Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| As utilization starts to pick up that will be a tailwind for our services business, that's what we expect to see as we move forward and we highlighted in the earnings call that we actually see our utilization across the entire semiconductor ecosystem ICAPS, NAND, DRAM, leading logic in this quarter that we're in right now, all of those utilizations are starting to improve |
| The company has greater than 50% share in HBM and the DRAM market in general was also strong in the past year and that allowed us again to sort of offset weakness that we saw in leading-edge and in the NAND business |
| So, the handoff that you are saying -- that you're alluding to, if ICAPS is slower and China is lower in the second half of this year, then what can replace it from a customer perspective? And that's really leading edge from our perspective, and we also expect DRAM and HBM to remain strong |
| And that's been our forecast and so it's just -- it's very exciting for the company and a source of Stable-growth for us Joseph Moore Low 20% of sales, I should have mentioned upfront, I mean -- and that's a number that should have some utilization probably tailwinds and some of them more cutting-edge markets over time |
| We think that TAM is growing fast enough that Applied will be able to grow share over the foreseeable future, even when or while some of the local Chinese vendors or other competitors are able to gain share in some of the lesser differentiated longer-term solution components and that's what is happening |
| And the services business is very exciting, so their installed base is constantly growing and then because the tools are more complex, the company is creating new service capabilities for those tools |
| That market was very strong for us and it was so strong over the past two years that it outweighed weakness we saw in the NAND market, weakness we saw in the leading-edge market et cetera |
| And on the DRAM side, We think it will help drive much higher utilizations and more healthy marketplace |
| So, it's the installed base, it's the tools becoming more complex, and it's our ability to identify new valuable services to help the customers ramp, those will grow that business we think in the low-double-digits for the foreseeable future |
| Our perspective is we've been successful at identifying some important inflections and it will gain share in those inflections |
| So, you've had a great year |
| That strength and the ICAPS strength primarily in China, although, we saw strength in all the markets last year, that strength has offset the weakness we see in leading-edge, we were very clear about that and then also NAND |
| And it makes our mix, our financial returns, very efficient because that $3 billion R&D that you think of deployed in developing new technologies that's in collaboration with their customers |
| It continues to grow its capabilities, grow its TAM and search for new solutions, new materials solutions, not unlike leading edge |
| It's still a strong ICAPS, it's still a strong DRAM market |
| But after we invest internally and it's a high cash-flow business, our business average is over 20% of revenue as free cash flow and free cash flow for the business, I think grew over 30% over the last 10 years, so it's significant cash producing business |
| We think they gained share in some of the places where there's more well-known technologies and our job is to continue to innovate gate-all-around backside power or CFET would be places where we're pushing the edge of the envelope and it's growing the number of steps and requirements for our business as we go forward |
| So that's what's allowing us to gain share |
| Leading edge is much stronger in terms of the need because you're pushing the edge of the envelope and the process steps are getting a lot more complex |
| We benefited from being allowed to ship some technologies to China DRAM customers that weren't allowed last year |
| But first, reinvest in the business, we have talked about $3 billion R&D, we think we have a growing roadmap, and we've got growing opportunities for us to invest in new technologies |
| For us, it's been a great year and what we described to our investors was we spent $3 billion approximately in R&D and we point those toward inflections that the company sees, technology inflections that the company sees on customer roadmaps coming up in future years |
| I think that's good |
| There's been a significant ramp, ICAPS grew, we said more than 40% two years ago -- approximately 40% two years ago even faster last year |
| And so it actually, where you don't have the imaging technology to get something closer together or change its shape, this tool helps you change the shape, which can improve quality, and it can improve the density of your design |
| Underneath that incremental, if you subtract that from our DRAM, there is still a very healthy DRAM market both normal China and in the rest of the world, of course |
| Can you talk about some of the opportunities there? Brice Hill Well, we're very excited about the services business |
| This year, we had some markets that were very strong, these past four or five quarters |
| So, pretty significant growth |
| What we have right now, our leading edge customer is experimenting essentially with the tool and finding different ways to use it and I sort of alluded, I think some customers are finding ways that those tools will improve -- the Sculpta tool will improve their quality |
| Statement |
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| The NAND business spending is down a lot |
| If you're looking for any softness in the equation, I think what we also think is that the China capacity is a large number of new customers, they're coming up the learning curve, their yields are lower than world-class foundry yields |
| After this quarter, we expect that to slow down in the second half |
| Unidentified Analyst You have to lose some share just mathematically because there are companies on the entity list that are spending money that you can't do business with |
| We have limited M&A opportunities |
| So you see the decline from the mid-40s to the mid-30s which you've guided to as an exposure, that's mostly the DRAM side and then a little bit of consolidation |
| And this is with sort of globally low utilization levels |
| So, we've had three quarters including this quarter of elevated DRAM shipments |
| And so when we look at that, there is a little bit of lower utilization right now |
| So, it had some a lot of constancy to it |
| I mean it's -- it can be difficult for us to validate this because every company is telling us, they're going to pick up share, but yes, certainly some these epitaxial steps particularly come up again and again as being the most critical |
| I think it probably won't be surprising to anybody |
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