Applied Materials (AMAT) BofA Securities 2024 Global Technology Conference summary

Strategic and operational focus

• Governments worldwide are incentivizing local semiconductor production, driving new demand and geographic shifts in manufacturing.

• Generative AI and advanced packaging are fueling excitement and investment in leading-edge process technology and memory.

• Focus on curating a broad equipment portfolio to address technology inflections 3–7 years ahead, collaborating closely with customers.

• Emphasis on integrating tool types to create unique solutions for advanced nodes, such as Gate-All-Around and Backside Power.

• Expectation for semiconductor growth to outpace GDP, with services business projected to outgrow equipment sales.

Industry trends and geographic demand

• Reshoring incentives are influencing where equipment is installed, but not creating incremental demand; a small efficiency loss may drive 3–5% more equipment needs.

• China remains a strong, long-term market, especially in mature nodes (ICAPS), with over 30 factories ramping, despite a near-term DRAM shipment decline.

• ICAPS demand is somewhat detached from short-term end-market weakness, as capacity planning spans several years.

• Utilization rates in ICAPS are below optimal, indicating some digestion is needed before returning to steady capacity growth.

Technology and product innovation

• AI is driving rapid growth in high-bandwidth memory (HBM) equipment, with HBM-related sales expected to grow 6x this year.

• Leading-edge factories are fully loaded, with new process technologies like Gate-All-Around ramping up.

• Advanced packaging business is projected at $1.7B this year, including $600M from HBM packaging, and is expected to double in the next few years.

• Sculpta pattern shaping tool is gaining traction, with a $500M run rate and $200M in expected revenue this year.