Applied Materials, Inc.
Information Technology · Semiconductors & Semiconductor Equipment
Broadest-cut on semiconductor equipment:
- Touches more steps of the fab flow than any peer - deposition, etch, ion implant, CMP, inspection, metrology. Each leading-edge node transition (5nm → 3nm → 2nm) raises capital intensity per wafer; AMAT's wallet share scales with node complexity.
- HBM ramp is a structural deposition + etch + CMP demand (each HBM stack uses 12-16 high-density DRAM dies bonded with through-silicon vias - TSV processing is AMAT-intensive).
- Service business: ~$5B+ annual recurring; gross margin profile closer to a software company.
- AI capex cycle = leading-edge fab capacity expansion = AMAT demand across multiple process steps simultaneously.
Bear:
- Customer concentration on TSMC + Samsung + Intel + Micron + SK Hynix.
- China-trailing-edge equipment exposure has been a partial offset to leading-edge slowness in past cycles - not the cycle to count on this time around with tighter export controls.
- DRAM cycle exposure cuts both ways: HBM is structural lift, mainstream DRAM is more cyclical.