've that And

Stacy from from our line And the next Bernstein of question Rasgon comes Research.

Brice, I I and that wanted up wanted to -- on sort XXXX Gary, of to qualitative follow outlook.

So this ] year you I next doubling guess heard you more. or $X.X incremental billion [ said I right, year,

WFE of been opportunity from be again theory, growth growing. year that over for relative those given right X was. overdelivering has other. It market. like guys let's growing. how think do those like how billion given in should where be than year-over-year a the to you drivers? you've we're I so to a Like know could say sounds I feels said should about the flat market the time, close about the had it it's mean, just how ICAPS, -- versus $X.X I I flash would gate-all-around, market like grow. And to like is double HBM, -- you packaging guys So mean was so event bottomed it that is talked to incremental well, about little now that how the weaker you grow I think pretty next NAND seeing drivers, given as

Yes. Thanks, Stacy, for the question.

longer-term perspective, the our inflections -- start described, view. with as way fastest-growing And key investing the markets. we're the for the Gary we So in

we market business, next and over and logic our years the will the stand than gate-all-around if advanced power, perspective, those share. many the memory, all packaging, And think will of is so the grow that HBM think average us leading help services back faster backside like and you gain technologies our quarters several or

all has share over great tailwinds. about our time you particular to having the last that And harder from thinking talked ICAPS technology near in NAND, of improving. I utilization We about any ICAPS that we think, percentage it's short years. period perspective, how out quarter is XX DRAM them. points would DRAM perspective. And and and the talked our and a in called so gate-all-around improved I think DRAM over and or future, We've be XX call but about HBM expect a And

DRAM are our that of the we those X that to then gate-all-around, our in and year, strong and So expect year. guidance. about business ICAPS, the shipping in you market, can that's very business gate-all-around X grow ICAPS first a that shipments quarters China positive. And we And to quarters that just -- are billion in here in X Gary highlighted, if is do drops that grows our that's think have the entire for incremental. $X.X off. And finally, with see, some that we QX That's fill closed associated are next the that this that not QX

Gary. this architecture focus device Stacy, and is major enabling big Really, us the winning inflections. for is

break when grow us. opportunity high big inflections. for for different power strength So share you The there very edge, segments, these those certainly, to because is out us is of delivery, wiring the real foundry/logic, a have we device all significant of leading a gate-all-around, backside

materials to years. in DRAM going forward XX As better DRAM, be a even Brice I look much us. that's Those of more materials-intensive, mentioned, positioned. really inflections last the engineering-enabled. XX gained in points good share And position DRAM, over architecture for be And will the at we're we if overall

we the advanced business, Xx of reiterated, our to that to We've packaging packaging. a advanced increased architecture value highly workforce, growth more also That's in an these with Xx services a from 'XX that's into opportunity have opportunity services packaging Also double-digit rate, talked HBM, business. one as it go really our where Brice with packaging mentioned to great -- moving now. -- XXth our $X where growth we've We this $X.X locations And consecutive and that's to is have growth. in I an experienced business. inflections, last people right quarters services gives But about we've they but double about are we've In as our growth year-over-year, we billion seen forward. us billion. adding complex significant don't increased run view year. And talked new add as

a So other there's few thoughts. just

billion than gate-all-around that gate-all-around in this XXXX? in from you I double But did $X.X more suggest that -- and year Does in $X hear said wrong? billion that

Yes, that's what...

misunderstand I Did said? what you

math is that think correct. I No,

that's right, Stacy. Yes,

the have that So we'll equipment technology. not increment. That's entire for the that's just sales that

this for year billion that next year. to and $X.X So opportunity double

from from our question And next the Lipacis comes Evercore Mark line of ISI.

about margins. you used more to engineering, you're reflected up -- when a the Gary, be Gary. chain the for place it moving a the more up adding climbing lot investing of your companies like see talk times domain. to chain you question value and kind your where see Maybe it ultimately, materials And in that seems customers' when you value in of value, like improving

that. if you the and more So at ultimately, and you partnerships appreciate expect profitability. Or value, philosophically talk adding about how it see in you're is back that that's end ways? day, the something that should happen? that spirit. engage could Like wondering the would in come like just you manifest that if like I'm But And of to you seems other -- does to higher

Yes. the Mark. question, Thanks for

first device our are their look racing to to overall, market you position. if those customers the competitive major be architecture deliver all industry So that determine to at of inflections

is new and and So costs. gate-all-around, power important backside architectures more becoming more power, to and DRAM those performance packaging

clear. industry. future. that We're is into generations customers working shapes what in technology the really So with landscape very it's the for And the very, our competitive out

customers really with inflections. as We -- an those have materials we percentage broad, Applied and contribution And increasing. leadership, see built is the portfolio. this inflections. And do capability connected in a look especially with we connected this they're very integration has forward, clear architecture our relative to opportunity as co-innovating spend those of those that So deep as engineering Applied and we with tremendous relationships driving customers inside really in us engage on we very and broad gives high early have portfolio architecture and that visibility

those believe, as And with for in more more for we focus our capture we're do relationships valuable with them. and that creating certainly more value sure, I will value delivering them. customers, that our is be to value So is

So question, with agree I your basic thoughts. your

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

to back gate-all-around. maybe Gary, the

So the there by you're raising billion. forecast $X

billion I it you're $XXX so. So raising it half Is million all that and thought to is than or a mean October? the in before? And on then HBM, by is think, gate-all-around, conceptually, I increase year of what over $X versus another what second that growth is show what over $X.X you number. going does higher you billion driving up $X on, very think such significant billion a before? thought the July strong base

kind So than half second just what higher are that then billion quantitatively, just what you thought And is factors? the does before? $X.X -- $X the it I'm curious, also higher of billion qualitative mean

Brice. here. it's I'll Vivek, just do a clarification

was revenue This gate-all-around bit that quarter it about a talked when incremental confusing. -- we little last the we cited for quarter

this associated in about the we're -- transistor talking our and changed that's we gate-all-around of So with revenue quarter, all wiring.

so increment. not the And just that's

So the We're basis. billion to changing talking is talked quarter just about an this be to the increase supposed as billion not last that quarter. interpreted about we're $X.X the $X we relative

quoting the just associated product. business we're that's gate-all-around all Now the of with

So hopefully, that helps.

of as our see is increase, then much. ramps. don't do And I this next as for the grow can perspective So say I driving about some as think you year the that billion It's in has technology answering significantly very would $X.X what's far year. changed our guide. QX the what question It

know, filling down and growing we or you we driven dropping are gate-all-around. with DRAM had. off logic China second ICAPS the leading as that -- that strength in So by we're shipments that the And shipments half, took in we're incremental

relative things, me incredibly current you're add, of what these to Vivek, leakage, power the all of kind where difficult. technologies are incremental spending, consumption, the device those let performance, drives improving drive

so this different magic the we're and customers all broad portfolio technologies. that materials with that it's types And really able provide to -- of about of

technology AI of nodes are road they type every computing performance, are those step at the as high-performance different for one for applications. driving -- demand increasing meet So power counts computing, of to maps especially those

those XXX accomplishments difficult materials. amazing, XXX amazing spending. So That's technologies. again, or kilometers drives in very, in it's with of an applications processor, GPU really those a what Whether very are very, technology transistors billion that are incremental wiring

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

packaging, specific with were The what this expecting you're on question year. pretty is advanced and you

the opportunity to spoke again. double that You about

didn't time You a on that. provide frame

you that us could the expect advanced in mix terms double you of And what's that. What's logic help know we terms just frame if some So packaging time with HBM. and there's higher? the that, in of driving expectations to driving in when on of of what's the

this Gary. Chris, is

tremendous drive So the at packaging, focus advanced industry. look heterogeneous entire high-bandwidth integration see major memory. or around is this whole the in really you any AI you different innovation servers a When across of these kinds applications, of

high-performance industry's in we of see And technologies, innovation chips those together road growth significant there the all of the going the you're driver very memory have how tremendous to will with Moore's This logic added important and innovate You map down significantly. so kind major because connecting how forward. And is really bonding, CVD, very, it's chips. broadest portfolio see classic of plating, hybrid Applied, we as Law the being digital lithography, eBeam PVD, We've test. etch. has another slowed industry of CMP

see back to really your business have why drives forward. road broad And -- what incremental We I inflections are portfolio. and those going we this come architecture maps as very a is

memory the see customers, for for our can foundry/logic we maps So road customers.

types very in investing are technologies. these them of All heavily of

these going there. keeps And up I that And business innovations rate Xx areas new also some that from think the higher. drive are compound from of that annual Applied will us help growth

broad The Chris. customers that leading in our other innovations, working we in connection is all full-flow advantage customers portfolio those We're on multi-generation Singapore. next-generation that lab have we the have with our besides with this packaging of deep,

time good line over years come pretty not have those on very, frame very inflections in optimistic those what strong opportunities a position as happen our specific look of number to inflections giving in of market. we inflections like, our share grow We're about a sight architecture So will to a doubling. It to but the look very packaging. the like will

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

a Brice, China. on I have question

quarter, expect you end year. last China of to you or think I by so said the about to normalize this XX%

still is is, looks pretty question still expectation? like ICAPS up And the that my well. it then So holding is

the decline to auto kind it relatively mean I'm the forward? the is DRAM what's is I weak we're just end just and broader to ICAPS. of we going as like as markets what And of about strength seeing hearing driving curious I'm primarily curious in in still are what looks the So analog given ICAPS, mixed. is

Yes, first respect a half of will to the the our of to year mix our second percent Okay. Srini. as as China of with total all, revenue. we Thanks, move normalize

will the it off in to for the to And the mix years, QX, back which will of over what's XX% China with business. DRAM you XX%. And the as we we'll it's expected. highlighted. closer and QX respect some to few about dynamic We customers percentage as and of that then average China last that last revenue had closer be fall X down bring our catch-up really call to Those -- through quarters. shipments particular will So to go

increase business falls does DRAM that our that in. business to business our as leading-edge and logic ICAPS fill off, So

markets in the The market well. And be I strength you mixed. ICAPS-related. And so for think ICAPS, of are described China would rest the us that's end in consistent continued it with which

So of auto And sensors, PC-related weaker. stronger. gaining slow been power have industrial been those strength talked as have image some then but we've about a been lot chips, microcontrollers, and markets recently. Smartphone, products have

place the we've but demand. So it's those utilization it to been in capacity mixed improve. see for demand forward-looking are forward-looking when in markets, And get customers seen investing we and for end markets,

us best I tell and guidance, for ask the So QX in another people we ICAPS QX will you were be strong when in think can quarter ICAPS strong and the hopefully, is market. thing very QX

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

us across the rank Very to as you $X.X question Is well. I on in [ this funnel the like pretty year. foundries? driving have demand? doubling broad for if can outlook, what's for strong customer a most TFE, And next also billion gate-all-around demand the the X ] order billion, patterning, ALD $X.X

I'll part. take -- think the first I

is I across customer base. think that demand our

customers. we I or I'm not but any it's relative Gary equipment mix anything would highlight there. between if one don't details single about then from the there's know sorry, a perspective, customer, So balance you mix, share And -- won't device

Yes.

think advantages these integrated tools that integration with working inflections. I and co-innovating they're again, really we with also broad one of engineering. the of Where is we're our along on different have portfolio technologies customers, technology this

CMP look and you have gate-all-around, PVD, selective implant, etch, removal at we if eBeam. processing, thermal ALD So

of with broad tremendous together very co-optimize thing I'm a and FinFET broad the connect in to doing we've going about were to our structures ability thinking performance. back different building that a also, that same power a done pieces. it's and you're you would those portfolio. is -- as in what break out And co-optimize how portfolio those so really And you're this is able we're to ability to So all I our say can not innovate -- But gate-all-around. where and strength we in improve

your Does that answer question?

Yes.

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

X quick on NAND. had other ones, the I on and one HBM one

So 'XX. out, in HBM, for would tell certainly us they're sold that your customers

part, out most they're the For for as well. 'XX sold

to overall 'XX good zoom the you side, talked medium business guess when is visibility could you've a my got to doubling multiply on the next into you continues NAND year-over-year But term. year. Gary, basis? And packaging depressed. pretty that long So for HBM, then the into pretty you advanced business again over be in on about

or flow orders profitability they for need do see them to from Your again? their what your on less back? becoming cash WFE customers, spend starting you to come to customers improving is see bad. purchase Are is Or improving,

Gary Brice. start HBM. Toshiya, may something and Okay. then add it's I'll on the

the XXX% on DRAM So We've we a increase utilized. probably it's we do XX%. wafer sold-out to the seen starts. HBM what X% not across the allocation to have utilizations from comment, start seen from That improve perspective to closer something said, wafer --

could could orders what the there's have -- going for if restraints, packaging the seen up. speculate side, it we you in and be HBM So some

to those So about let that from vendors talk that have think we'll and perspective. you to

aggressively. very Moore's is demand is the alive upgrades, bit. in meeting NAND NAND means fairly wafer it's is in NAND that business is what the technology starts. our on is end. NAND bit And generation increasing The side, the Law of see perspective And each much really On new the we with function density technology -- increased for that more for upgrades that really still not

several So storage important out the that's very is part, grow even expect NAND the what that we called grow. vendors and overall, expect to see AI at has storage it important of speed how a as and obviously, will we -- we move of to forward. semiconductors. It's for And

it's memory to then, be for think specific And total whether expect WFE. it we anything HBM... I time and been us, slow, over to about our back X/X you Gary, for but on sales of grow So in to

nothing seeing to more increase we I for went what we about Xx we the have would you HBM Brice Really, demand to strengthening. time last about. We too the demand Yes. say that Toshiya, are still increase from incremental was Xx beyond from going really And And forward. much talked talking seen that guys.

that any customers. there we next do not segment. stronger demand still We're is see pull estimate that for in year, giving to So but point continue from

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

backside on spoken it: It had I you've wiring the kind approaches? about XXX backside does X Gary, I'm the X next is industry is $X has also the power question starts approach. SAM this split revenues delivery. for between billion in you kind expect backside curious, power that contact and to the nano-TFE How Applied for -- direct of one per And seems once approaches of can it quantify another wafer the with with year year deliveries? transistors, you those month. XXX,XXX what a incremental

Krish, backside customers yes, are about going those focused everybody talk I the connect that specific too direct want much is architectures don't of is say the that confidential forward, would I that to all for on. to that path different customers. the That's using.

that a engaged will over deeply grow leading well, on we're significant wiring -- a overall. time, that fairly with think grow amount I significant So customers both in will amount. of inflection. We're And fairly approaches those

share very, of We have a very high wiring.

we've that inflection happens. an spend so gives us that, that when said of going opportunity that of backside, to the And wiring XX%

to So backside, the approaches over which one both terms supporting of I bigger for do see we're different get time. too of we those want of don't specific types in but

in don't I timing timing, think give that us will it ramp could 'XX, significant But to going that's move XXXX. I to the maps. Relative connect. direct different for 'XX in right want be now for customers' ramp beyond for backside but in pretty It because revenue, each specifically it's still road -- grow is to one small power of out to that the revenue.

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

revenue on Brice, in that is DRAM wondering billion part Is I I about I kind at billion fiscal the If QX? look step-down China. that So Can DRAM. down the X did, of in first of how looks talked whether right you more DRAM all look you down is coming $XXX China. confirm QX? billion the that questions China help is in it $X.X worth about figure us fiscal have and the ballpark? that's you of million. for the much can stepping if then $X the DRAM it what's Korea broadly, business, assumed China And of And I'm of out how way like at much $X.X

was where that quarters more DRAM I The Tim, was as quarters our that we million thanks quantification gave had in only than $XXX incremental. prior for the question. in a up that whole the

I mix and in it's into leave that it And company, quarters. And but which QX. half, about it doesn't earlier more question, it for to an highlighted it's of think revenue will for last each China in than close pretty just be the second the then drop X $XXX to completely So and is significantly the the I normal say of look as drops to we at as us. million I'll range QX, to X our X XX%, in in

as the question. I that. can I that's So on close get think as for Thanks

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

you're from look growth at non-China? you're that the wanted us as kind mostly Can just try of that the trends is rest just sounds ICAPS. I of seeing in to just understand ICAPS. help China normalizing, that China Obviously, seeing it understand the versus the falling off. in to difference the Because you revenue DRAM we like

So us China between understand of non-China? the help trends just can you and kind

is strong. would been Joe, thanks I last X for the the question. Yes, quarters for say have China, what very

kind one reasons digestion the we're seeing. didn't a So if we're that of by period, speculating about of I what going reemphasize we're a is slowdown or

So had quarters, X QX. we strong QX,

think quarter and ICAPS growing. in growing now, I not QX have of about strength and world right regions fourth again X Our we the rest strong China. When we guide regions a has for the think the

end sort So point. that corresponds mixed the of with this markets being at

of a was out. X is overall, showed carefully. We've in largest of that words, was capacity, In they're understand last China Utilizations XX% factory are China number a May improving. are yields ramp our XX by on ramping. -- we chart put about than other different pie ICAPS large got ICAPS, customers. that projects got Our view monitor improving. about we've elements adding process. utilizations. they -- that of year. the that team and the market device We're WFE pie WFE chart of they're of have are about different capacity, more We're tracking XX in We tracking

important very by a So we think be for and us don't said the this that China and think market market that those forward. large remarks We for going all market, see cliff point. stick we will at we'll I

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

yield for also resolution new your but right? forward, that of tailwind look portfolio like your And you challenges, typically guys specialty be grow the this sort control transition heavily As rising how edge, still smaller, we a foundry/logic does the diagnostics tools portfolio Applied probably profile given seeing driver advanced profile tends very it's defecting leading leans years? faster pipeline to memory so and a manufacturability the for eBeam leading-edge Xx better So and next overall picture see your and the like mid- over process intensity required, and year? to on advanced year? team next spending than portfolio, year. Are WFE a right? more which of solutions, this from going strong process longer diagnostics control growth to most ICAPS-driven sizes intensity few and this challenges, get maybe And more a CFE-driven year does significant this mature Because term,

This Gary. is Harlan. Thanks,

on and sure, these would have major say factors. eBeam there of the gets that because, first a and for So inflections a major relative the How learn learning we one real who to architecture you those for connection determining again, is our inflections race is rate. I technology us advantage it's with that fast architecture

good resolution advantage our of obviously, it's a So synergy that a with But real rest perspective. for broad from having this our capability unique a us revenue mean, driver growth the for Applied. I is a portfolio, connected real in coalfield highest up technologies emission, the higher one imaging portfolio, key the is advantage. optics, gives speeds. us to XXx electron at the of is On which really it

the than of pipeline we've had new innovation products the magic, process really with our 'XX, XX% and rest then our So CFE systems synergy it about of great would of is still materials revenue on for we a are ever forward, Applied. as around equipment total strongest grow of the year to that really is business, growth driver PDC our all And increasing. And had. again, see look highly represent I I Xx eBeam differentiated. this in materials when track sales. And We've system that

the So business. shape very again, very, of optimistic that about

Susquehanna. the question final our from of Medhi from today for Hosseini line comes And

later packaging. Gary, to be The you gate-all-around wafer and about leading were would that talking that be in and is the this it and logic, additional XXXX? point not memory in shipment coming fair especially POS is be something technology that for this be your advanced backlog placed in? DRAM for would capacity, inflection But what HBM, would year say

do will question increased take wafer a not, really probably we Mehdi, or place starts one. We where NAND, Brice. don't that we I in but starts that can't definitely DRAM. smaller increased ICAPS, wafer if I'll upgrades. expect greenfield leading logic, is And amount tell still but do it's be I definitely Yes. -- across it's a the expect guess expect in

upgrades. memory the technologies it the But of technologies most of new board. new are and combination a equipment So plant and across will be

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

Thanks, Mike.

goes big strong for future Same AI solutions #X where I automotive anticipating our and from we've wiring service helping energy, IoT us to at road I chips, map an AI. X. Thank and center Francisco gate-all-around HBM are in job subscription-like stable on in We business, our transistors BofA drivers inflections fuels San and a done accelerated business our XX, lot edge, pull think is Bernstein rate. Gary especially materials see data the increase very wiring for more in stacking. In systems to many ICAPS very plus in the in Mike. and of will York clean on packaging. long-term June say which can in which good and we're momentum backside driving positions at you our in advanced you, DRAM, a we'll business. our the in May conference the calls, have and New the engineering growth and of to The about dividend at frontside see in and hope Conference be

the call. close Let's

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

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

day may now Good You disconnect.