A：The main factors contributing to Applied Materials' revenue growth include the rapid global buildout of AI infrastructure and the company's leadership positions in high-value technologies for AI computing.

A：According to Gary Dickerson, AI is reshaping the semiconductor industry by accelerating technology roadmaps, optimizing existing production capacity, and helping to ramp new fabs. It is also enabling the realization of the value of advanced technology and creating highly differentiated products.

A：The technology areas in the semiconductor industry expected to grow significantly due to AI include leading edge foundry, logic, DRAM, and advanced packaging, which are anticipated to account for around 80% of wafer fabrication equipment growth in 2026.

A：Recent product announcements by Applied Materials include the Centura Prime epitaxy system, Dakota VM next generation plating system, optic quad CMP for advanced packaging, and two new e-beam systems for advanced packaging.

A：The new output innovation products in semiconductor manufacturing are significant because they increase the number of wafers that can be processed per square foot of clean room space, with one example being a new epitaxy system that uses 20% less clean room space than earlier products.

A：The AI strategy and the Epic Center are contributing to value creation for Applied Materials by enabling earlier access to new product innovations and providing a platform for co-creation with customers and partners. This is expected to improve yields and ramp times, create new service solutions, and drive revenue and profit growth.

A：The demand environment for advanced semiconductors and semiconductor equipment is continuing to strengthen as customers find new ways to address clean room space constraints. This has led to higher demand for tool deliveries in 2026.

A：The company is accelerating new product development, increasing revenue, and generating efficiencies in support functions. Gna as a percentage of operating expenses has declined to its lowest historical level. Direct customers are operating at full capacity with rising utilization levels across the board, including in ICASSPs due to strong demand in AI-related markets. Consequently, customers have announced over Ed new fab projects just this quarter and have provided the company with extended visibility in their communications.

A：The company has nearly doubled its manufacturing space over the past several years based on long-term demand signals from customers. It has officially opened a new manufacturing center in Singapore and is hiring and training new teams for further capacity expansion. The company plans to double its quarterly system output from current levels by 2028 and added over 1500 people in worldwide manufacturing and Ags customer support this quarter.

A：The company is investing in research and development (R&D) to make better equipment, chips, and systems for AI, as well as improving fab economics. These investments enable the company to be a valuable partner to its customers and share in the value created. It has increased R&D significantly, including advanced packaging innovations, and has been bolstered by recent small acquisitions. The company's systematic approach to value-based pricing has led to strong revenue growth and improved gross margins.

A：For the upcoming quarter, the company expects semiconductor systems revenue of around $7.9 billion, up Ed year over year; Ags revenue of about Ly ly billion dollars, also up Ed year over year; and other revenue of around $5 million, which is primarily display revenue. The company expects non-GAAP gross margin to be approximately vector, vector qi and up ed basis points year over year, and non-GAAP operating expenses of around Ed Ly billion dollars.

A：The company expects a very significant increase in DRAM revenues in the second half of the calendar year as customers expand clean room capacity. The company has a strong technology differentiation in leading-edge foundry logic and is anticipating continued strong performance in the second half of the calendar year and a strong record year in 2027.

A：The race to bring new AI architectures to market is an intense competition among customers, where each one is focused on being the first to market with these new technologies. This pursuit is aligned with optimizing yield and output to increase the value of products and services, which is resulting in greater than 20% service growth and strong revenue growth in the company's PDC business. The company is also seeing a robust pipeline of new products with higher margins, which is anticipated to provide a tailwind in the future.

A：The company is enhancing visibility by having direct access to the roadmaps of large customers, which provides a perspective on the next few years. Detailed information about future requirements has been obtained from customers and is being shared with the supply chain. To cope with the changing environment, longer lead times are being negotiated, and new charges such as cancellation and expedite charges have been implemented. These changes have substantially increased visibility compared to prior periods.

A：The supply and demand for DRAM is currently imbalanced, with high demand continuing to rise as AI expands from training to inference. This situation is expected to result in a very strong year of growth for the company, with the second half weighted more heavily. The company has significantly increased its share in the DRAM market over recent years and anticipates strong growth in the DRAM business in 2027. As a market leader in various segments of the DRAM market, including high-performance CMOS periphery logic transistors and materials deposition for wiring and patterning, the company is well-positioned to gain share and drive growth in this segment.

A：Gross margins have been aligned across companies despite slight variances, with the company discussed having slightly higher margins. While the exact reason for this alignment isn't provided, it is noted that the company has made significant progress in advancing gross margins through value pricing and strengthening its portfolio. The company expects to continue to improve gross margins over time, with the potential for growth impacted by the mix of businesses like the display business, which has a different effect on corporate gross margins. The outlook suggests a continuation of improving gross margins and growing value over time.

A：The guidance for flat gross margins despite a significant revenue increase is attributed to ramp headwinds. The company is experiencing growth in customer service engineers and has to invest in resources for the semiconductor business. Although there is an advantage in segment mix due to the strong growth in the semiconductor business, the recent investments in resources are causing temporary ramp costs. The company feels confident about maintaining a flat margin at the company level for the upcoming quarter and expects to continue growing margins over time.

A：The duration of ramp costs is expected to vary, but it is stated that the company will continue to add employees over the next few quarters. The headwind related to these costs is expected to decrease as revenue continues to grow. The pace of improvement is described as slow but continuous, with the expectation that gross margins will improve over the long term. Sequential improvements are expected, with a focus on further growth and improvement in future quarters.

A：The company expects to outgrow industry projections and is committed to growing its systems business significantly. Growth was initially guided at greater than Ed, then raised to greater than 30% due to cleanroom project additions, and is now higher than previously indicated. While the company is not providing a specific number for growth in the upcoming quarter, it is clear that momentum is building. The mention of manufacturing capacity doubling indicates an expansion in capability to support a range of output requirements in 2028 and possibly beyond, without directly forecasting revenue for that year.

A：Customers are increasingly interested in scheduled delivery and hitting schedules, collaborating on the specificity of orders, and seeking higher levels of visibility in the planning environment.

A：Technology discussions are significant as they pertain to a customer's detailed visibility for upcoming quarters and their strong multi-year demand. These discussions involve the customer's CEO and include an expectation for the company to be ready to support this demand.

A：The company's portfolio is important because it is broad, connected, and unique, providing technologies that enable new transistors, wiring, DRams, and packaging. This portfolio is necessary for bringing innovations to market and takes time to develop, making the company unique in its technological capabilities.

A：The company expects its ICAPs business to be flat to slightly up outside of China, and while China is a big part of ICAPs growth this year and next, it hopes to return to growth even in the absence of digestion from the equipment side.

A：The company's operating margins in the Ags business have been trending positively, with incremental operating margins well above 40% and strong growth expected as Ags revenues scale and advanced services become a larger part of the mix.

A：The company views the growth of its NAND business as strong for the current year, with a positive dynamic linked to AI and leading edge logic, DRAM, and advanced packaging being the fast growers in the next year.

A：The company does not distinguish between different areas in terms of growth potential as they all benefit from the system level provided by AI. Growth is expected across leading logic, DRAM, advanced packaging, and ICAPs next year.

A：Revenue growth is expected to be governed by cleanroom availability, with incremental clean room space added next year and more significant availability in the out years. The company anticipates that availability of clean room at a high level will determine shipping capacity next year.

A：The key factors driving growth in the semiconductor market include the strong multi-year growth driver related to compute demand going forward and the company's leading position in the most valuable parts of the market, such as leading edge foundry, logic, and advanced packaging. The company is positioned to gain share in those segments.

A：The company has a number of great drivers for top line growth that will enable it to outperform in the coming years and is optimistic about bottom line growth. It will provide more details at the October investor meeting.

A：The company's unique connected portfolio, along with new chip and packaging architectures, is creating tremendous value for customers, which puts the company in a good position to continue driving margins higher.

A：In the NAND sector, the company expects a continued decline in wafer starts and a focus on upgrades to increase layers. New projects in China will be a difference point, but overall, customers will need to upgrade to maintain capacity. This dynamic is expected to continue for the next few years, impacting the company's business with a focus on upgrade projects.

A：Panel level packaging and hybrid bonding are significant opportunities for the company, with deep co-innovation relationships with customers focused on performance and power improvements. The company has a strong portfolio of technologies and acquisitions in packaging, which will drive growth over many years. Additionally, hybrid bonding is a priority for all customers aiming to improve performance and power, presenting a meaningful growth driver for the company.

A：The script week quarter typically results in close to a ratable performance on the services side and not as much on the equipment side. Planning is done quarterly on the equipment side, and spending tends to occur within the quarter. This historical pattern is expected to follow in the current script week quarter.