Applied Materials (AMAT) Bernstein 42nd Annual Strategic Decisions Conference summary

Industry trends and AI-driven demand

• AI is driving a multi-year growth cycle in semiconductor equipment, with demand for chips, wafers, and tools at unprecedented levels, especially in leading-edge foundry logic, DRAM, and advanced packaging, which together account for over 80% of incremental WFE spending projected for 2026 and beyond.

• AI is also transforming internal operations, accelerating product development, and increasing service engineering productivity, with new multi-billion dollar products expected to launch faster using AI technologies.

• Agentic AI and physical AI are expected to further increase computing demand, with data center wafer starts projected to surpass smartphone wafer starts next year.

Segment-specific innovations and growth

• In foundry logic, innovations like gate-all-around, backside power, and stacking transistors (CFET) are increasing revenue per wafer start by about 30%, with Applied capturing over 50% of available markets as these architectures are adopted.

• DRAM demand is surging due to AI, with HBM DRAM requiring up to four times more wafers than standard DRAM; Applied has gained 10 points of market share in DRAM over a decade and is positioned for further gains as new architectures like 4F² and 3D DRAM are adopted.

• Advanced packaging is experiencing over 50% growth this year, driven by the need for higher I/O density and larger package sizes for AI, with Applied leading in enabling new packaging architectures and deep customer engagements.

Customer collaboration and technology roadmap

• The EPIC Center enables high-velocity co-innovation with major industry partners, accelerating time to market for new chip and packaging architectures, with projects spanning up to 10 years into the future.

• Applied's deep integration with customer R&D provides unmatched visibility into technology roadmaps and allows for optimized R&D investments and secure, parallel innovation.