Applied Materials (AMAT) Cantor Fitzgerald Global Technology & Industrial Growth Conference summary

Market outlook and demand drivers

• Strong demand for AI and data center investments is driving growth in advanced logic, DRAM, and advanced packaging, with cloud service provider AI CapEx projected to rise from $600B in 2024 to $700B in 2025.

• Leading-edge semiconductor markets are fully utilized, with constraints expected to persist for more than a year, and customers are already slotting tool availability into 2027.

• Data center demand now accounts for 30% of leading-edge wafer demand, expected to surpass smartphones by 2029.

• High-bandwidth memory (HBM) is a major growth area, requiring more wafer area and process steps, with Applied capturing over 50% of the value in additional packaging steps.

• NAND growth is slower due to technological advances increasing bit density without requiring more wafer starts; bit demand remains strong but wafer starts are flat.

Supply chain and operational readiness

• Two-year visibility into customer equipment needs is now standard, improving supplier coordination and capacity planning.

• Supply chain has been re-engineered for regional self-sufficiency and reduced sole reliance, with increased capacity and inventory positions.

• No current constraints from helium supply are anticipated.

• Customers are optimizing floor space and upgrading tools to maximize output, especially in DRAM and logic.

Regional and segment trends

• ICAPS (IoT, Communications, Automotive, Power, Sensors) business in China is expected to remain flat, with 25%-30% of business typically from China.

• Trade restrictions have constrained growth in China, particularly for DRAM and NAND, but any relaxation could provide upside.

• Advanced packaging, leading logic, and DRAM are forecasted to grow faster than 20% in 2024, while ICAPS and NAND will grow more slowly.