Applied Materials, Inc. Overview
Applied Materials is the world's largest maker of semiconductor process equipment and the second-largest semiconductor equipment company by revenue after ASML. It sells the deposition, etch, implant, thermal, planarisation, epitaxy, eBeam metrology and inspection, and advanced-packaging systems that build transistors, wiring and stacked chips. Its strategy is "materials engineering": new materials and atomic-scale process control are now the main levers for chip performance and power efficiency as lithography-led shrinking slows. FY2025 revenue was a record $28.37 billion. Fiscal 2026 is guided to about $34.3 billion as leading-edge foundry-logic, DRAM/high-bandwidth memory (HBM) and advanced packaging ramp for AI computing. A $6.4 billion services business sits on a growing installed base and adds recurring revenue to an otherwise cyclical capital-equipment model. Scale is the company's edge: a broad portfolio, a $3.6 billion R&D budget, more than 23,500 patents and the $5 billion EPIC Center for collaborative R&D. Its main exposures are China export controls, customer concentration and the cyclicality of wafer-fab spending.
What the company does
Applied Materials designs, builds, sells and services the capital equipment chipmakers use to process silicon wafers. Its tools change the surface of a wafer atom by atom:
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They deposit conductive and insulating films (physical vapour deposition, chemical vapour deposition, atomic layer deposition, epitaxy, electroplating).
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They remove material selectively (etch, selective removal).
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They change electrical properties (ion implantation, rapid thermal processing).
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They flatten surfaces (chemical mechanical planarisation).
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They measure and inspect the results (eBeam metrology, defect review, optical inspection).
Beyond the wafer fab, the company serves advanced packaging (through-silicon vias, microbumps, hybrid bonding, panel-level packaging) and display manufacturing (OLED and LCD equipment). Its services business supplies spare parts, upgrades, maintenance agreements, refurbished legacy tools and factory-automation software.
The company's own description
In its corporate communications and filings, Applied describes itself as the leader in materials engineering solutions that underpin virtually every new semiconductor and advanced display in the world. It says its technology is essential to advancing AI and to commercialising next-generation chips. The FY2025 Form 10-K describes the business as providing manufacturing equipment, services and software to the semiconductor, display and related industries. Its strategic priorities are:
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solving customer challenges at major technology inflections;
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expanding the markets it can serve;
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growing services.
Independent characterisation
Applied is the broadest-line supplier in front-end wafer processing. Its strength lies in "unit process" leadership in deposition, especially PVD, epitaxy and CVD, where it has long been the market leader. It adds "co-optimised" combinations of steps, including integrated vacuum platforms that link several process steps without breaking vacuum. ASML's business rests on a near-monopoly in lithography. Applied's competitive moat instead rests on breadth of portfolio, process-integration know-how and depth of customer engagement. Those matter most at device inflections: gate-all-around (GAA) transistors, backside power delivery, new interconnect metals such as molybdenum, 3D DRAM and HBM stacking, and hybrid bonding.
The business is highly cyclical at the systems level, but services now account for about a fifth to a quarter of revenue. Services revenue grows with the installed base, which management says expands 5–10% a year, and increasingly comes through multi-year subscription-style agreements.
Business and revenue model
| Revenue stream | FY2025 revenue (USD Mn) | Share of total | Nature |
|---|---|---|---|
| Semiconductor Systems (equipment) | 20,798 | 73.3% | Product sales recognised at a point in time; capex-cycle driven |
| Applied Global Services (services, spares, upgrades, software) | 6,385 | 22.5% | Mix of point-in-time (spares, upgrades) and over-time (service agreements); largely recurring |
| Corporate and Other (mainly Display equipment) | 1,185 | 4.2% | Product sales; display capex driven |
| Total | 28,368 | 100% | — |
Semiconductor Systems (equipment): FY2025 revenue (USD M): 20,798; Share of total: 73.3%; Nature: Product sales recognised at a point in time; capex-cycle driven
- Applied Global Services (services, spares, upgrades, software) — FY2025 revenue (USD M): 6,385; Share of total: 22.5%; Nature: Mix of point-in-time (spares, upgrades) and over-time (service agreements); largely recurring
Corporate and Other (mainly Display equipment): FY2025 revenue (USD M): 1,185; Share of total: 4.2%; Nature: Product sales; display capex driven
- **Total — FY2025 revenue (USD M): 28,368; Share of total: 100%
Source: Q4 FY2025 results release and FY2025 Form 10-K: Licensing is not a material revenue line. Software is sold mainly inside AGS, through factory automation and the AIx analytics platform, and is not reported separately. In 2025, management said about two-thirds of AGS core services revenue came from long-term subscription-style agreements, and that about 90% of AGS revenue was recurring in nature.
Value-chain position
Applied sits upstream of chip manufacturers (foundries, logic integrated device manufacturers (IDMs), DRAM and NAND makers) and outsourced assembly and test providers. It sits downstream of a deep supply chain of precision component, sub-system, vacuum, RF power, robotics and specialty-materials suppliers. It is a core vendor for every leading-edge fab project worldwide.
Customer types
| Customer group | Examples (by public partnership or disclosure) | Relevance |
|---|---|---|
| Leading-edge foundry and logic | TSMC, Samsung Foundry, Intel | Largest end-market: 67% of FY2025 Semiconductor Systems revenue |
| DRAM / HBM | Samsung, SK hynix, Micron | 26% of FY2025 Semiconductor Systems revenue; record DRAM revenue in Q1 FY2026 |
| NAND flash | Samsung, SK hynix, Micron, KIOXIA | 7% of FY2025 Semiconductor Systems revenue |
| Mature-node / ICAPS (IoT, communications, auto, power, sensors) | Chinese and global specialty fabs | Large share of China revenue |
| Advanced packaging | Foundries, memory makers, OSATs | Fast-growing; widened by the NEXX purchase and the Besi partnership |
| Display makers | OLED and LCD panel producers | Reported in Corporate and Other / Other |
Leading-edge foundry and logic: Examples (by public partnership or disclosure): TSMC, Samsung Foundry, Intel; Relevance: Largest end-market: 67% of FY2025 Semiconductor Systems revenue
DRAM / HBM: Examples (by public partnership or disclosure): Samsung, SK hynix, Micron; Relevance: 26% of FY2025 Semiconductor Systems revenue; record DRAM revenue in Q1 FY2026
NAND flash: Examples (by public partnership or disclosure): Samsung, SK hynix, Micron, KIOXIA; Relevance: 7% of FY2025 Semiconductor Systems revenue
- Mature-node / ICAPS (IoT, communications, auto, power, sensors) — Examples (by public partnership or disclosure): Chinese and global specialty fabs; Relevance: Large share of China revenue
Advanced packaging: Examples (by public partnership or disclosure): Foundries, memory makers, OSATs; Relevance: Fast-growing; widened by the NEXX purchase and the Besi partnership
Display makers: Examples (by public partnership or disclosure): OLED and LCD panel producers; Relevance: Reported in Corporate and Other / Other
Customer concentration. Two customers each accounted for more than 10% of FY2025 net revenue, at about 19% and 15% (FY2025 Form 10-K). In FY2023, Samsung Electronics accounted for 15% of net sales (FY2023 annual report).
Backlog.** Total backlog at 26 October 2025 was $15,002 million: Semiconductor Systems $7,105 million, AGS $7,141 million and Corporate and Other $756 million. About 31% was not expected to be filled within 12 months.
End-markets
AI data-centre computing is now the dominant driver. The company's 2026 investor presentation projects data-centre wafer starts overtaking mobile as the largest share of leading-edge foundry-logic starts in 2026 (for DRAM this happened around 2023). By 2030 it projects data-centre shares of about 50% of leading-edge logic starts and about two-thirds of DRAM starts. Smartphones, PCs, automotive, industrial and IoT make up the rest. Display end-markets are TVs, smartphones, tablets, laptops and IT panels moving to OLED.
Strategy
Stated strategy
Applied's strategy has three parts, consistent across the FY2025 Form 10-K, the 2026 proxy statement and the October 2026 investor presentation:
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Lead the highest-value technology inflections (leading-edge foundry-logic, DRAM/HBM and advanced packaging) through materials engineering.
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Widen its served markets by broadening the portfolio and "co-optimising" combinations of process steps.
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Grow the recurring services business on the expanding installed base.
The company frames AI as the core demand driver. Its thesis is that energy-efficient computing needs new transistor architectures (GAA, backside power), new wiring materials (molybdenum and new low-resistance metals), new memory (HBM, 3D DRAM) and 3D heterogeneous integration (hybrid bonding, panel packaging). All of these are materials-engineering problems.
Management expects leading-edge foundry-logic, DRAM and advanced packaging to account for about 75% of WFE growth from 2025 to 2030. It says Applied holds number-one process-equipment positions in all three.
Strategic initiatives (last 24 months)
| Initiative | Timing | Description and targets |
|---|---|---|
| EPIC Center | Announced 2023; opened 12 Oct 2026 | About $5 billion collaborative R&D hub with more than 180,000 sq ft of cleanroom. The aim is to cut several years from the path between research and volume production. Founding partners: Samsung, SK hynix, TSMC, Intel, Micron, Broadcom, Advantest, SCREEN, KIOXIA and Besi. Academic partners: ASU, RPI, Stanford and UC Berkeley. 11 R&D engagements were in place by August 2026. |
| Manufacturing and supply-chain scale-up | FY2025–FY2026 | Tampines Campus (June 2026); higher build plans, inventory and logistics capacity; more investment for demand projected through the end of the decade |
| Hybrid bonding and packaging build-out | Apr 2025 – Oct 2026 | 9% Besi stake (April 2025), rising to about 20% (agreed October 2026); Kinex integrated bonder; NEXX acquisition (June 2026). Management says hybrid bonding doubles Applied's addressable market compared with microbump and TSV approaches. |
| Product-launch cadence | Calendar 2026 | More than a dozen new products in 2026, including GAA-focused deposition (Precision Selective Nitride, Trillium ALD), six DRAM and packaging systems in Q3 FY2026, and new eBeam tools |
| Services growth | Through 2030 | AGS above $12 billion by calendar 2030; about 20% more service revenue per tool; AI-enabled service platform (AIx) |
| Cost and productivity | Oct 2025 | Workforce reduced by about 4%; $181 million restructuring charge |
| Sustainability | Ongoing | Net Zero 2040 Playbook; 100% renewable electricity globally by 2030; science-based Scope 1, 2 and 3 targets; "3x30" product-efficiency ambition |
| New adjacencies | 2,026 | Long-term joint development agreement with EssilorLuxottica on smart-eyewear optics; SENZ display platform |
EPIC Center: Timing: Announced 2023; opened 12 Oct 2026; Description and targets: About $5 billion collaborative R&D hub with more than 180,000 sq ft of cleanroom. The aim is to cut several years from the path between research and volume production. Founding partners: Samsung, SK hynix, TSMC, Intel, Micron, Broadcom, Advantest, SCREEN, KIOXIA and Besi. Academic partners: ASU, RPI, Stanford and UC Berkeley. 11 R&D engagements were in place by August 2026.
Manufacturing and supply-chain scale-up: Timing: FY2025–FY2026; Description and targets: Tampines Campus (June 2026); higher build plans, inventory and logistics capacity; more investment for demand projected through the end of the decade
Hybrid bonding and packaging build-out: Timing: Apr 2025 – Oct 2026; Description and targets: 9% Besi stake (April 2025), rising to about 20% (agreed October 2026); Kinex integrated bonder; NEXX acquisition (June 2026). Management says hybrid bonding doubles Applied's addressable market compared with microbump and TSV approaches.
Product-launch cadence: Timing: Calendar 2026; Description and targets: More than a dozen new products in 2026, including GAA-focused deposition (Precision Selective Nitride, Trillium ALD), six DRAM and packaging systems in Q3 FY2026, and new eBeam tools
Services growth: Timing: Through 2030; Description and targets: AGS above $12 billion by calendar 2030; about 20% more service revenue per tool; AI-enabled service platform (AIx)
Cost and productivity: Timing: Oct 2025; Description and targets: Workforce reduced by about 4%; $181 million restructuring charge
Sustainability: Timing: Ongoing; Description and targets: Net Zero 2040 Playbook; 100% renewable electricity globally by 2030; science-based Scope 1, 2 and 3 targets; "3x30" product-efficiency ambition
New adjacencies: Timing: 2026; Description and targets: Long-term joint development agreement with EssilorLuxottica on smart-eyewear optics; SENZ display platform
Medium-term targets (October 2026 investor presentation; calendar 2030)
| Target | Calendar 2025 baseline | Calendar 2030 target |
|---|---|---|
| WFE market share | 18.3% | More than 2 percentage points higher |
| Non-GAAP gross margin | About 50% (current run rate) | About 54% |
| Non-GAAP operating margin | About 30% | About 40% |
| Services (AGS) revenue | $6.4 billion (FY2025) | More than $12 billion |
| Capital return | — | 80–100% of free cash flow |
| Non-GAAP tax rate assumption | — | About 15% |
WFE market share: Calendar 2025 baseline: 18.3%; Calendar 2030 target: More than 2 percentage points higher
Non-GAAP gross margin: Calendar 2025 baseline: About 50% (current run rate); Calendar 2030 target: About 54%
Non-GAAP operating margin: Calendar 2025 baseline: About 30%; Calendar 2030 target: About 40%
Services (AGS) revenue: Calendar 2025 baseline: $6.4 billion (FY2025); Calendar 2030 target: More than $12 billion
Capital return: Calendar 2025 baseline: n/a; Calendar 2030 target: 80–100% of free cash flow
Non-GAAP tax rate assumption: Calendar 2025 baseline: n/a; Calendar 2030 target: About 15%
The targets assume current export policies. Management did not give a 2030 revenue or WFE-spending forecast. It expects WFE spending to grow faster from 2025 to 2030 than it did over the past decade. In the decade to fiscal 2026, revenue grew at about 12% a year to an expected $34.3 billion, and gross margin rose about 680 basis points to about 50%.
Near-term guidance
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Semiconductor equipment revenue growth for calendar 2026 of more than 20% (February), raised to more than 30% (May) and raised again in August.
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eBeam revenue of about $2 billion in calendar 2026.
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Services growth above 20% in calendar 2026.
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"Another strong growth year" in calendar 2027.
Products & Services
Semiconductor Systems — deposition
| Product / platform | Description and key capabilities | Target customer / application | Introduced / latest version |
|---|---|---|---|
| Endura PVD platform (incl. Endura Clover MRAM PVD, Endura Copper Barrier Seed, Endura Ioniq PVD) | Multi-chamber, integrated vacuum PVD platform for metal and barrier films; Clover deposits the multilayer stacks used in embedded MRAM | Logic interconnect, contacts, memory | Endura family since 1990; Clover MRAM version launched 2019 |
| Producer CVD/PECVD platform | High-throughput twin-chamber platform for dielectric films, hardmasks and gapfill | Logic, DRAM, NAND | Producer platform introduced 1998; continuously refreshed |
| Precision Selective Nitride PECVD | Deposits nitride selectively to protect shallow-trench isolation, cutting parasitic capacitance in GAA devices | Leading-edge GAA logic | Launched 2026 |
| Producer Avila 2 PECVD | Stress-balanced dielectric films around through-silicon vias to stabilise ultra-thin DRAM dies | 12-high, 16-high and taller HBM stacks | Launched 2026 |
| Trillium ALD | Wraps silicon nanosheets with complex metal-gate stacks at atomic precision | GAA logic | Launched 2026 |
| Centris Spectral SiN ALD | Silicon-nitride ALD for advanced device films | Logic and memory | Launched 2026 |
| Olympia ALD | Spatial ALD for conformal films at low temperature | Logic, memory patterning | Established platform |
| Centura Epi / Centura Prime Epi | Epitaxial growth. Prime Epi selectively grows doped silicon-germanium and silicon-phosphorus in source/drain regions for higher drive current. | Logic and DRAM periphery, HBM | Centura since 1992; Prime Epi enhanced in 2026 |
| Raider ECD | Electrochemical copper deposition for interconnect and packaging | Logic interconnect, packaging | From the Semitool acquisition (2009) |
| Nokota VMax 2 ECD | Copper plating for TSV fill and fine-pitch microbumps; Adaptive Pattern Tuning shapes the electric field to correct layout-driven non-uniformity | Advanced packaging, 3D stacking | Launched 2026 |
| NEXX large-area deposition tools | Panel- and large-substrate electroplating and PVD for advanced packaging | Panel-level packaging, large-body AI accelerators | Acquired June 2026 |
| Picosun ALD | Batch and single-wafer ALD for specialty devices | Power, RF, MEMS, optics, More-than-Moore | Acquired 2022 |
Semiconductor Systems — etch, patterning and planarisation
| Product / platform | Description and key capabilities | Target customer / application | Introduced / latest version |
|---|---|---|---|
| Centris Sym3 etch family | Conductor etch with high-conductance chamber design that reduces defect redeposition | Logic, DRAM, NAND patterning | Sym3 launched 2015; successive generations since |
| Producer Selectra (incl. Selectra Mo Etch) | Highly selective, isotropic material removal at the atomic level; the Mo version is for molybdenum wiring | GAA nanosheet release, advanced interconnect | Selectra launched 2016; Mo version 2026 |
| Centura Sculpta | Pattern-shaping system that elongates features after lithography, reducing EUV double-patterning steps | Leading-edge logic | Launched 2023 |
| Reflexion CMP family | Chemical mechanical planarisation for front-end and interconnect | All device types | Established platform |
| Opta Quad CMP | Real-time in-situ monitoring and dynamic control of within-wafer uniformity and total thickness variation | Hybrid bonding, advanced packaging | Launched 2026 |
Semiconductor Systems — implant and thermal
| Product / platform | Description and key capabilities | Target customer / application | Introduced / latest version |
|---|---|---|---|
| VIISta ion implant family | High-current, medium-current and high-energy implanters (Varian heritage) | Logic, memory, power, image sensors | From the Varian acquisition (2011); current generations in production |
| Vantage RTP family | Rapid thermal processing and laser/millisecond anneal | Logic and memory activation and anneal | Established platform |
Semiconductor Systems — process control (eBeam and optical)
| Product / platform | Description and key capabilities | Target customer / application | Introduced / latest version |
|---|---|---|---|
| VeritySEM CD-SEM (incl. VeritySEM 10, VeritySEM 7AP) | Critical-dimension eBeam metrology. The 7AP measures thick, warped, mixed-material substrates at sub-10nm sensitivity. | Logic and DRAM; HBM and chiplet packaging (7AP) | VeritySEM 10 launched 2022; 7AP launched 2026 |
| PROVision eBeam metrology | High-resolution, high-speed eBeam measurement on device | Leading-edge logic and DRAM | Established; current generation in production |
| SEMVision defect review (incl. SEMVision G7AP) | eBeam defect review and classification; the AP version is for packaging | All segments | G7AP launched 2026 |
| Enlight optical inspection | Brightfield optical wafer inspection | Logic and memory | Launched 2018 |
Management expects the eBeam portfolio to generate about $2 billion of revenue in calendar 2026 (October 2026 investor presentation).
Semiconductor Systems — advanced packaging and heterogeneous integration
| Product / platform | Description and key capabilities | Target customer / application | Introduced / latest version |
|---|---|---|---|
| Kinex integrated die-to-wafer hybrid bonding system (with Besi) | Combines Applied's front-end wafer preparation, clean, activation and metrology with Besi's precision die placement in one tool | Logic-on-logic and memory stacking; HBM4/4e roadmaps | Launched 2025 |
| Hybrid bonding pre- and post-bond portfolio | Deposition, CMP (Opta Quad), clean, metrology and inspection. Management says Applied addresses about 80% of hybrid-bonding steps; it does not make the bonder itself. | Foundry, memory, OSAT | Ongoing |
| Panel-level packaging (with NEXX) | Large-area deposition and plating for panel substrates | Large-body AI accelerators | Expanded 2026 |
Applied Global Services
| Offering | Description | Pricing model |
|---|---|---|
| Spare parts | Consumable and replacement parts for an installed base management expects to grow from about 37,000 connected chambers to about 90,000 by 2030 | Transactional |
| Long-term service agreements | Uptime, output and performance guarantees, increasingly sold as subscriptions | Multi-year subscription-style contracts |
| Upgrades | Retrofits that extend tool capability and life | Transactional |
| AIx (Actionable Insight Accelerator) | Process-data analytics and machine learning to speed process development and control in production | Software / service subscription |
| SmartFactory and factory automation software | Fab scheduling, dispatching, equipment integration and yield software | Software licences and maintenance |
| 200mm equipment (moved to Semiconductor Systems in FY2026) | New and remanufactured 200mm systems for mature-node fabs | Equipment sales |
Management targets AGS revenue above $12 billion by calendar 2030, a mid-teens annual growth rate from $6.4 billion in FY2025. It also targets about 20% more service revenue per tool between 2025 and 2030.
Display (Other)
| Offering | Description | Target customer |
|---|---|---|
| AKT PECVD and PVD | Large-area thin-film deposition for TFT backplanes | LCD and OLED panel makers |
| Electron-beam test and repair | Array testing on large glass substrates | Panel makers |
| MAX OLED | Display-manufacturing solution aimed at larger, higher-yield OLED panels for IT devices | OLED panel makers |
| SENZ display platform | New display manufacturing platform | OLED panel makers |
Pricing for systems is quoted per tool and is not published. Applied describes its approach as value-based pricing tied to customer performance and productivity gains.
Financial Narrative
Income statement
Sources: Forms 10-K FY2021–FY2025; FY2025 annual report statement of stockholders' equity (dividends declared FY2023–FY2025); quarterly results releases (non-GAAP EPS).
Margins and growth
The revenue CAGR from FY2021 to FY2025 is 5.3%. Fiscal 2026 guidance implies an acceleration to about 21%.
Commentary. The FY2021–FY2025 period falls into two phases:
FY2021–FY2022: a post-pandemic boom. FY2021 revenue rose 34% in a 53-week year.
FY2023–FY2025: a plateau. Mature-node and China spending offset weak memory in 2023. Leading-edge DRAM and logic then took over as China normalised in 2025.
Gross margin rose by more than two points from the FY2022 low of 46.5% to 48.7% in FY2025, despite rising tariff and supply-chain costs. The drivers were value-based pricing, product mix and cost programmes. Operating margin barely moved, because R&D grew faster than revenue (from $2.49 billion to $3.57 billion).
FY2025 net income fell 2.5% even though revenue and operating income hit records. The effective tax rate jumped to 24.5% after a full valuation allowance was recorded against the corporate alternative minimum tax (CAMT) credit deferred tax asset. Global minimum tax rules also began to apply. On a non-GAAP basis, FY2025 EPS rose 9% to a record $9.42. Interest and other income more than doubled to $1.25 billion in FY2025, mainly from investment income and gains on strategic equity holdings.
Fiscal 2026 inflection. Quarterly revenue rose from $7.01 billion in Q1 FY2026 to $7.91 billion in Q2 and $9.12 billion in Q3. Q3 was the largest quarter-on-quarter increase in the company's history. Non-GAAP gross margin reached 50.4% in Q3, the 13th consecutive quarter of year-on-year gross-margin expansion and the highest level since fiscal 2000. GAAP EPS was above non-GAAP EPS in Q1 and Q2, because items excluded from non-GAAP results (chiefly gains on strategic investments) outweighed the $252.5 million export-compliance accrual taken in Q1.
Guidance for Q4 FY2026 is revenue of $10.25 billion ± $0.5 billion and non-GAAP EPS of $4.02 ± $0.20. That implies fiscal 2026 revenue of about $34.3 billion (+21%) and non-GAAP EPS of about $12.76 (+35%). Trailing-twelve-month revenue to Q3 FY2026 was $30.84 billion, and trailing GAAP EPS was $11.60.
Balance sheet (fiscal year end)
At the end of Q3 FY2026 (26 July 2026), the balance sheet showed:
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cash and equivalents of $7,037 million, short-term investments of $2,196 million and long-term investments of $5,268 million (total cash and investments of about $14.5 billion);
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short-term debt of $1,299 million, after the 2027 notes became current, and long-term debt of $5,245 million;
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equity of $25,626 million and total assets of $43,522 million.
Receivables rose to $7,691 million and inventories to $6,564 million ahead of record Q4 shipments.
Cash flow
Commentary.
Capex: almost doubled in FY2025 to $2.26 billion, funding the EPIC Center and manufacturing expansion including Singapore. This was the main reason free cash flow fell 24% to $5.70 billion despite record revenue.
Fiscal 2026 to date: nine-month operating cash flow was $5.57 billion, capex $1.99 billion and non-GAAP free cash flow $3.58 billion.
Buybacks: slowed sharply in fiscal 2026 ($1.18 billion in nine months, against $4.04 billion a year earlier). The company prioritised inventory, capacity and the Besi investment.
Repurchase authorisation remaining: about $14.0 billion at FY2025 year end and $12.8 billion at the end of Q3 FY2026.
Ratios
The cash conversion cycle was about 86 days in FY2024 and 81 days in FY2025, measuring payables as accounts payable plus accrued expenses.
Returns have come down from their FY2022 peak for three reasons:
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equity has grown faster than profit, because the company holds a large investment portfolio;
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the FY2025 tax charge weighed on NOPAT;
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capex on the EPIC Center has not yet produced revenue.
ROE still above 30% and interest coverage of about 30x show a high-return, lightly levered business. Leverage is conservative: net cash in four of the five years and an A-category credit rating.
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Segment Overview
| Segment | What it contains | Representative products and services |
|---|---|---|
Semiconductor Systems | Capital equipment for materials engineering, patterning, transistor and interconnect fabrication, process control and advanced packaging | Endura PVD; Producer CVD/PECVD and Selectra etch; Centura epi and Sculpta; Centris Sym3 etch; Olympia and Trillium ALD; Reflexion and Opta CMP; Vantage RTP; VIISta implant; Raider and Nokota ECD; VeritySEM, PROVision, SEMVision eBeam; Enlight optical inspection |
Applied Global Services (AGS) | Services, spares, upgrades and factory automation software to raise fab output and yield | Spare parts; long-term service agreements; upgrades; AIx analytics; SmartFactory automation software |
Corporate and Other (FY2025) / Other (FY2026) | Display equipment business, plus unallocated costs, restructuring and other items | AKT PECVD; PVD; eBeam test and repair; MAX OLED; SENZ display platform |
Revenue by Segment and Segment Margins & Growth (%)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Semiconductor Systems revenue (USD Mn) | 19,698 | 19,911 | 20,798 |
Applied Global Services revenue (USD Mn) | 5,732 | 6,225 | 6,385 |
Corporate and Other revenue incl. Display (USD Mn) | 1,087 | 1,040 | 1,185 |
Total net revenue (USD Mn) | 26,517 | 27,176 | 28,368 |
Semiconductor Systems operating income (USD Mn) | 7,090 | 6,981 | 7,379 |
Applied Global Services operating income (USD Mn) | 1,657 | 1,812 | 1,792 |
Corporate and Other operating income (USD Mn) | -1,093 | -926 | -882 |
Semiconductor Systems operating margin (%) | 36.0 | 35.1 | 35.5 |
Applied Global Services operating margin (%) | 28.9 | 29.1 | 28.1 |
Semiconductor Systems revenue growth (%) | 4.8 | 1.1 | 4.5 |
Applied Global Services revenue growth (%) | 3.4 | 8.6 | 2.6 |
Semiconductor Systems share of revenue (%) | 74.3 | 73.3 | 73.3 |
Applied Global Services share of revenue (%) | 21.6 | 22.9 | 22.5 |
Corporate and Other share of revenue (%) | 4.1 | 3.8 | 4.2 |
Revenue by Segment (%)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Foundry, logic and other (% of segment revenue) | 77 | 68 | 67 |
DRAM (% of segment revenue) | 17 | 28 | 26 |
Flash memory (% of segment revenue) | 6 | 4 | 7 |
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View Subscription PlansRevenue by Segment
| Metric | 9M FY2025 | 9M FY2026 |
|---|---|---|
Semiconductor Systems revenue (USD Mn) | 16,562 | 18,146 |
Applied Global Services revenue (USD Mn) | 4,236 | 5,005 |
Other revenue (USD Mn) | 770 | 886 |
Total revenue (USD Mn) | 21,568 | 24,037 |
Semiconductor Systems operating income (USD Mn) | 5,479 | 6,176 |
Applied Global Services operating income (USD Mn) | 1,114 | 1,461 |
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View Subscription PlansIncome Statement and Margin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Net revenue (USD Mn) | 23,063 | 25,785 | 26,517 | 27,176 | 28,368 |
Cost of products sold (USD Mn) | 12,149 | 13,792 | 14,133 | 14,279 | 14,560 |
Gross profit (USD Mn) | 10,914 | 11,993 | 12,384 | 12,897 | 13,808 |
R&D and engineering (USD Mn) | 2,485 | 2,771 | 3,102 | 3,233 | 3,570 |
Marketing and selling (USD Mn) | 609 | 703 | 776 | 836 | 858 |
General and administrative (USD Mn) | 620 | 735 | 852 | 961 | 910 |
Restructuring charges (USD Mn) | 0 | 0 | 0 | 0 | 181 |
Operating income (USD Mn) | 6,889 | 7,788 | 7,654 | 7,867 | 8,289 |
Depreciation and amortisation (USD Mn) | 394 | 444 | 515 | 392 | 435 |
EBITDA, operating income + D&A (USD Mn) | 7,283 | 8,232 | 8,169 | 8,259 | 8,724 |
Interest expense (USD Mn) | 236 | 228 | 238 | 247 | 269 |
Interest and other income, net (USD Mn) | 118 | 39 | 300 | 532 | 1,251 |
Pre-tax income (USD Mn) | 6,771 | 7,599 | 7,716 | 8,152 | 9,271 |
Income tax provision (USD Mn) | 883 | 1,074 | 860 | 975 | 2,273 |
Effective tax rate (%) | 13.0 | 14.1 | 11.1 | 12.0 | 24.5 |
Net income (USD Mn) | 5,888 | 6,525 | 6,856 | 7,177 | 6,998 |
EPS basic (USD) | 6.47 | 7.49 | 8.16 | 8.68 | 8.71 |
EPS diluted (USD) | 6.40 | 7.44 | 8.11 | 8.61 | 8.66 |
Non-GAAP EPS diluted (USD) | 6.89 | 7.44 | 8.05 | 8.65 | 9.42 |
Dividends declared per share (USD) | 0.94 | 1.02 | 1.22 | 1.52 | 1.78 |
Diluted shares (M) | 919 | 877 | 845 | 834 | 808 |
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View Subscription PlansMargin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Gross margin (%) | 47.3 | 46.5 | 46.7 | 47.5 | 48.7 |
Operating margin (%) | 29.9 | 30.2 | 28.9 | 28.9 | 29.2 |
EBITDA margin (%) | 31.6 | 31.9 | 30.8 | 30.4 | 30.8 |
Net margin (%) | 25.5 | 25.3 | 25.9 | 26.4 | 24.7 |
Revenue growth (%) | 34.0 | 11.8 | 2.8 | 2.5 | 4.4 |
R&D intensity (% of revenue) | 10.8 | 10.7 | 11.7 | 11.9 | 12.6 |
Cash Flow and Margin Analysis (%)
| Metric | Q1 FY2026 | Q2 FY2026 | Q3 FY2026 |
|---|---|---|---|
Revenue (USD Mn) | 7,012 | 7,910 | 9,115 |
GAAP gross margin (%) | 49.0 | 49.9 | 50.3 |
GAAP operating margin (%) | 26.1 | 31.9 | 33.7 |
GAAP diluted EPS (USD) | 2.54 | 3.51 | 3.17 |
Non-GAAP diluted EPS (USD) | 2.38 | 2.86 | 3.50 |
Operating cash flow (USD Mn) | 1,690 | 845 | 3,037 |
Balance Sheet
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Total assets (USD Mn) | 25,825 | 26,726 | 30,729 | 34,409 | 36,299 |
Cash and cash equivalents (USD Mn) | 4,995 | 1,995 | 6,132 | 8,022 | 7,241 |
Short-term investments (USD Mn) | 464 | 586 | 737 | 1,449 | 1,332 |
Long-term investments (USD Mn) | 2,055 | 1,980 | 2,281 | 2,787 | 4,327 |
Accounts receivable (USD Mn) | 4,953 | 6,068 | 5,165 | 5,234 | 5,185 |
Inventories (USD Mn) | 4,309 | 5,932 | 5,725 | 5,421 | 5,915 |
Property, plant and equipment, net (USD Mn) | 1,934 | 2,307 | 2,723 | 3,339 | 4,610 |
Goodwill and intangibles (USD Mn) | 3,583 | 4,039 | 4,026 | 3,981 | 3,933 |
Short-term debt (USD Mn) | 0 | 0 | 100 | 799 | 100 |
Long-term debt (USD Mn) | 5,452 | 5,457 | 5,461 | 5,460 | 6,455 |
Total debt (USD Mn) | 5,452 | 5,457 | 5,561 | 6,259 | 6,555 |
Net debt, total debt minus cash and short-term investments (USD Mn; negative = net cash) | -7 | 2,876 | -1,308 | -3,212 | -2,018 |
Total stockholders' equity (USD Mn) | 12,247 | 12,194 | 16,349 | 19,001 | 20,415 |
Working capital (USD Mn) | 9,763 | 8,546 | 11,775 | 12,752 | 12,882 |
Cash Flow
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Operating cash flow (USD Mn) | 5,442 | 5,399 | 8,700 | 8,677 | 7,958 |
Capital expenditures (USD Mn) | 668 | 787 | 1,106 | 1,190 | 2,260 |
Free cash flow (USD Mn) | 4,774 | 4,612 | 7,594 | 7,487 | 5,698 |
Dividends paid (USD Mn) | 838 | 873 | 975 | 1,192 | 1,384 |
Share repurchases (USD Mn) | 3,750 | 6,103 | 2,189 | 3,823 | 4,895 |
Total shareholder distributions (USD Mn) | 4,588 | 6,976 | 3,164 | 5,015 | 6,279 |
Distributions as % of free cash flow | 96 | 151 | 42 | 67 | 110 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Return on equity, net income / year-end equity (%) | 48.1 | 53.5 | 41.9 | 37.8 | 34.3 |
Return on assets, net income / year-end assets (%) | 22.8 | 24.4 | 22.3 | 20.9 | 19.3 |
ROIC, NOPAT / year-end debt + equity (%) | 33.9 | 37.9 | 31.1 | 27.4 | 23.2 |
Current ratio (x) | 2.54 | 2.16 | 2.60 | 2.51 | 2.61 |
Debt to equity (x) | 0.45 | 0.45 | 0.34 | 0.33 | 0.32 |
Net debt to EBITDA (x) | 0.00 | 0.35 | -0.16 | -0.39 | -0.23 |
Interest coverage, operating income / interest expense (x) | 29.2 | 34.2 | 32.2 | 31.9 | 30.8 |
Asset turnover, revenue / year-end assets (x) | 0.89 | 0.96 | 0.86 | 0.79 | 0.78 |
Days sales outstanding (days) | 78 | 86 | 71 | 70 | 67 |
Days inventory outstanding (days) | 129 | 157 | 148 | 139 | 148 |
Revenue by Region
| Region | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
China (USD Mn) | 7,247 | 10,117 | 8,529 |
Taiwan (USD Mn) | 5,670 | 4,010 | 6,857 |
Korea (USD Mn) | 4,609 | 4,493 | 5,608 |
United States (USD Mn) | 4,006 | 3,818 | 3,063 |
Japan (USD Mn) | 2,075 | 2,154 | 2,273 |
Southeast Asia (USD Mn) | 758 | 1,141 | 1,076 |
Europe (USD Mn) | 2,152 | 1,443 | 962 |
Total (USD Mn) | 26,517 | 27,176 | 28,368 |
Geographic Revenue
| Region | FY2024 growth (%) | FY2025 growth (%) | FY2025 share (%) |
|---|---|---|---|
China | 39.6 | -15.7 | 30.1 |
Taiwan | -29.3 | 71.0 | 24.2 |
Korea | -2.5 | 24.8 | 19.8 |
United States | -4.7 | -19.8 | 10.8 |
Japan | 3.8 | 5.5 | 8.0 |
Southeast Asia | 50.5 | -5.7 | 3.8 |
Europe | -32.9 | -33.3 | 3.4 |
Revenue by Region (Quarterly)
| Region (USD Mn) | Q3 FY2025 | Q3 FY2026 |
|---|---|---|
China | 2,548 | 2,506 |
Taiwan | 1,843 | 2,025 |
Korea | 1,160 | 1,521 |
United States | 683 | 1,367 |
Japan | 713 | 839 |
Europe | 160 | 483 |
Southeast Asia | 195 | 374 |
Capital Markets
| Measure | Value |
|---|---|
Recent price | About $375–386 (late October to early November 2026) |
52-week range | About $204 – $739.67 |
All-time high | $739.67 (30 June 2026) |
Year-to-date 2026 return | About +50% (from $256.99 at the start of 2026) |
1-year price change | About +62% (from about $238 in early November 2025) |
3-year price change | About +203% (30 Sep 2023 to 18 Oct 2026) |
5-year price change | About +235% (to mid-October 2026) |
Decline from peak | About 48% (P/E-multiple compression from 30 June to mid-October 2026); about 28–31% from the 2 October 2026 high |
Beta (5-year monthly) | About 1.6 |
Valuation Snapshot
| Multiple | Value |
|---|---|
P/E, trailing GAAP EPS of $11.60 | 33.3x |
P/E, next-twelve-month normalised consensus EPS of $17.61 | 21.9x |
EV / trailing revenue ($30.84 billion) | 9.7x |
EV / trailing EBITDA (about $9.6 billion) | About 31x |
Price / book (Q3 FY2026 equity of $25.6 billion) | About 12x |
Per-Share Data
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|---|
Dividends declared per share (USD) | 0.94 | 1.02 | 1.22 | 1.52 | 1.78 | 2.05 |
Debt Maturity Profile
| Maturity | Coupon | Principal (USD Mn) |
|---|---|---|
| 2027 | 3.300% | 1,200 |
| 2029 | 4.800% | 700 |
| 2030 | 1.750% | 750 |
| 2031 | 4.000% | 550 |
| 2035 | 5.100% | 500 |
| 2036 | 4.600% | 450 |
| 2041 | 5.850% | 600 |
| 2047 | 4.350% | 1,000 |
| 2050 | 2.750% | 750 |
Total | — | 6500 |
Analyst Conclusions
Management guidance
| Metric | Guidance |
|---|---|
| Q4 FY2026 revenue | $10.25 billion ± $0.5 billion |
| Q4 FY2026 non-GAAP EPS | $4.02 ± $0.20 |
| Q4 FY2026 non-GAAP gross margin | About 50.4% |
| Q4 FY2026 non-GAAP operating expenses | About $1.58 billion |
| Implied FY2026 revenue | About $34.3 billion (+21%) |
| Implied FY2026 non-GAAP EPS | About $12.76 (+35%) |
| Calendar 2026 semiconductor equipment revenue growth | Above 30% (raised again in August 2026) |
| Calendar 2026 services growth / eBeam revenue | Above 20% / about $2 billion |
| Calendar 2027 | "Another strong growth year", based on customers' rolling eight-quarter forecasts |
| Calendar 2030 | About 54% non-GAAP gross margin; about 40% non-GAAP operating margin; services above $12 billion; more than 2 points of WFE share gain |
Q4 FY2026 revenue: Guidance: $10.25 billion ± $0.5 billion
Q4 FY2026 non-GAAP EPS: Guidance: $4.02 ± $0.20
Q4 FY2026 non-GAAP gross margin: Guidance: About 50.4%
Q4 FY2026 non-GAAP operating expenses: Guidance: About $1.58 billion
Implied FY2026 revenue: Guidance: About $34.3 billion (+21%)
Implied FY2026 non-GAAP EPS: Guidance: About $12.76 (+35%)
Calendar 2026 semiconductor equipment revenue growth: Guidance: Above 30% (raised again in August 2026)
Calendar 2026 services growth / eBeam revenue: Guidance: Above 20% / about $2 billion
Calendar 2027: Guidance: "Another strong growth year", based on customers' rolling eight-quarter forecasts
Calendar 2030: Guidance: About 54% non-GAAP gross margin; about 40% non-GAAP operating margin; services above $12 billion; more than 2 points of WFE share gain
Q1 FY2027 has 14 weeks, which will lift operating expenses more than usual. Consensus normalised EPS for the next twelve months is about $17.61, implying earnings growth of roughly 40% on fiscal 2026 levels.
Bull case
-
Margin path is credible. Gross margin has expanded for 13 straight quarters to 50.4%. Reaching the 2030 targets (54% gross, 40% operating) on a WFE market SEMI sees near $200 billion by 2028 would produce earnings power well above current consensus.
-
Positioned where AI spending goes. Leading-edge logic, DRAM and advanced packaging are expected to drive about 75% of WFE growth from 2025 to 2030. Q3 FY2026 Semiconductor Systems revenue rose 27% with a 37.7% operating margin, and EPIC partnerships with every major chipmaker lock in future process-of-record wins.
-
Services compounding with downside protection. AGS grew 22% in Q3 FY2026 at a 30% margin, and a $12 billion 2030 target adds durable, high-quality earnings. A net-cash balance sheet funds buybacks after the October 2026 de-rating, with the stock at about 22x forward EPS.
Bear case
-
Share loss and relative growth. Third-party data show Applied's equipment share falling from 20.0% to 17.9% in 2025, while Lam grew 26% in fiscal 2026. The investor-day target of only 2 points of share gain by 2030, with no WFE forecast, gives investors little near-term visibility.
-
China and policy exposure. China is about 30% of revenue and the market Applied may serve has shrunk to about 70%. The Affiliates Rule is scheduled to return on 10 November 2026. The suspended BIS denial order means any compliance lapse could have outsized consequences.
-
Cyclicality at a peak. Revenue is about to hit a record $34 billion, inventories and receivables are rising, and capex has doubled. Any pause in AI infrastructure spending (Amazon's negative free cash flow and Intel's soft outlook in October 2026 are early warnings) would hit a high-fixed-cost equipment model and could compress multiples further.
Key catalysts and monitorables (next 12 months)
| Timing | Catalyst / monitorable | What to watch |
|---|---|---|
| 10 Nov 2026 | Affiliates Rule reimposition date | Whether BIS extends the suspension (reportedly possibly to January 2027) or lets the rule return |
| 12 Nov 2026 | Q4 and fiscal 2026 results; Q1 FY2027 guidance | Gross margin against the 50.4% guide; calendar-2027 growth framing; China share |
| Late 2026 | Antitrust waiting period for the Besi stake increase | Closing of the move to about 20%; hybrid-bonding order momentum |
| Dec 2026 | FY2026 Form 10-K; SEMI year-end equipment forecast | Customer concentration, backlog and updated industry outlook |
| Feb 2027 | Q1 FY2027 (14-week quarter) | Operating-expense step-up; DRAM and HBM strength |
| Mar 2027 | Annual meeting; dividend decision | Tenth consecutive dividend increase; buyback pace |
| Through 2027 | EPIC Center outputs and new partner engagements | Conversion of joint R&D into process-of-record wins at 2nm/A14 and HBM4/4e |
| Through 2027 | Competitive data on WFE share (TechInsights, The Information Network) | Evidence that the 2025 share loss is reversing |
| Through 2027 | Hyperscaler capex and AI monetisation | Sustainability of leading-edge foundry and memory investment |
10 Nov 2026: Catalyst / monitorable: Affiliates Rule reimposition date; What to watch: Whether BIS extends the suspension (reportedly possibly to January 2027) or lets the rule return
12 Nov 2026: Catalyst / monitorable: Q4 and fiscal 2026 results; Q1 FY2027 guidance; What to watch: Gross margin against the 50.4% guide; calendar-2027 growth framing; China share
Late 2026: Catalyst / monitorable: Antitrust waiting period for the Besi stake increase; What to watch: Closing of the move to about 20%; hybrid-bonding order momentum
Dec 2026: Catalyst / monitorable: FY2026 Form 10-K; SEMI year-end equipment forecast; What to watch: Customer concentration, backlog and updated industry outlook
Feb 2027: Catalyst / monitorable: Q1 FY2027 (14-week quarter); What to watch: Operating-expense step-up; DRAM and HBM strength
Mar 2027: Catalyst / monitorable: Annual meeting; dividend decision; What to watch: Tenth consecutive dividend increase; buyback pace
Through 2027: Catalyst / monitorable: EPIC Center outputs and new partner engagements; What to watch: Conversion of joint R&D into process-of-record wins at 2nm/A14 and HBM4/4e
Through 2027: Catalyst / monitorable: Competitive data on WFE share (TechInsights, The Information Network); What to watch: Evidence that the 2025 share loss is reversing
Through 2027: Catalyst / monitorable: Hyperscaler capex and AI monetisation; What to watch: Sustainability of leading-edge foundry and memory investment
Analyst verdict
Applied Materials goes into the end of 2026 in its strongest operating position in a decade. Fiscal 2026 should produce revenue of about $34.3 billion, up about 21%. Non-GAAP earnings per share should rise by about a third, and gross margins are near 50%, the highest since the dot-com era. The AI build-out has finally reached the parts of the fab where Applied's breadth matters most. Gate-all-around transistors, backside power, new wiring metals, HBM stacking and hybrid bonding all add materials-engineering steps, and Applied supplies more of those steps than any rival. The opening of the EPIC Center, with every leading chipmaker as a founding partner, is a structural advantage. It moves Applied earlier in customers' roadmaps and should help reverse the share slippage seen in 2025.
The case is not one-sided. Applied lagged peers through much of 2025. China still produces close to a third of revenue under export rules that are tightening and politically volatile. The $252.5 million BIS settlement and its suspended denial order are a reminder that compliance risk at this company carries real consequences. At its October investor event, management chose margin and services targets over a revenue or WFE forecast. That was prudent but unhelpful for a market looking for visibility, and the stock fell about 30% from its October high.
That de-rating has changed the risk-reward. At about 22x forward earnings, with net cash, an A-rated balance sheet and a credible path to 40% operating margins, the shares price in a good deal of cyclical risk. The next 12 months hinge on two binary items: whether the Affiliates Rule returns, and how management frames calendar-2027 growth on 12 November. Beyond those, the gross-margin trajectory toward 54% is the clearest test of Applied's value-based pricing strategy. For investors who accept equipment-cycle volatility, the fundamentals support a constructive long-term view. Position sizing should allow for the China policy risk and for the sector's high sensitivity to any pause in AI capital spending.
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View Subscription PlansExecutive Leadership
Executive Leadership Team
| Name | Title | In current role since | Prior roles | Education |
|---|---|---|---|---|
Gary E. Dickerson | President and Chief Executive Officer; Director | President Jun 2012; CEO and Director Sep 2013 | CEO and director, Varian Semiconductor Equipment (2004–2011); 18 years at KLA-Tencor, rising to President and COO; earlier roles at General Motors' Delco Electronics and AT&T Technologies | BS, Engineering Management, University of Missouri–Rolla; MBA, University of California, Berkeley |
Brice Hill | SVP, Chief Financial Officer and Global Information Services | Mar 2022 | EVP and CFO, Xilinx (through its acquisition by AMD); Corporate VP of Corporate Strategy and Business Unit Finance, Intel | — |
Prabu G. Raja, PhD | President, Semiconductor Products Group | Group head since 2017; President since Mar 2023 | Senior general-management roles across Applied's semiconductor product businesses | Doctorate (PhD) |
Omkaram Nalamasu, PhD | SVP and Chief Technology Officer; President, Applied Ventures | CTO since 2013 | Bell Laboratories; Rensselaer Polytechnic Institute | PhD, Chemistry |
Teri A. Little | SVP, Chief Legal Officer and Corporate Secretary | Jun 2020 | EVP, Chief Legal Officer and Corporate Secretary, KLA Corporation | — |
Timothy M. Deane | SVP, Applied Global Services | Dec 2024 (SVP from fiscal 2025) | Group VP, Applied Global Services | — |
Adam Sanders | VP, Corporate Controller and Chief Accounting Officer | 2024 | Finance leadership roles at Applied | — |
“—” = not publicly disclosed.
Executive Leadership Team (Annual)
| Executive | Role | FY2025 total compensation (USD Mn) |
|---|---|---|
Gary E. Dickerson | President and CEO | 29.65 |
Teri A. Little | SVP, Chief Legal Officer | 9.68 |
Prabu G. Raja | President, Semiconductor Products Group | 9.46 |
Brice Hill | SVP and CFO | 8.51 |
Timothy M. Deane | SVP, Applied Global Services | 6.39 |
Omkaram Nalamasu | SVP and CTO | 6.02 |
Directors' Remuneration
| Component | USD |
|---|---|
Base salary (unchanged since 2018) | 1,030,000 |
Annual incentive bonus | 1,506,375 |
Annual long-term incentive award (grant-date value) | 26,944,995 |
Total direct compensation | 29,481,370 |
Board of Directors
| Director | Age | Director since | Independent | Principal occupation | Committees |
|---|---|---|---|---|---|
Thomas J. Iannotti (Chair) | 69 | 2005 | Yes | Former SVP and GM, Enterprise Services, Hewlett-Packard | Human Resources and Compensation (Chair) |
Gary E. Dickerson | 68 | 2013 | No | President and CEO, Applied Materials | — |
James R. Anderson | 53 | 2025 | Yes | CEO, Coherent Corp.; former CEO, Lattice Semiconductor | Strategy and Investment |
Rani Borkar | 64 | 2020 | Yes | President, Azure Hardware Systems and Infrastructure, Microsoft | Human Resources and Compensation; Strategy and Investment |
Judy Bruner | 67 | 2016 | Yes | Former EVP, Administration and CFO, SanDisk | Audit (Chair); Corporate Governance and Nominating |
Xun (Eric) Chen | 56 | 2015 | Yes | Executive Chairman, ParityBit Technologies | Human Resources and Compensation; Strategy and Investment |
Aart J. de Geus | 71 | 2007 | Yes | Executive Chair, Synopsys | Strategy and Investment |
Alexander A. Karsner | 58 | 2008 | Yes | Senior Strategist, X (Alphabet) | Corporate Governance and Nominating; Human Resources and Compensation |
Kevin P. March | 68 | 2022 | Yes | Former SVP and CFO, Texas Instruments | Audit; Corporate Governance and Nominating (Chair) |
Scott A. McGregor | 69 | 2018 | Yes | Former President and CEO, Broadcom | Audit; Strategy and Investment (Chair) |
Board & Management Changes
| Date | Change |
|---|---|
Mar 2022 | Brice Hill appointed SVP and CFO |
Mar 2023 | Prabu Raja named President, Semiconductor Products Group |
Dec 2024 | Timothy Deane named head of Applied Global Services (SVP from fiscal 2025) |
Jul 2025 | James R. Anderson (CEO, Coherent) joins the board and the Strategy and Investment Committee |
Sep 2025 | Director Yvonne McGill resigns from the board (effective 12 September 2025) |
Major Shareholders
| Holder | Shares beneficially owned | % of outstanding |
|---|---|---|
BlackRock, Inc. | 76,811,130 | 9.69 |
The Vanguard Group | 74,116,511 | 9.35 |
Competitive Landscape
Key Competitors
| Competitor | HQ | Overlap with Applied | Latest annual revenue | Relative positioning |
|---|---|---|---|---|
ASML Holding | Netherlands | Lithography is a complement; overlaps in eBeam metrology and inspection and in patterning budgets | €32.7 billion (2025) | Largest equipment company by revenue; near-monopoly in EUV |
Lam Research | USA | Etch, deposition (ALD, CVD), ECD, clean, advanced packaging | $23.2 billion (FY ended June 2026) | Strongest competitor in etch and memory; grew 26% in FY2026 |
Tokyo Electron (TEL) | Japan | Deposition, etch, clean, thermal, coater/developer | ¥2,443.5 billion (FY ended March 2026) | Broad portfolio; leads coater/developer |
KLA Corporation | USA | Process control: optical and eBeam inspection, metrology | $13.6 billion (FY ended June 2026) | Process-control leader; Applied competes in eBeam |
ASM International | Netherlands | ALD, epitaxy, vertical furnaces | Not covered here | ALD and epi specialist; competes in GAA deposition |
Axcelis Technologies | USA | Ion implantation | Not covered here | Implant specialist, strong in power and SiC |
Hitachi High-Tech | Japan | CD-SEM metrology, etch | Not covered here | Leader in CD-SEM |
SCREEN Holdings | Japan | Wafer clean (also an EPIC partner) | Not covered here | Leader in wet clean |
Kokusai Electric | Japan | Batch ALD and thermal deposition | Not covered here | Batch deposition specialist |
NAURA Technology | China | Etch, PVD, CVD, thermal, clean | Not covered here | Largest Chinese equipment maker; gaining share in China |
AMEC (Advanced Micro-Fabrication Equipment) | China | Etch, MOCVD, deposition | Not covered here | Chinese etch leader |
Onto Innovation / Ebara | USA / Japan | Packaging metrology and lithography / CMP | Not covered here | Niche competitors in packaging and CMP |
Peer Comparison FY2026
| Company | Fiscal year | Revenue | YoY growth (%) | Operating margin (%) | Net margin (%) | R&D % of revenue |
|---|---|---|---|---|---|---|
Applied Materials | FY2025 (Oct 2025) | $28.37 billion | 4.4 | 29.2 | 24.7 | 12.6 |
ASML | FY2025 (Dec 2025) | €32.67 billion | 15.6 | 34.6 | 29.4 | 14.4 |
Lam Research | FY2026 (Jun 2026) | $23.23 billion | 26.0 | 35.3 | 31.3 | 10.2 |
Tokyo Electron | FY2026 (Mar 2026) | ¥2,443.5 billion | 0.5 | 25.6 | 23.5 | 11.4 |
