Applied Materials to grow in 3DNAND, Logic and Materials based patterning
At its 2016 Analyst Day, Applied Materials, Inc. detailed its innovation leadership strategy to drive sustainable growth and announced target non-GAAP adjusted earnings per share of $2.45 to $3.17 for fiscal 2019, with a midpoint of $2.80. This would represent compound earnings growth of approximately 17 percent over the next three years.
Applied highlighted how the semiconductor industry's major transition from lithography-based scaling to materials-enabled scaling has increased Applied's addressable opportunity from 53 percent of WFE spending in calendar 2012 to an estimated 63 percent this year. With the broadest portfolio of materials engineering technologies and its unique Product Development Engine process, Applied now expects to achieve a 4-point gain in its share of WFE spending and nearly double its display business, from 2012 through 2016. By delivering enabling service products to support customers as they make these challenging technology transitions, the company expects to grow its services business revenue by $600 million from fiscal 2013 through 2016.
"Our innovation leadership strategy, combined with the breadth and depth of our materials engineering capabilities, puts Applied in a unique position to sustainably outperform our markets," said Gary Dickerson, president and CEO. "Over the past few years, we strengthened our organization and processes while increasing investment in R&D, so that today we see opportunities earlier, develop winning products faster and are delivering increased value for customers and shareholders."
"We are raising the ceiling on our financial model based on our confidence that we have the right capability, strategy and operating model to deliver sustainable growth in the near and long term," said Robert Halliday, senior vice president and CFO.
Large, multi-year inflections are driving sustained growth in semiconductor and display: the evolution of 3D NAND; transition to 10/7nm nodes; growing need for 3D materials-enabled patterning; increasing investments in China by domestic and multinational companies; and accelerated adoption of OLED displays. These technology inflections are enabled by materials innovation, which plays directly to Applied's strengths and expands its available market.
Multiple longer term technology drivers, including augmented/virtual reality and smart vehicles, will fuel the need for higher performance computing, better networks and more and new types of memory. These emerging drivers are expected to create new opportunities for Applied's leading materials engineering technologies and products, and increase WFE and display industry investment in coming years.
