Applied Posts Strong Q3 Results Driven By Display And Silicon System Segments

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AMAT: Applied Materials logo
AMAT
Applied Materials

Leading semiconductor equipment manufacturer, Applied Materials (NYSE:AMAT) reported its Q3’16 earnings on August 18th. (Fiscal years end with October.) The company saw an uptick in its display and silicon system sales in the quarter. Further, we might well expect these segments to continue to drive growth for Applied going ahead. This comes from the fact that the company witnessed strong surge in the orders in this quarter. Applied booked orders worth $3.7 billion in Q3, which is highest in any given quarter in the last 15 years.

The growth in the orders in Applied’s silicon systems segment is being driven by the surge of investment in manufacturing capacity by its customers. The company’s leading customers are aggressively pursuing 7nm and 10 nm process technologies, which is providing a key source of equipment demand for the company. Capacity additions on core geometries (22nm and 14nm) are strong as well.  Further, the company is seeing strong demand from its key customers that are upgrading their manufacturing capacity to satisfy an anticipated strong demand for 3D NAND Flash memory products and OLED display upgrade.

In the table below we list down the key metrics as reported by the company in Q3’16:

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  • Applied’s strong growth in the orders from its Silicon system and Display segments suggest that these segments will continue to drive the company’s  growth in the coming quarters.

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  • The uptick in foundry orders for Applied suggest that its customers are aggressively pursuing 10nm and 7nm processor technologies, which accounted for as much as half of the orders. Notably, the company highlighted that trailing edge investment in China is heavy as well.

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For more details, please refer to our complete analysis for Applied Materials

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