A：In fiscal 2025, Applied Materials delivered results above the midpoint of guidance, marking the company's sixth consecutive year of growth with annualized revenue and earnings growth rates of approximately 12% and 20%, respectively. The company built new capabilities, strengthened its product portfolio, and streamlined its organization to prepare for future opportunities.

A：Trade restrictions led to increased trade tensions and an unfavorable market mix, which impacted Applied Materials' business in China. China's revenue contribution to the company's total systems and services revenues declined to 28% in fiscal 2025 and further to 25% in the fourth quarter of 2026. The company expects reduced wafer fab equipment spending in China and anticipates no significant changes to market restrictions where they can operate.

A：In 2025, the fastest growing areas of the market for Applied Materials were segments where the company had low market share, with a focus on leading edge foundry logic investment and advanced lithography. Additionally, the company gained strength in DRAM, where revenues from leading edge customers grew by more than 50% over the past four fiscal quarters.

A：The discussions with customers and partners from the recent trip to Asia reinforced the view that the semiconductor industry and Applied Materials have never had greater opportunities. The customers are engaging with Applied Materials to ensure readiness for significant production ramps in the coming years due to the significant demand for semiconductors and semiconductor fabrication equipment.

A：AI computing is fueling secular growth in semiconductors and wafer fab equipment, reaching a tipping point that is accelerating investment in next generation computing infrastructure. The semiconductor industry is forecasted to grow at a compound annual rate between 10% to 15% over the next five years, driving an increase in wafer fab equipment spending. Applied Materials expects 2026 to be another growth year with revenue weighted toward the second half of the calendar year.

A：The core strategy for Applied Materials is inflection focused innovation, which involves partnering with customers to identify technology inflections early, focusing research and development on critical challenges, and creating highly differentiated solutions using a broad portfolio of capabilities and technologies. Recent product launches at Semicon West exemplify this strategy.

A：New technology and products developed by Applied Materials include the Exerra epitaxy system for higher performance transistors and the industry-first integrated wafer bonder, which improve performance, power consumption, and costs for complex multi-chip packages and die stacking. The new systems also include enhanced metrology tools for improved yield and defect detection in 3D devices.

A：In 2025, Applied Materials' core service business delivered another year of double-digit growth, with more than two-thirds of service revenue generated from subscriptions and support across the company. The adoption of AI and digital tools is a key trend within the service business.

A：The company's inflection point-focused innovation strategy is positioned to deliver another record year in 2026, with gains in the highest value segments. They will capitalize on technology inflections in the fastest-growing areas of the market, particularly as next-generation technologies ramp up in volume production.

A：The company forecasts that leading edge foundry logic, DRAM, and high bandwidth memory will be the fastest-growing areas of the semiconductor equipment market in 2026. They have strong leadership positions in these segments and are aligning their R&D investments to create new products and technologies for faster and more energy-efficient transistors, chips, and systems.

A：Revenue in fiscal 2025 grew by 4% to $28.4 billion, with growth across all segments. Semiconductor systems revenue was up, even with trade restrictions significantly reducing access to the中国市场. Foundry systems revenue set a record, along with record DRAM sales outside China, and revenue growth in Taiwan and Korea. Applied Global Services revenue grew 3% to a record $6.4 billion, with the recurring parts services and software portion growing by double digits.

A：The company announced actions to reduce headcount to scale the company more productively. The additional spending is being allocated to strategic areas like advanced analytics, which are essential for the efficiency of their R&D programs.

A：Non GAAP earnings per share increased 9%, and the company generated nearly $8 billion in cash from operations with a free cash flow of $5.7 billion despite elevated capital spending. They returned approximately $6.3 billion to shareholders through dividends and share repurchases, while operating income from Applied Global Services covered the dividend payment.

A：For fiscal Q4, the company expects revenue and non GAAP EPS above the midpoint of guidance, with a decline in China revenue. Non GAAP gross margin is expected to be at the midpoint of guidance and up from the prior year, while non GAAP operating expenses are slightly higher than expectations.

A：Starting from Q1 fiscal 2026, the display business will be reported in the semiconductor systems segment, and the 200 mm equipment business will move from Applied Global Services to semiconductor systems. Corporate support costs will also be fully allocated to the businesses. These changes will improve operational efficiency and provide better visibility for investors.

A：The company anticipates that semiconductor equipment spending is likely to accelerate in the second half of 2026. There is a positive outlook for fab equipment spending mix, particularly for applied AI, data centers, and advanced services that facilitate customer ramps and yields.

A：Applied has very high visibility and co-innovation relationships with customers for technology nodes a decade out in the future.

A：There has been a major improvement in customer demand visibility, with customers planning large ramps of advanced factories and requiring assurances from the supply chain operations and service teams.

A：The headcount reduction in Q1 saw no uplift typically seen for annual pay raises and share-based compensation increases, which should be quantified in that quarter. The company conducted a year-long program to increase velocity and productivity across the company.

A：The company has innovated the way it works with AI and digital technologies, driven higher velocity and productivity, streamlined the organization for future performance, and positioned itself to meet major customer ramps in the second half of 2026.

A：The company holds strong positions in gate all around and backside power delivery, being number one in process equipment for leading logic and foundry, as well as in DRAM and advanced packaging. Despite increasing competition from China, the company is confident in its share growth due to deep relationships with customers and strong demand for products.

A：Trade restrictions have impacted the company's ability to serve parts of China's WFE market, leading to a reduction in business from around 10% to over 20% of China's WFE market due to new limitations.

A：The company's PVD technology is doing well where it can compete, with plans for growth into the future, supported by strong demand for low resistance wiring in advanced chips. The company is also innovating with new PVD developments for ICAPs.

A：The impact of the transition on revenue for Qi and QA is expected to be approximately $15 million for each segment, totaling about $30 million, as the company is moving this amount from its services business to its equipment business to simplify management and reporting.

A：The expectations are for strong growth in WFE, led by leading edge and DRAM, despite some headwinds in China and in ICPs. AI solutions are expected to drive the growth in both leading edge and DRAM. Applied believes they are well-positioned to outperform in the market next year, given their visibility and the expected growth in leading edge and DRAM markets.

A：The $600 million headwind mentioned is included in the guidance for Q1. The company did not ship this amount in Q4 but expects to ship it in Q1 of the following year. The headwind is still being closed in terms of delivery dates, and there is no provided linearity for how this will play out over the rest of the year.

A：The estimated allocation of WFE for AI data center solutions is about 15% for leading edge and DRAM wafer starts. Given the high growth rate of 30% CAGR in this segment of the industry, it implies that companies planning capacity for the next 2 to 3 years should allocate about 15% of their WFE towards data center solutions.

A：AI demand is expected to significantly affect the product mix and positioning of Applied. The two fastest-growing segments for the future are leading edge foundry logic, including high visibility in DRAM and high bandwidth memory (HBM). Applied is gaining share in these areas and is well-positioned with strong leadership in technology such as FinFET in DRAM and hybrid bonding for HBM. This is supported by discussions with R&D leaders in Asia and the fact that HBM will adopt this bonding technology in the future.

A：For the semi business, the demand trajectory in the second half is expected to be significantly higher compared to the first half. Growth in the Ags business is anticipated to be at low double digits and continuous throughout the year. The semi business, however, is expected to be flattish until the growth lift happens, especially in the leading edge, which is expected to significantly uplift demand in the second half. Gross margins are expected to remain in the range until there is a material lift in revenue, which is anticipated to come through in the second half.

A：The AI demand throughout the industry has significantly driven customer profitability. The company is enabling innovations like hundreds of miles of wiring in advanced chips, which are highly valuable for AI, and is continuing to work with customers to bring new products to market.

A：Chinese affiliates' equipment shipments are expected to impact the first quarter, with the tools being built and shipped in the balance of the quarter. The company wasn't initially building these tools and only after realizing they would be able to ship them. Consequently, it will take time to finalize the supply chain and make the builds. There may be interest from customers to work quickly through this process.

A：The company believes there is no need for concern about ALDS eating into the PVD market franchise. They have deep visibility into technology roadmaps for multiple generations and high confidence in the continued growth of PVD. The company is also highlighted as being the leader in wiring innovations within AI servers for high-speed data movement with low power consumption.

A：The company has extremely high visibility and unique technologies, including PVD, and the ability to combine technologies and integrate platforms. They mentioned innovations such as the integration of selectively with PVD into an integrated platform for critical applications. This is expected to result in a billion-dollar business for the company and will continue with deep visibility into future technology nodes.

A：The impact of China's silicon product digestion on revenue growth is expected to be more than offset by the strength in leading edge and DRAM highlighted earlier in the year. The company also anticipates that if the digestion in China is lower than expected, revenue growth could be stronger.

A：The company foresees that China will remain an important market for ICs, accounting for about one-third of WFE (Wet Chemical Equipment), with memory and leading edge foundry logic also being significant segments. They expect a return to more normal levels of demand in the longer term for China's role in the semiconductor market.

A：Factory schedules are important, and while there is macro-level industry capacity to ramp, individual customer situations regarding capacity and constraints must be evaluated separately. At the time of the speech, there was no indication that capacity was limiting the ramp, explaining the anticipated second half inflection in comparison to the lower first half affected by China.

A：The company claims to be holding its share and competing well in China by focusing on the accounts that they can support. They acknowledge losing share in China due to a larger portion of the market becoming inaccessible, as more than doubled the restriction on market access for them.

A：The company's DRAM business had a significant increase in sales, up something like 50% in the last year. This was impacted by the discontinuation of applied DRAM by a competitor at the beginning of the fiscal year. The business had very high shares in both DRAM and NAND, with DRAM seeing a major impact due to the competition.

A：The advanced packaging business in fiscal year 2025 was a bit lower than in 2024, which was buoyed by high HBM shipments at the end of the year. In 2025, it maintained a steady level, with additional shipments towards the end of the year. The company anticipates growing significantly along with AI data centers and various packaging capabilities required over time.

A：The gains in market share with leading edge customers are coming from various segments such as high bandwidth memory, where the company is number one, driving innovation in input/output (IO) with its leadership products and foundry logic. Additionally, the company has a strong position in capacitor scaling, a strong etch share in DRAM, and has achieved patterning share gains.

A：The company expects the DRAM business to strengthen and experience healthy growth across customer investments for DRAM in 2026. This growth is attributed to not shipping to Chinese customers, who have been a factor in past years, and instead focusing on international markets.

A：The company assesses its performance in the first few quarters of fiscal year 2025 as not being on a level playing field with its US peers, who are recording extremely strong double-digit growth. The company highlights that its performance includes both leading edge and ICASSP customers, recording record revenue in Taiwan and Korea.

A：The forecast for the second half of 2026 is that leading edge logic will be the strongest area of growth, followed by DRAM. Growth in both areas is expected to be strong, with timing depending on fabrication timing.

A：Gross margins are expected to increase in the back half of 2026 due to better cost absorption resulting from volume increases. The company is also working on pricing process improvements and cost reductions, which will continue into 2026. The improvements in pricing processes were the main driver of the increase in gross margins in 2025.