Applied Materials (AMAT) The Citigroup Global TMT Conference 2024 summary

Industry trends and market dynamics

• Strong momentum in AI and data center markets, with high-bandwidth memory (HBM) and advanced packaging driving growth.

• Leading-edge business is accelerating, with significant CapEx investments in AI data centers and increased forecasts from major companies.

• ICAPS (IoT, communications, auto, analog, sensors) segment remains robust, led by China but with global contributions.

• The company invests in both leading-edge and mature technologies, tying together AI/cloud and IoT ecosystems.

• Semiconductor industry expected to grow at 3x GDP, with the company aiming to outpace this through targeted investments.

Technology inflections and innovation

• Materials engineering is critical for next-gen devices, with R&D focused on atomic-level construction and new device types.

• Advanced packaging, especially HBM, is a major growth driver, with sales expected to double in the next several years.

• Hybrid bonding is anticipated to ramp up over the next 2–3 years, enabling higher chip density.

• Gate-all-around and backside power technologies are moving from pilot to high-volume manufacturing, with equipment orders accelerating.

• Collaboration with customers and co-development of solutions are central to the R&D strategy for future technology nodes.

Business performance and regional insights

• ICAPS accounts for over 50% of logic business currently, with strong growth in multiple regions, not just China.

• China represents about 30% of total business, mainly in mature technologies, aligning with end-market consumption.

• NAND market is currently slow due to high productivity, but long-term demand for storage remains positive.

• Display market is poised for growth with the OLED wave in PCs, notebooks, and phones, and the business is well positioned for recovery.