APPLIED MATERIALS INC /DE (AMAT)

Applied Materials, Inc. provides materials engineering solutions used to produce virtually every semiconductor in the world. The company designs, develops, manufactures and services the wafer fabrication tools its customers need to make semiconductors, which support applications such as artificial intelligence, the internet of things, robotics, electric and autonomous vehicles, and clean energy. It was incorporated in Delaware in 1967, and its fiscal year ends on the last Sunday in October.

The company reports two segments. Semiconductor Systems, the largest contributor to net revenue, sells equipment for chip fabrication across materials engineering, process control and advanced packaging. This includes patterning, transistor and interconnect fabrication, metrology, inspection and review (using optical and eBeam technologies), and packaging that connects multiple chips through heterogeneous integration. Applied Global Services (AGS) provides transactional and subscription services, spares and factory automation software to optimize the performance of the installed base of equipment. Through October 26, 2025, AGS also made and sold 200mm and other equipment for non-leading-edge markets. That business moves to Semiconductor Systems from the first quarter of fiscal 2026. Other businesses, such as display manufacturing equipment, are reported in Corporate and Other. Total backlog at October 26, 2025 was $15.0 billion, split 47% Semiconductor Systems, 48% AGS and 5% Corporate and Other.

Semiconductor Systems customers serve the foundry, logic and other markets (leading-edge at 7 nanometers and smaller, and non-leading-edge nodes for IoT, communications, automotive, power and sensors), as well as DRAM and NAND flash memory. Their chips end up in personal computing devices, mobile phones, AI and data center servers, automobiles, connected devices, industrial applications and consumer electronics. Demand depends on customers' capital equipment spending, which is influenced by economic conditions, semiconductor demand and pricing, new technologies, factory utilization, trade policies and export regulations, and government incentives. Two customers accounted for about 19% and 15% of fiscal 2025 net revenue. Products are sold worldwide almost entirely through a direct sales force.

Manufacturing is mainly assembly, integration and test of proprietary and commercial parts and subassemblies, using a distributed model across the United States, Singapore, Japan, China, Korea, Taiwan, Israel and other countries in Asia and Europe. It relies on qualified vendors, including contract manufacturers, and some key parts come from single or limited suppliers. Product development and engineering are performed primarily in the United States, India and Israel. The company holds more than 23,500 active patents and employed about 36,500 full-time employees in 25 countries as of October 26, 2025. Competition is substantial in every segment, ranging from small regional firms to global diversified companies, plus third-party service providers and customers' in-house service teams for AGS. The company notes possible increased competition from Chinese domestic equipment makers and the effect of U.S. export controls.