Applied Materials, Inc.

Applied Materials, Inc.
AMAT-USA
09 Sep 21 Public Information Book

Contents
Overview
05 Overview
Sales & Earnings
11 Sales & Earnings
Valuation
19 Valuation
Profitability
23 Profitability
Statement Analysis
29 Statement Analysis
M&A
33 M&A
Company Overview
35 Supply Chain
40 Event Calendar
StreetAccount
42 Barron's Summary
44 Applied Materials Q4 guidance details -- conf call ($129.20, 0.00)
45 Applied Materials initiated outperform at Daiwa ($127.37, 0.00)
46 Applied Materials reports Q3 EPS $1.90 ex-items vs FactSet $1.77 [23 est, $1.75-1.85] ($129.20, 0.00)
47 StreetAccount Metrics Recap - Applied Materials Q3 Earnings ($129.20, 0.00)
Transcripts
49 Applied Materials, Inc.(AMAT-US), Needham SemiCap and EDA conference - Fireside Chat, 24-August-2021 12:45 PM ET
Investor Slides
65 Applied Materials, Inc. Slide 1: Q3 2021 Earnings Call

There was an error processing this document. It has been excluded from the final PDF.
Management & Board
67 Management and Board
Broker Research
70 Comprehensive Technical and Fundamental Analysis for AMAT. This reports includes The Investment Rate, a macroeconomic
leading indicator, and Market Analysis. (Stock Traders Daily) 11 pages
81 AMAT: Forensic Stock Earnings & Valuation (New Constructs, LLC) 6 pages
Overview
Applied Materials, Inc. (AMAT) $133.56 Next Rpt Date: 18 Nov '21 Report as of 09 Sep '21
Profile
Sector Industry Mkt Cap (B) EV (B) Sales (M)

Producer Manufacturing Industrial Machinery $122.3 $121.5 $21,628
Applied Materials, Inc. engages in the provision of materials engineering solutions used to produce new chip and advanced display. It
operates through the following segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The
Semiconductor Systems segment includes semiconductor capital equipment for deposition, etch, ion implantation, rapid thermal
processing, chemical mechanical planarization, metrology and inspection, and wafer level packaging. The Applied Global Services
segment provides solutions to optimize equipment, performance, and productivity. The Display and Adjacent Markets segment offers
products for manufacturing liquid crystal displays, organic light-emitting diodes; coating systems and display technologies for
television; personal computers, tablets, smart phones, and consumer-oriented devices. The company was founded on November
10, 1967 and is headquartered in Santa Clara, CA.
$133.56
YTD 54.8%
3M -1.7%
1Y 140.1%
Beta 1.70
FY1 PE 19.5x
Key Items
Trading Information Valuation 5Y Trend Current vs. Ind vs. Bmrk
Current Price $133.56 P/E (LTM) 23.2 0.9 1.2
52 Wk Range $54.15 - 146.00 P/E (NTM) 17.0 0.8 0.9
Avg Daily Vol (3m) 6.73 (M)
P/Sales 5.7 2.5 2.9
Short Int (% of Float) 1.7%
P/Bk 10.0 2.0 3.7
P/CF 21.9 1.3 2.0
Key Statistics EV/EBITDA 17.5 1.1 1.2
Mkt Value (B) $122.3
EV/Sales 5.5 2.1 2.3
Ent Value (B) $121.5
Basic Shares (M) 902.9 Profitability (%) 10Y Trend LTM Ind Bmrk
Dividend (Ann) $0.96 Gross Margin 46.6 - -
Div Yld 0.7% EBITDA Margin 31.7 - -
EBIT Margin 29.9 - -
Estimates Net Margin 24.5 - -

EPS (FY0) $4.17 ROE 49.1 - -
EPS (FY1) $6.86
EPS (FY2) $8.03 Growth (%) 10Y Trend LTM Ind Bmrk
Coverage 27 Analysts Sales 33.0 - -
Target Price $162.81 EBITDA 59.0 - -
LT Growth Rate 23.7%
EBIT 64.2 - -
Avg Rating Overweight (1.29)
EPS (Dil) 67.2 - -
© 2021 FactSet Research Systems, Inc.

Dividend Focus
AMAT-USA Bmrk Ex-Date Amount LTM Divs LTM Div Yld (%)
Indicated Ann Dividend 0.96 4.67 24-Nov-2021 0.24 0.7 0.52
Dividend Yield 0.7% 1.3% 25-Aug-2021 0.24 0.92 0.69
1 Yr Div Growth 7.0% 3.2% 26-May-2021 0.24 0.9 0.66
3 Yr Div Growth 53.3% - 24-Feb-2021 0.22 0.88 0.72
5 Yr Div Growth 130.0% - 18-Nov-2020 0.22 1.08 1.43
Div Increases in 5 Yrs 4 - 19-Aug-2020 0.22 1.07 1.62
Payout Ratio 16.0% 35.3% 20-May-2020 0.22 1.06 1.86
Coverage 6.3x - 18-Feb-2020 0.21 1.04 1.60
Event Calendar
Upcoming Events EPS Sales

Date Time (EST) Description Actual Mean Actual Mean
10 Sep '21 12:45 PM Deutsche Bank Technology Conference
… - Fireside Chat
15 Sep '21 01:00 PM Citi Global Technology Conference…

- Fireside Chat
15 Sep '21 01:00 PM Citi Global Technology Conference
21 Sep '21 12:00 PM J.P. Morgan U.S. All Stars Conference

… - Fireside Chat
Past Events EPS Sales

Date Time (EST) Description Actual Mean Actual Mean
24 Aug '21 12:45 PM Needham SemiCap and EDA conference
… - Fireside Chat
19 Aug '21 04:30 PM Q3 2021 Earnings Call 1.90 1.77 6,196 5,936
09 Jun '21 01:45 PM Bank of America Global Technology…Conference
08 Jun '21 12:00 PM Exane BNP Paribas European CEO

… Conference
07 Jun '21 02:00 PM Evercore TMT Conference
02 Jun '21 04:30 PM Bernstein Strategic Decisions Conference

…
01 Jun '21 11:10 AM Cowen Technology, Media & Telecom

… Conference
24 May '21 02:00 PM J.P. Morgan Global Virtual Technology,

… Media and Communications Conference

Enterprise Value
Fiscal Date Jul '21 Apr '21 Jan '21 Oct '20 Jul '20
Basic Market Capitalization 126,346.8 121,294.4 88,719.4 55,708.3 55,363.2
Diluted Market Capitalization 1,819.1 1,725.2 1,353.5 914.3 909.3
ITM Convertible Debt - - - - -
ITM Convertible Preferred - - - - -
Stock Compensation 1,819.1 1,725.2 1,353.5 914.3 909.3
Fully Diluted Market Capitalization 128,165.9 123,019.6 90,073.0 56,622.6 56,272.5
ST Debt Total 0.0 0.0 0.0 0.0 0.0
Net LT Debt Total 5,451.0 5,450.0 5,449.0 5,448.0 5,447.0
Total Debt 5,451.0 5,450.0 5,449.0 5,448.0 5,447.0
Market Capitalization 128,165.9 123,019.6 90,073.0 56,622.6 56,272.5
+ Total Debt 5,451.0 5,450.0 5,449.0 5,448.0 5,447.0
- ITM Convertible Debt - - - - -
- Cash Equivalents 6,510.0 6,765.0 6,623.0 5,738.0 4,756.0
+ Total Preferred - - - - -
- ITM Convertible Preferred - - - - -
- Invest. in Unconsold. Subs. 0.0 0.0 0.0 0.0 0.0
+ Non-Controlling Interest 0.0 0.0 0.0 0.0 0.0
+ Pension Liabilities 243.0 243.0 243.0 243.0 208.0
Enterprise Value 127,349.9 121,947.6 89,142.0 56,575.6 57,171.5
All figures in millions of USD. Source: FactSet Equity Capital Structure, FactSet DCS, FactSet Fundamentals
Pension Summary
Oct '16 Oct '17 Oct '18 Oct '19 Oct '20
Funded Status Underfunded Underfunded Underfunded Underfunded Underfunded
Funded Ratio (%) 62.6 71.3 69.7 66.3 63.9
Fair Value of Pension Plan Assets 310 361 365 409 431
Projected Benefit Obligation 495 506 524 617 674
Shortfall or Surplus -185 -145 -159 -208 -243
Pension Expense 10.0 -5.0 6.0 8.0 11.0

Key Estimates
Earnings Oct '20 Oct '21E Oct '22E Jul '21 Oct '21E Jan '22E Apr '22E
EPS - GAAP 3.92 6.44 7.86 1.87 1.93 1.97 1.97
Growth (%) 37.1 64.3 22.1 105.5 57.2 61.4 37.6
EPS - Non GAAP 4.17 6.86 8.03 1.90 1.96 2.01 2.01
Growth (%) 37.2 64.6 17.0 79.2 56.4 44.7 23.4
Income Statement (M) Oct '20 Oct '21E Oct '22E Jul '21 Oct '21E Jan '22E Apr '22E
Sales 17,202 23,289 26,049 6,196 6,377 6,509 6,552
Growth (%) 17.8 35.4 11.9 41.0 36.0 26.1 17.4
EBITDA 4,854 7,745 8,902 2,127 2,210 2,180 2,207
Growth (%) 29.1 59.6 14.9 69.6 55.4 37.1 18.4
Operating Income 4,529 7,390 8,400 2,029 2,081 2,126 2,133
Growth (%) 32.2 63.2 13.7 74.9 57.1 42.1 20.6
Net Income 3,845 6,310 7,251 1,740 1,802 1,828 1,827
Growth (%) 33.7 64.1 14.9 78.3 57.0 42.6 21.1
Per Share Oct '20 Oct '21E Oct '22E Jul '21 Oct '21E Jan '22E Apr '22E
Dividends per Share 0.85 0.91 1.02 0.24 0.24 0.25 0.26
Cash Flow per Share 4.61 6.85 8.76 1.93 2.13 2.16 2.12
Free Cash Flow per Share 3.70 5.83 7.23 1.70 1.66 1.80 1.92
Book Value per Share 11.49 13.45 16.30 13.14 13.91 14.64 15.40
Corporate Information
Management (6 of 17) Board (6 of 11)

President, Chief Executive Officer & Director Chairman
Gary E. Dickerson, 63 Thomas J. Iannotti, 63
Senior VP-Engineering, Operations & Quality President, Chief Executive Officer & Director
Ginetto Addiego, 62 Gary E. Dickerson, 63
Chief Financial Officer & Senior Vice President Chairman-Emeritus
Daniel J. Durn, 55 James C. Morgan, 83
Chief Information Officer & Group Vice President Independent Director
Jay O. Kerley Aart J. de Geus, 66
Chief Technology Officer & Senior Vice President Independent Director
Omkaram Nalamasu, 63 Alexander A. Karsner, 53
Secretary, Chief Legal Officer & Senior VP Independent Director
Teri A. Little, 57 Eric Chen, 51
3050 Bowers Avenue Michael Sullivan Fiscal Year October

Santa Clara, California Investor Relations Contact Exchange NASDAQ
95054-3299 [email protected] ISIN US0382221051
United States +1.408.986.7977 CUSIP 038222105
appliedmaterials.com SEDOL 2046552
Employees (2020) 24,000

Ownership Summary
FLOAT 99.5%
Shares Out 902,929,000
Short Interest 15,560,400
INSIDER 0.5%
Inst. Ownership 80.2%
North American 64.8%
Non-North American 15.4%
Inst Ownership as % of Float 80.6%
Top 10 Inst. Holders 32.0%
NET POSITION CHANGE -31,404,096

Total (2121) 724,121,920
New (450) 23,164,900
Increase (669) 69,224,200
Decrease (764) -108,123,000
Soldout (151) -15,670,100
Top Holders - Institutions and Insiders
Institutions Position (000) % O/S % Port 3M Chg (000) Mkt Value (USD)
The Vanguard Group, Inc. 69,641 7.7 0.2 742 9,459,390,000
BlackRock Fund Advisors 47,930 5.3 0.2 1,558 6,510,370,000
SSgA Funds Management, Inc. 40,213 4.5 0.3 -2,186 5,462,170,000
T. Rowe Price Associates, Inc. (Inves... 28,103 3.1 0.3 -18,035 3,817,170,000
Capital Research & Management Co. (Wo... 25,352 2.8 0.4 12,544 3,443,490,000
Fidelity Management & Research Co. LLC 19,427 2.2 0.2 5,260 2,638,740,000
Capital Research & Management Co. (In... 18,743 2.1 0.5 1,199 2,545,850,000
Geode Capital Management LLC 14,995 1.7 0.2 664 2,036,810,000
Norges Bank Investment Management 12,706 1.4 0.2 0 1,725,880,000
Invesco Advisers, Inc. 11,900 1.3 0.5 -3,900 1,616,320,000
Northern Trust Investments, Inc.(Inve... 10,969 1.2 0.2 -561 1,489,930,000
Columbia Management Investment Advise... 9,567 1.1 0.4 -5,425 1,299,480,000
Insiders Position (000) % O/S % Port 3M Chg (000) Mkt Value (USD)
DICKERSON GARY E 1,968 0.2 100.0 279 267,373,000
RAJA PRABU G 427 0.0 100.0 147 57,961,900
SALEHPOUR ALI 366 0.0 100.0 0 49,666,000
DURN DANIEL 341 0.0 100.0 195 46,259,800
ADDIEGO GINETTO 313 0.0 100.0 50 42,448,100

Sales & Earnings
Segments Snapshot - Quarterly (M)
Jul '21 YoY % % of Sales Oct '21E YoY % 3Y Trend

Sales 6,196 41.0 100.0 6,377 36.0
Silicon 4,454 52.7 71.9 4,446 44.8
Applied Global Services 1,286 24.4 20.8 1,284 16.1
Display and Adjacent Markets 431 1.4 7.0 419 -13.5
Corporate and Other 25 25.0 0.4 25 -7.4
Estimate Growth - Quarterly
Oct '20 Oct '21E Growth (YoY%)

1.25 1.96 56.44%
Oct '20 Oct '21E Growth (YoY%)

4,688 6,377 36%

EPS - Consensus Outlook - Annual & Quarterly
FY Ending Guidance # of Ests Mean Low High Std Dev 3 Mo. Rev
Oct '20 5.08 - 4.17 - - -
Oct '21E - 27 6.86 6.47 7.47 0.16
Oct '22E - 27 8.03 6.99 9.00 0.47
Oct '23E - 17 8.30 6.96 9.31 0.59
Latest 12 Mo. - - 1.90 1.90 1.90 -
Next 12 Mo. - - 7.86 6.92 8.78 -
FQ Ending Guidance # of Ests Mean Low High Std Dev 3 Mo. Rev
Jul '21 1.70-1.82 - 1.90 - - -
Oct '21E 1.87-2.01 23 1.96 1.92 2.02 0.02
Jan '22E - 20 2.01 1.89 2.47 0.12
Apr '22E - 20 2.01 1.80 2.33 0.12
Jul '22E - 20 2.07 1.80 2.73 0.20
Oct '22E - 17 2.10 1.72 2.97 0.27
Jan '23E - 11 2.16 1.90 3.29 0.39
Apr '23E - 5 2.10 2.03 2.19 0.06
Jul '23E - 5 2.14 2.06 2.34 0.11
Segments LT Estimates - Annual (M)
Actuals 10Y Trend Oct '20 Oct '21E Oct '22E Oct '23E Oct '24E
Sales 17,202 23,289 26,049 26,768 27,955
Silicon 11,367 16,565 18,948 19,361 19,466
Applied Global Services 4,155 4,950 5,404 5,899 6,576
Display and Adjacent Markets 1,607 1,636 1,678 1,834 2,200
Corporate and Other 73 216 104 104 -
Adjacent Groups - - - - -
Energy & Environmental - - - - -
Growth (%) 10Y Trend Oct '20 Oct '21E Oct '22E Oct '23E Oct '24E
Sales 17.8 35.4 11.9 2.8 4.4
Silicon 25.9 45.7 14.4 2.2 0.5
Applied Global Services 7.8 19.1 9.2 9.2 11.5
Display and Adjacent Markets -2.7 1.8 2.5 9.3 20.0
Corporate and Other -3.9 195.9 -51.9 0.0 -
Adjacent Groups - - - - -
Energy & Environmental - - - - -

Guidance History
Estimate Table
Sales (M)
FY Ending Oct '15 Oct '16 Oct '17 Oct '18 Oct '19 Oct '20 Oct '21E Oct '22E Oct '23E
Q1 (Jan) 2,359 2,257 3,278 4,204 3,753 4,162 5,162 6,509 6,831
Q2 (Apr) 2,442 2,450 3,546 4,567 3,539 3,957 5,582 6,552 6,758
Q3 (Jul) 2,490 2,821 3,744 4,468 3,562 4,395 6,196 6,690 6,829
Q4 (Oct) 2,368 3,297 3,969 4,014 3,754 4,688 6,377 6,762 6,960
Fiscal Year 9,659 10,825 14,537 17,253 14,608 17,202 23,289 26,049 26,768
EV/Sales (x) 2.1 3.0 4.1 2.0 3.6 3.2 5.3 4.7 4.6
CY Ending Dec '15 Dec '16 Dec '17 Dec '18 Dec '19 Dec '20 Dec '21E Dec '22E Dec '23E
Cal. Year 9,849 11,450 14,991 16,811 15,034 18,227 23,750 26,169 26,954
EV/Sales (x) 2.3 3.1 3.6 2.1 3.9 4.4 5.2 4.7 4.5
Growth (YoY%)
Q1 (Jan) 7.7 -4.3 45.2 28.2 -10.7 10.9 24.0 26.1 4.9
Q2 (Apr) 3.8 0.3 44.7 28.8 -22.5 11.8 41.1 17.4 3.1
Q3 (Jul) 9.9 13.3 32.7 19.3 -20.3 23.4 41.0 8.0 2.1
Q4 (Oct) 4.6 39.2 20.4 1.1 -6.5 24.9 36.0 6.0 2.9
Fiscal Year 6.5 12.1 34.3 18.7 -15.3 17.8 35.4 11.9 2.8
Cal. Year 7.4 16.3 30.9 12.1 -10.6 21.2 30.3 10.2 3.0

Sales - Consensus Trend - Annual (M)
Sales - Broker Detail - Oct '21E (M)
Consensus Guidance # of Brokers

6,377 6,080-6,580 21
Top 11 Brokers Research Estimate Bottom 10 Brokers Research Estimate

Invest Heroes 09/03/2021 7,053 DA Davidson 08/20/2021 6,325
Wells Fargo Securities 08/20/2021 6,455 Restricted 09/08/2021 6,325
Susquehanna Financial Group
… 08/20/2021 6,420 B Riley Securities 09/08/2021 6,325
Daiwa Securities Co. Ltd. 08/25/2021 6,358 New Street Research 08/20/2021 6,306
Stifel Nicolaus 09/08/2021 6,345 Elazar Advisors 08/23/2021 6,288
Needham 08/20/2021 6,330 Credit Suisse - -
Evercore ISI 09/07/2021 6,330 Restricted - -
Cowen & Company 08/20/2021 6,330 Restricted - -
Mizuho Securities USA 09/02/2021 6,327 Restricted - -
Deutsche Bank Research 08/20/2021 6,327 Bernstein Research - -
Craig Hallum Capital Group 08/20/2021 6,326

Sales - Broker Revisions - Oct '21E (M)
Consensus Guidance 1M Revision 1W Revision

6,377 6,080 - 6,580 5.6% 0.5%
Estimate Table
EPS
Q1 (Jan) 0.27 0.26 0.67 1.06 0.81 0.98 1.39 2.01 2.16
Q2 (Apr) 0.29 0.34 0.79 1.22 0.70 0.89 1.63 2.01 2.10
Q3 (Jul) 0.33 0.50 0.86 1.20 0.74 1.06 1.90 2.07 2.14
Q4 (Oct) 0.29 0.66 0.93 0.97 0.80 1.25 1.96 2.10 2.21
Fiscal Year 1.19 1.75 3.25 4.45 3.04 4.17 6.86 8.03 8.30
P/E (x) 14.1 16.6 17.4 7.4 17.8 14.2 19.5 16.6 16.1
Cal. Year 1.28 2.00 3.45 4.21 3.23 4.62 7.06 8.07 8.46
P/E (x) 14.6 16.1 14.8 7.8 18.9 18.7 18.9 16.5 15.8
Growth (YoY%)
Q1 (Jan) 17.4 -3.7 157.7 58.2 -23.6 21.0 41.8 44.7 7.1
Q2 (Apr) 3.6 17.2 132.4 54.4 -42.6 27.1 83.1 23.4 4.6
Q3 (Jul) 17.9 51.5 72.0 39.5 -38.3 43.2 79.2 8.7 3.5
Q4 (Oct) 7.4 127.6 40.9 4.3 -17.5 56.3 56.4 7.4 5.4
Fiscal Year 11.2 47.1 85.7 36.9 -31.7 37.2 64.6 17.0 3.3
Cal. Year 17.7 56.0 72.4 22.1 -23.4 43.2 52.7 14.4 4.7

EPS - Consensus Trend - Annual
EPS - Broker Detail - Oct '21E
Consensus Guidance # of Brokers

1.96 1.87-2.01 23
Top 12 Brokers Research Estimate Bottom 11 Brokers Research Estimate

Susquehanna Financial Group
… 08/20/2021 2.00 Restricted 09/08/2021 1.94
Daiwa Securities Co. Ltd. 08/25/2021 2.00 Deutsche Bank Research 08/20/2021 1.94
Elazar Advisors 08/23/2021 1.98 Stifel Nicolaus 09/08/2021 1.94
Wells Fargo Securities 09/07/2021 1.98 B Riley Securities 09/08/2021 1.94
Restricted 08/20/2021 1.95 DA Davidson 08/20/2021 1.92
New Street Research 08/20/2021 1.95 Restricted - -
Cowen & Company 09/08/2021 1.95 Credit Suisse - -
Restricted 08/20/2021 1.94 Restricted - -
Needham 08/20/2021 1.94 Restricted - -
Craig Hallum Capital Group 08/20/2021 1.94 Restricted - -
Mizuho Securities USA 09/02/2021 1.94 Bernstein Research - -
Evercore ISI 09/07/2021 1.94

EPS - Broker Revisions - Oct '21E
Consensus Guidance 1M Revision 1W Revision

1.96 1.87 - 2.01 7.9% 0.0%

Valuation
Valuation Summary
Valuation 5Y Trend Current 5Y High 5Y Low 5Y Avg vs. Ind vs. Bmrk
P/E LTM 23.2 36.3 8.7 19.6 0.9 1.0
P/E NTM 17.0 23.3 7.5 14.0 0.8 0.7
P/Sales 5.7 7.6 1.7 3.8 2.5 2.0
P/Sales NTM 4.7 6.0 1.8 3.2 2.3 1.8
P/Bk 10.0 12.3 4.1 6.5 2.0 2.3
P/Bk NTM 8.4 8.9 3.1 5.4 1.7 2.0
P/CF 21.9 34.5 8.5 16.5 1.3 1.4
P/CF NTM 15.7 19.6 6.4 12.2 1.0 1.0
EV/EBITDA 17.5 27.6 5.5 13.7 1.1 0.9
EV/EBITDA NTM 13.7 18.9 6.2 11.0 1.0 0.9
EV/Sales 5.5 7.6 1.7 3.7 2.1 1.6
EV/Sales NTM 4.7 5.9 1.9 3.2 2.0 1.5
Valuation Peers Analysis
Applied Materials KLA Tokyo Electron Lam Research Veeco Instruments Jusung Engineering
(AMAT) (KLAC) (8035) (LRCX) (VECO) (036930-KR)
P/E LTM 23.2 25.2 28.2 21.7 131.9 26.0
P/E NTM 17.0 17.5 20.1 17.0 15.5 -
PEG NTM 0.7 1.2 1.3 1.1 - -
P/Sales 5.7 7.6 5.3 5.8 2.3 3.2
P/Bk 10.0 15.2 7.5 13.8 2.7 2.5
P/CF 21.9 23.8 - 23.3 26.9 16.0
EV/EBITDA 17.5 18.5 18.3 17.2 17.3 40.1
EV/Sales 5.5 7.6 5.0 5.6 2.2 3.5
Div Yld 0.7 1.2 2.3 1.0 0.0 0.0

Price to Earnings
Price to Earnings - NTM

Valuation Multiples
Financial Valuation Ratios Oct '20A Jul '21LTM Oct '21E Oct '22E Oct '23E Oct '24E
EV/Sales 7.06 5.62 5.22 4.66 4.54 4.35
EV/EBITDA 25.68 17.73 15.69 13.65 13.63 12.77
EV/EBIT 27.90 18.79 16.44 14.47 14.22 13.40
EBITDA/Interest Expense 20.30 30.05 35.98 43.37 43.11 41.73
EBIT/Interest Expense 18.69 28.36 34.33 40.93 41.32 39.78
EBITDA-CapEx/Interest Expense 18.49 27.32 33.10 40.34 39.86 39.08
Total Debt/EBITDA 1.21 0.83 - - - -
Total Debt/EV 0.05 0.05 0.04 0.04 - -
Price to Earnings 34.06 23.21 19.46 16.63 16.10 14.38
Financial Summary Oct '20A Jul '21LTM Oct '21E Oct '22E Oct '23E Oct '24E
Revenue 17,200.00 21,628.00 23,288.67 26,048.76 26,767.95 27,955.00
Gross Income 7,668.00 10,078.00 11,100.86 12,467.19 13,023.58 13,520.50
EBITDA 4,731.0 6,852.0 7,745.0 8,901.9 8,914.7 9,515.0
EBIT 4,355.00 6,466.00 7,389.95 8,400.43 8,544.85 9,069.00
Net Income 3,619.0 5,307.0 6,309.6 7,251.4 7,356.0 7,862.5

Profitability
Profitability Ratios
Profitability (%) 10Y Trend Oct '15 Oct '16 Oct '17 Oct '18 Oct '19 Oct '20
Gross Margin 40.9 41.9 44.8 45.1 43.5 44.6
Operating Margin 16.9 21.1 26.3 27.7 22.9 25.3
Pretax Margin 16.5 18.6 25.7 27.2 22.4 24.2
Net Margin 14.3 15.9 23.6 19.2 18.5 21.0
ROA 9.7 11.5 20.2 17.8 14.7 17.5
ROE 17.8 23.2 41.5 40.9 36.0 38.5
ROTC 14.8 20.1 30.3 35.7 26.1 29.2
ROIC 13.3 16.1 27.5 24.7 21.6 24.8
Efficiency 10Y Trend Oct '15 Oct '16 Oct '17 Oct '18 Oct '19 Oct '20
Revenue/Employee (000) 623.2 648.2 790.1 821.6 664.0 716.7
Net Income/Employee (000) 88.8 103.1 186.6 157.8 123.0 150.8
Receivables Turnover (x) 5.7 5.4 6.3 7.0 5.6 6.0
Days of Sales Outstanding 64.4 67.7 58.0 51.9 65.0 61.0
Inventory Turnover (x) 3.4 3.2 3.2 2.8 2.3 2.6
Days of Inventory on Hand 108.7 112.6 113.2 128.1 159.0 141.3
Payables Turnover (x) 9.4 8.8 10.1 10.6 8.2 9.6
Days of Payables Outstanding 38.8 41.2 36.0 34.5 44.5 38.1
Total Asset Turnover (x) 0.6 0.7 0.7 1.0 0.8 0.8
Working Capital Turnover (x) 1.8 2.3 1.7 2.6 2.5 1.9
Profitability Peer Analysis - Annual
Applied Tokyo Lam Veeco

Materials KLA Electron Research Instruments Jusung Engineering
Gross Margin (%) 44.6 59.2 40.4 46.5 39.4 33.4
Operating Margin (%) 25.3 36.1 22.9 30.6 5.2 -28.2
Net Margin (%) 21.0 30.0 17.4 26.7 -1.8 -6.9
ROA (%) 17.5 21.3 18.0 25.7 -1.0 -1.6
ROE (%) 38.5 68.8 26.2 69.8 -2.1 -3.5
Revenue/Employee (000) 716.7 612.2 96,630 1,037 457.4 290,554
Receivables Turnover (x) 6.0 5.3 5.7 5.7 5.3 4.1
Inventory Turnover (x) 2.6 2.0 2.1 3.4 1.9 1.5
Payables Turnover (x) 9.6 10.2 9.2 12.1 10.5 5.4

Credit Ratios
Liquidity Analysis 10Y Trend Oct '15 Oct '16 Oct '17 Oct '18 Oct '19 Oct '20
Current Ratio 2.44 2.30 3.14 2.64 2.30 3.00
Quick Ratio 1.96 1.74 2.43 1.73 1.51 2.12
Cash Ratio 1.31 1.03 1.77 0.99 0.81 1.29
Credit Analysis 10Y Trend Oct '15 Oct '16 Oct '17 Oct '18 Oct '19 Oct '20
Interest Coverage (EBITDA) 21.3 17.5 21.7 22.7 15.9 20.3
Interest Coverage (EBIT) 17.3 14.9 19.6 20.7 14.3 18.7
Fixed Chg Coverage 17.3 14.9 19.6 20.7 14.3 18.7
CFO/Int Exp 12.4 16.1 18.5 16.4 13.9 16.3
Total Debt/EBITDA 2.3 1.3 1.3 1.0 1.4 1.2
Net Debt/EBITDA -0.2 -0.2 -0.5 0.2 0.5 -0.0
Net Debt/(EBITDA-CapEx) -0.2 -0.2 -0.5 0.3 0.5 -0.0
LT Debt/EBITDA 1.7 1.2 1.3 1.0 1.3 1.2
Total Debt/Total Equity 59.7 46.3 56.7 77.6 64.7 54.0
Total Debt/Total Capital 37.4 31.7 36.2 43.7 39.3 35.0
Total Debt/Total Assets 29.7 22.9 27.3 29.9 27.9 25.5
Net Debt/FFO -0.2 -0.2 -0.5 0.3 0.5 -0.0
LT Debt/FFO 1.9 1.3 1.3 1.3 1.4 1.3
FCF/Total Debt 0.2 0.7 0.6 0.6 0.5 0.6
CFO/Total Debt 0.3 0.7 0.7 0.7 0.6 0.7
Altman Z-Score (Original) - Annual (M)

Oct '16 Oct '17 Oct '18 Oct '19 Oct '20
(Working Capital 4,721.0 8,803.0 6,679.0 5,759.0 8,910.0
/ Total Assets) 14,589.0 19,424.0 17,785.0 19,035.0 22,353.0
= 1.2 * X1 0.3883 0.5438 0.4506 0.3631 0.4783
+ (Retained Earnings 15,252.0 18,258.0 20,874.0 24,386.0 27,209.0
/ Total Assets) 14,589.0 19,424.0 17,785.0 19,035.0 22,353.0
= 1.4 * X2 1.4636 1.3160 1.6432 1.7936 1.7041
+ (EBIT 2,282.0 3,820.0 4,782.0 3,350.0 4,355.0
/ Total Assets) 14,589.0 19,424.0 17,785.0 19,035.0 22,353.0
= 3.3 * X3 0.5162 0.6490 0.8873 0.5808 0.6429
+ (Market Value of Equity 31,432.4 60,181.9 32,320.7 50,122.9 54,093.7
/ Total Liabilities) 7,372.0 10,075.0 10,946.0 10,821.0 11,775.0
= 0.6 * X4 2.5583 3.5840 1.7717 2.7792 2.7564
+ (Revenue 10,825.0 14,537.0 17,253.0 14,608.0 17,200.0
/ Total Assets) 14,589.0 19,424.0 17,785.0 19,035.0 22,353.0
= 0.999 * X5 0.7413 0.7477 0.9691 0.7667 0.7687
Z-Score 5.67 6.84 5.72 6.28 6.35

CDS Curve
Debt Capital Structure Summary
EBITDA (01 Aug '21) EBITDA (02 May '21)

6,852.00LTM 5,937.00LTM
01 Aug '21 /EBITDA 02 May '21 /EBITDA

ST Debt Total 0.00 0.00 0.00 0.00
Revolving Credit 0.00 0.00 0.00 0.00
Term Loans 0.00 0.00 0.00 0.00
Notes/Bonds 5,500.00 0.80 5,500.00 0.93
Senior Unsec. 5,500.00 - 5,500.00 -
Other -49.00 -0.01 -50.00 -0.01
Adjustments -49.00 - -50.00 -
LT Debt Total 5,451.00 0.80 5,450.00 0.92
Net LT Debt Total 5,451.00 0.80 5,450.00 0.92
Total Debt 5,451.00 0.80 5,450.00 0.92

Debt Seniority Breakdown - Annual (M)
Credit Peer Analysis - Annual

Interest Coverage (EBIT) 18.7 16.0 - 21.4 1.0 -7.5
Fixed Chg Coverage 18.7 16.0 - 21.4 1.0 -7.5
CFO/Int Exp 16.3 14.0 - 17.2 1.7 1.1
Total Debt/EBITDA 1.2 1.2 0.0 1.0 5.9 -
Net Debt/EBITDA -0.0 0.4 -0.9 -0.1 0.2 -5.3
LT Debt/EBITDA 1.2 1.2 0.0 1.1 6.0 -2.2
Total Debt/Total Equity 54.0 105.0 0.4 85.7 81.2 51.7
Total Debt/Total Capital 35.0 51.2 0.4 46.2 44.8 34.1
Total Debt/Total Assets 25.5 34.5 0.3 32.5 36.9 21.4

DuPont Analysis - Annual
Oct '13 Oct '14 Oct '15 Oct '16 Oct '17 Oct '18 Oct '19 Oct '20 LTM
Asset Turnover 0.62 0.72 0.68 0.72 0.85 0.93 0.79 0.83 0.95
x Operating Margin 9.6 16.2 16.9 21.1 26.3 27.7 22.9 25.3 29.9
x Interest Burden 0.48 0.99 0.98 0.88 0.98 0.98 0.98 0.96 0.93
x Tax Burden 0.73 0.74 0.86 0.85 0.92 0.71 0.83 0.87 0.88
= ROA 2.1 8.5 9.7 11.5 20.2 17.8 14.7 17.5 23.3
x Equity Leverage 1.69 1.69 1.84 2.02 2.05 2.30 2.45 2.20 2.11
= ROE 3.6 14.3 17.8 23.2 41.5 40.9 36.0 38.5 49.1
x Earnings Retention -85.7 54.0 64.3 74.0 87.4 78.3 71.0 77.8 84.0
= Reinvestment Rate -2.8 7.8 11.5 17.2 36.3 33.5 25.7 30.1 41.5
DuPont Peer Analysis - Annual

Asset Turnover 0.8 0.7 1.0 1.0 0.5 0.2
x Operating Margin 25.3 36.1 22.9 30.6 5.2 -28.2
x Interest Burden 1.0 0.9 1.0 1.0 -0.4 0.1
x Tax Burden 0.9 0.9 0.8 0.9 1.0 1.8
= ROA 17.5 21.3 18.0 25.7 -1.0 -1.6
x Equity Leverage 2.2 3.2 1.5 2.7 2.2 2.1
= ROE 38.5 68.8 26.2 69.8 -2.1 -3.5
x Earnings Retention 77.8 73.1 50.0 80.7 - -
= Reinvestment Rate 30.1 50.3 14.4 56.8 -2.1 -4.9

Statement Analysis
Financial Statement
Oct '17 Oct '18 Oct '19 Oct '20 LTM 10Y Trend 5Y CAGR 10Y CAGR
Sales/Revenues 14,537 17,253 14,608 17,200 21,628 12.2% 6.1%
COGS incl. D&A 8,029 9,478 8,258 9,532 11,550 10.8% 5.7%
Gross Inc 6,508 7,775 6,350 7,668 10,078 14.2% 6.6%
SG&A 2,688 2,993 3,000 3,313 3,612 7.3% 4.8%
Other Oper Expense 0 0 0 0 0 - -
EBIT(Operating Income) 3,820 4,782 3,350 4,355 6,466 21.7% 8.2%
Nonop Inc (Exp) - Net 82 135 123 76 13 34.9% 9.1%
Interest Expense 195 231 234 233 228 19.9% 26.9%
Unusual Exp (Inc) - Net -24 -8 -30 32 243 - -25.5%
Pretax Income 3,731 4,694 3,269 4,166 6,008 21.1% 11.6%
Income Taxes 297 1,381 563 547 701 19.9% 2.0%
Minority Interest 0 0 0 0 0 - -
Net Income 3,434 3,313 2,706 3,619 5,307 21.3% 14.5%
EPS (recurring) 3.152 3.224 2.841 3.945 5.966 29.2% 14.6%
EPS (diluted) 3.170 3.230 2.864 3.921 5.754 28.5% 18.8%
EBITDA 4,227 5,239 3,713 4,731 6,852 18.8% 7.5%
Income Statement Growth - Annual

AMAT Ind

Financial Statement
Oct '16 Oct '17 Oct '18 Oct '19 Oct '20 10Y Trend 5Y CAGR 10Y CAGR
Curr Assets 8,353 12,918 10,747 10,206 13,369 7.6% 7.0%
Cash & ST Inv 3,749 7,276 4,030 3,618 5,738 2.9% 8.3%
Accounts Receivable 2,279 2,338 2,565 2,641 3,111 12.3% 5.4%
Inventories 2,050 2,930 3,722 3,474 3,904 16.3% 9.7%
Other Current Assets 275 374 430 473 616 -3.2% -2.6%
Curr Liabilities 3,632 4,115 4,068 4,447 4,459 3.3% 4.4%
STD & Curr Port LT Debt 200 0 0 600 64 -44.4% 48.1%
Accounts Payable 813 945 996 958 1,124 11.3% 5.5%
Income Tax Payable 101 112 136 160 222 29.9% -2.1%
Other Current Liabilities 2,518 3,058 2,936 2,729 3,049 10.2% 4.5%
Total Debt 3,343 5,304 5,309 5,313 5,707 4.7% 39.4%
Total Assets 14,589 19,424 17,785 19,035 22,353 7.9% 7.4%
Total Liabilities 7,372 10,075 10,946 10,821 11,775 8.9% 13.2%
Shrhldrs Equity 7,217 9,349 6,839 8,214 10,578 6.8% 3.4%
BVPS 6.695 8.820 7.072 8.967 11.573 12.0% 7.4%
Use of Cash
Cash and Liabilities Oct '15 Oct '16 Oct '17 Oct '18 Oct '19 Oct '20
Cash and Short Term Investments 4,965 3,749 7,276 4,030 3,618 5,738
Share Repurchase -1,325 -1,892 -1,172 -5,283 -2,403 -649
Dividends -487 -444 -430 -605 -771 -787
Debt Servicing -94 -1,360 -400 -231 -234 -3,115
Net Change in Reporting Period Cash (FX adjusted) 1,795 -1,391 1,604 -1,570 -311 2,337
Cash Flow Increases/Decreases 1,032 2,217 1,333 4,425 2,952 3,735
Cash Received (Paid) from Debt Activity 2,487 -1,360 1,776 -231 -234 -136
Dividends Paid -487 -444 -430 -605 -771 -787
Cash Received (Paid) from Change in Equity -1,237 -1,804 -1,075 -5,159 -2,258 -475

Financial Statement
Oct '17 Oct '18 Oct '19 Oct '20 LTM 10Y Trend 5Y CAGR 10Y CAGR
Net Income 3,434 3,313 2,706 3,619 5,307 21.3% 14.5%
Deprec & Amort 407 457 363 376 386 0.3% 2.1%
Other Funds 156 262 244 367 469 14.8% -1.8%
Changes in Wk Cap -377 -339 -115 -638 -579 - -
Operating Cash Flow 3,609 3,787 3,247 3,804 5,609 26.7% 8.2%
Cap Ex -345 -622 -441 -422 -624 - -
Other Investing, Total -2,181 1,193 -2 292 - - -
Investing Cash Flow -2,526 571 -443 -130 -770 - -
Free Cash Flow 3,264 3,165 2,806 3,382 4,985 29.0% 8.1%
FCF/Share 3.011 3.085 2.969 3.664 5.430 36.5% 12.3%
FCF Yield (%) 5.3 9.5 5.3 6.0 3.9 5.0% -4.3%
% of Net Income 95.0 95.5 103.7 93.5 93.9 6.3% -5.6%
Cash Divs Pd -430 -605 -771 -787 -822 - -
Change in Capital Stock -1,075 -5,159 -2,258 -475 -2,131 - -
Iss/Red Debt 1,971 0 0 97 0 -48.1% -
Financing Cash Flow 521 -5,928 -3,115 -1,337 -3,130 - -
Net Change in Cash 1,604 -1,570 -311 2,337 1,709 5.4% 23.6%

M&A
Takeover Defense
Bullet Proof Rating
0.25
0 10
Strengths Weaknesses
The ability of shareholders to call special meetings is limited to 20% Annually elected directors
shareholders
Action can be taken without a meeting by written consent
Board is authorized to adopt, amend or repeal bylaws without Directors may be removed with or without cause
shareholder approval
No poison pill in force
Blank check preferred stock
Advance notice requirements for proposals/nomination
More
State Takeover Laws
Statute Source Covered

Assumption of Labor Contracts Section 706 of Title 19 of the Delaware Code Yes
Freezeout Provision (3 Year) Section 203 of the Delaware General Corporation Law Yes
Yes
Takeover Defense Peer Analysis
Applied Tokyo Lam Veeco Jusung

Materials KLA Electron Research Instruments Engineering
(AMAT) (KLAC) (8035-JP) (LRCX) (VECO) (036930-KR)
Bullet Proof Rating 0.2 2.0 - 0.8 4.2 -
Classified Board No No - No Yes -
S'holders Can't Call Meetings No Yes - Yes No -
No Action By Written Consent No Yes - No Yes -
Fair Price Provision No No - No No -
Supermajority for Mergers No Yes - No No -
Directors Removed w/ Cause No No - No Yes -
Supermajority to Remove No No - No No -
Poison Pill In Force No No - No No -

Company Overview
Applied Materials, Inc. (AMAT) Data as of: 9 Sep '21
$133.56 Next Report Date: 18 Nov '21
Relationship Overview
Top 10 Relationships (out of 61)
Relationship Disclosures/ 3M Price

Rel Type Rel Rank Company Ctry Industry Value ($) Mkt Cap ($) Source Correlation Key Risks Key Events
Supplier 1 Ultra Clean USA Semiconductor 338 2,021 Mutual 0.60 - -
Manufacturing
Capital
Equipment
Supplier 2 Advanced USA Module and 248 3,298 Mutual 0.51 - -
Energy Inds Subassembly
Components
Supplier 3 MKS USA Semiconductor 247 8,104 Reverse 0.48 - -
Instruments Manufacturing
Capital
Equipment
Supplier 4 Ichor Holdings USA Semiconductor 316 1,252 Reverse 0.60 - -
Manufacturing
Capital
Equipment
Partner 5 Onto Innovation USA Semiconductor - 3,749 Reverse 0.40 - -
Manufacturing
Capital
Equipment
Customer 6 Taiwan TWN Semiconductor 3,096 578,651 Mutual 0.33 - 1
Semicon Mfg Manufacturing
Services
Supplier 7 Benchmark USA Contract 246 973 Reverse 0.29 - -
Electronics Electronic
Manufacturing
Supplier 8 Brooks USA Semiconductor - 6,647 Reverse 0.56 - -
Automation Manufacturing
Capital
Equipment
Supplier 9 PS Business USA Equity REITs 2 5,617 Reverse -0.05 - -
Parks
Customer 10 Samsung KOR General 3,096 441,252 Direct 0.65 - -
Electronics Computer
Hardware
Millions, Sources: FactSet Revere, FactSet Fundamentals, FactSet Prices, FactSet Mergerstat, FactSet Estimates, and the World Bank
All Relationships (61)
Relationship Disclosures/ 3M Price

Rel Type Rel Rank Company Ctry Industry Value ($) Mkt Cap ($) Source Correlation Key Risks Key Events
Supplier 1 Ultra Clean USA Semiconductor 338 2,021 Mutual 0.60 - -
Manufacturing
Capital
Equipment
Supplier 2 Advanced USA Module and 248 3,298 Mutual 0.51 - -
Components
Supplier 3 MKS USA Semiconductor 247 8,104 Reverse 0.48 - -
Instruments Manufacturing
Capital
Equipment
Supplier 4 Ichor Holdings USA Semiconductor 316 1,252 Reverse 0.60 - -
Manufacturing
Capital
Equipment
Partner 5 Onto Innovation USA Semiconductor - 3,749 Reverse 0.40 - -
Manufacturing
Capital
Equipment
Customer 6 Taiwan TWN Semiconductor 3,096 578,651 Mutual 0.33 - 1
Semicon Mfg Manufacturing
Services
Supplier 7 Benchmark USA Contract 246 973 Reverse 0.29 - -
Manufacturing
Supplier 8 Brooks USA Semiconductor - 6,647 Reverse 0.56 - -
Automation Manufacturing
Capital
Equipment
Supplier 9 PS Business USA Equity REITs 2 5,617 Reverse -0.05 - -
Parks
Customer 10 Samsung KOR General 3,096 441,252 Direct 0.65 - -
Hardware
Supplier 11 Rorze JPN Semiconductor 81 1,450 Reverse 0.37 - -
Manufacturing
Capital
Equipment
Customer 12 Intel USA Processor - 217,333 Direct 0.35 - -
Semiconductors
Supplier 13 EnPro USA Air, Liquid and - 1,725 Reverse 0.32 - 1
Industries Gas Control
Equipment
Supplier 14 UiPath A USA Enterprise - 28,724 Reverse 0.31 - 1
Management
Software
Partner 15 BE NLD Semiconductor - 6,993 Mutual 0.26 - -
Semiconductor Manufacturing
Inds Capital
Equipment
Supply Chain Report © 2021 FactSet Research Systems Inc. | 1 of 5

Supplier 16 Materion USA Other - 1,461 Reverse 0.26 - -
Specialty/Perfor
mance
Chemical
Manufacturing
Supplier 17 Tokai Carbon KOR Semiconductor - 1,306 Direct 0.32 - -
Korea Manufacturing
Capital
Equipment
Supplier,Partner 18 Foxsemicon TWN Semiconductor - 658 Direct 0.35 - -
Integrated Manufacturing
Capital
Equipment
Customer 19 Atomera USA Other - 544 Reverse 0.07 - -
Specialty/Perfor
mance
Chemical
Manufacturing
Supplier 20 AceCo USA Semiconductors - - Direct - - -
Precision
Manufacturing
LLC
Supplier 21 Jersey Holding USA Miscellaneous - - Direct - - -
Corp. Commercial
Services
Supplier 22 Verity USA Electronic - - Direct - - -
Instruments, Equipment/Instr
Inc. uments
Supplier 23 Techno Quartz JPN Other 37 210 Reverse 0.07 - -
Specialty/Perfor
mance
Chemical
Manufacturing
Partner 24 ASML Holding NLD Semiconductor - 352,693 Reverse -0.12 - -
Manufacturing
Capital
Equipment
Supplier 25 ENGIE FRA Other Electric - 34,599 Direct -0.32 - 2
and Natural
Gas Utilities
Supplier 26 Ping Identity USA IT Infrastructure - 2,104 Reverse -0.17 - -
Holding Software
Supplier 27 Frencken MYS Contract - 745 Direct -0.21 - 1
Group Electronic
Manufacturing
Partner 28 Phoenix Silicon TWN Semiconductor - 258 Reverse 0.07 - -
Intl Manufacturing
Capital
Equipment
Supplier 29 IONES KOR Semiconductor - 216 Reverse -0.01 - -
Manufacturing
Capital
Equipment
Partner 30 Empire State USA General - - Direct - - -
Development Government
Corp.
Supplier 31 FEI Company USA Scientific - - Reverse - - -
Products
Partner 32 Johns Hopkins USA Other - - Direct - - -
University Consumer
Services
Supplier 33 GL Sciences JPN Scientific 37 249 Reverse 0.51 - -
Products
Supplier 34 Ascendas India SGP Equity REITs 5 1,225 Reverse 0.08 - -
Trust
Supplier 35 NIBE Industrier SWE Air, Liquid and - 26,360 Direct -0.24 - -
B Gas Control
Equipment
Supplier 36 NGK Insulators JPN Nonmetallic - 5,668 Direct 0.27 - -
Minerals
Products
Supplier 37 Sumitomo JPN Other - 3,487 Direct 0.35 - -
Heavy Machinery
Industries Manufacturing
Supplier 38 Horiba JPN Industrial - 3,126 Direct -0.01 - -
Machine Parts
and Support
Equipment
Supplier 39 Holon JPN Semiconductor - 128 Reverse 0.15 - -
Manufacturing
Capital
Equipment
Supplier 40 Mind CTI ISR Telecommunica - 66 Reverse 0.09 - -
tions Industry
Software
Supplier 41 NGK SPARK JPN Consumer - 3,274 Direct 0.12 - -
PLUG Vehicle Parts
Manufacturing
Supplier 42 Mersen FRA Primary Metals - 840 Reverse 0.21 - -
Products
Supplier 43 Hana Micron KOR Semiconductor - 526 Reverse 0.06 - -
Manufacturing
Services
Supplier 44 Sinfonia JPN Other - 340 Direct 0.45 - -
Technology Machinery
Manufacturing
Supplier 45 SNT Holdings KOR Consumer - 263 Reverse 0.48 - -
Vehicle Parts
Manufacturing
Supplier 46 E&M ISR Infrastructure - 256 Reverse 0.32 - -
Computing and Network
Consulting
Services
Supplier 47 CHENFULL TWN Other - 163 Direct 0.29 - -
Machinery
Manufacturing

Customer 48 Indopoly IDN Other - 76 Reverse -0.16 - -
Swakarsa Containers and
Packaging
Products
Partner 49 Dialog GBR Analog and - - Direct -0.40 - -
Semiconductor Mixed Signal
Semiconductors
Supplier 50 TRUMPF GmbH DEU Industrial - - Direct - - -
+ Co. KG Machinery
Partner 51 Shanghai Aiko CHN Power - 4,550 Reverse 0.04 - -
Solar A Generation and
Support
Products
Supplier 52 Celestica CAN Contract - 1,145 Reverse -0.06 - -
Electronic
Manufacturing
Supplier 53 SNT MOTIV KOR Consumer - 683 Reverse 0.35 - -
Vehicle Parts
Manufacturing
Customer 54 GigaLane KOR Interconnect - 171 Reverse 0.34 - -
Electronic
Components
Supplier 55 JTP JPN Infrastructure - 39 Reverse 0.36 - -
and Network
Consulting
Services
Supplier 56 Geometric IND Industry-Specifi - - Reverse - - -
Limited c IT Services
Supplier 57 Ham-Let ISR Air, Liquid and - - Reverse - - -
(Israel-Canada) Gas Control
Ltd. Equipment
Partner 58 Indian Institute IND Other - - Direct - - -
of Technology Consumer
Bombay Services
Partner 59 Qingdao Sifang CHN Miscellaneous - - Direct - - -
SRI & Commercial
Intellectual Co., Services
Ltd.
Supplier 60 Stilo GBR Design and - - Reverse - - -
International Engineering
Limited Software
Partner 61 Tyndall National IRL Other - - Direct - - -
Institute Consumer
Services
Rel Type Rel Rank Company Ctry Industry 1D Return 1W Return 2W Return 1M Return 3M Return 6M Return 1Y Return 5Y Return
Supplier 1 Ultra Clean USA Semiconduct -3.36 0.38 3.13 -5.02 -19.45 6.45 123.59 530.55
or
Manufacturin
g Capital
Equipment
Supplier 2 Advanced USA Module and -3.78 -4.12 -2.10 -8.64 -16.49 -10.58 45.20 89.37
Energy Inds Subassembl
y
Components
Supplier 3 MKS USA Semiconduct -2.21 0.76 1.66 -6.70 -18.50 -2.96 37.22 213.33
Instruments or
Manufacturin
g Capital
Equipment
Supplier 4 Ichor USA Semiconduct -4.44 -3.83 6.41 -4.27 -19.15 13.00 109.89 -
Holdings or
Manufacturin
g Capital
Equipment
Partner 5 Onto USA Semiconduct -4.02 1.30 4.59 -1.45 5.93 36.62 160.17 259.47
Innovation or
Manufacturin
g Capital
Equipment
Customer 6 Taiwan TWN Semiconduct -0.64 0.98 5.81 4.74 5.53 4.37 46.33 293.92
Semicon or
Mfg Manufacturin
g Services
Supplier 7 Benchmark USA Contract -1.58 1.37 5.23 3.25 -11.49 -8.10 42.19 21.99
Manufacturin
g
Supplier 8 Brooks USA Semiconduct -1.05 4.95 8.92 5.09 -9.85 20.38 102.56 642.03
Automation or
Manufacturin
g Capital
Equipment
Supplier 9 PS Business USA Equity REITs 1.54 0.91 6.50 5.27 1.57 9.06 34.87 63.86
Parks
Customer 10 Samsung KOR General 0.26 -0.65 0.79 -6.38 -6.42 -6.13 35.19 169.52
Hardware
2W TR 1M TR 3M TR 6M TR 1Y TR
Rel Type Rel Rank Company Ctry Industry 2W Corr. 1M Corr. 3M Corr. 6M Corr. 1Y Corr. Corr. Corr. Corr. Corr. Corr.
Supplier 1 Ultra USA Semicond 0.89 0.88 0.60 0.31 0.95 0.89 0.89 0.59 0.30 0.95
Clean uctor
Manufactu
ring
Capital
Equipment

Supplier 2 Advanced USA Module 0.67 0.91 0.51 0.22 0.70 0.67 0.91 0.50 0.22 0.70
Energy and
Inds Subassem
bly
Compone
nts
Supplier 3 MKS USA Semicond 0.98 0.92 0.48 0.14 0.83 0.98 0.91 0.47 0.13 0.84
Instrument uctor
s Manufactu
ring
Capital
Equipment
Supplier 4 Ichor USA Semicond 0.60 0.86 0.60 0.43 0.95 0.60 0.86 0.60 0.42 0.95
Holdings uctor
Manufactu
ring
Capital
Equipment
Partner 5 Onto USA Semicond 0.72 0.85 0.40 0.77 0.98 0.72 0.85 0.42 0.78 0.98
Innovation uctor
Manufactu
ring
Capital
Equipment
Customer 6 Taiwan TWN Semicond 0.50 0.57 0.33 0.22 0.86 0.50 0.59 0.34 0.27 0.87
Semicon uctor
Mfg Manufactu
ring
Services
Supplier 7 Benchmar USA Contract 0.72 0.60 0.29 -0.24 0.80 0.72 0.62 0.30 -0.23 0.82
k Electronic
Electronic Manufactu
s ring
Supplier 8 Brooks USA Semicond 0.45 0.74 0.56 0.49 0.94 0.45 0.75 0.55 0.49 0.94
Automatio uctor
n Manufactu
ring
Capital
Equipment
Supplier 9 PS USA Equity 0.35 0.22 -0.05 0.20 0.94 0.35 0.24 -0.05 0.28 0.95
Business REITs
Parks
Customer 10 Samsung KOR General 0.00 0.81 0.65 0.02 0.80 0.00 0.80 0.65 0.07 0.82
Electronic Computer
s Hardware
LT Debt Interest Liquidity

Rel Type Rel Rank Company Ctry Industry /Equity Coverage 1Y CDS 5Y CDS Moody's S&P Outlook
Supplier 1 Ultra Clean USA Semiconducto 0.82 7.13 - - B1 B+ Stable
r
Manufacturing
Capital
Equipment
Supplier 2 Advanced USA Module and 0.45 42.06 - - - - Stable
Components
Supplier 3 MKS USA Semiconducto 0.38 23.09 - - Ba1 BB+ Stable
Instruments r
Manufacturing
Capital
Equipment
Supplier 4 Ichor USA Semiconducto 0.35 9.19 - - - - Stable
Holdings r
Manufacturing
Capital
Equipment
Partner 5 Onto USA Semiconducto 0.01 - - - - - Stable
Innovation r
Manufacturing
Capital
Equipment
Customer 6 Taiwan TWN Semiconducto 0.22 203.10 - - Aa3 AA- Positive
Semicon Mfg r
Manufacturing
Services
Supplier 7 Benchmark USA Contract 0.21 4.87 - - WR NR Stable
Manufacturing
Supplier 8 Brooks USA Semiconducto 0.07 67.49 - - Ba3 BB- Stable
Automation r
Manufacturing
Capital
Equipment
Supplier 9 PS Business USA Equity REITs 0.00 - - - WR A- Stable
Parks
Customer 10 Samsung KOR General 0.01 86.27 3.75 17.91 WR AA-
Hardware
Comps - Overlapping Relationships (Top 10)
Rel Type Rel Rank Company Rel Value ($) Relationship

Supplier 1 Ultra Clean - 0
Supplier 2 Advanced Energy Inds - 0
Supplier 3 MKS Instruments - 0
Supplier 4 Ichor Holdings - 0
Partner 5 Onto Innovation - 0
Customer 6 Taiwan Semicon Mfg - 0
Supplier 7 Benchmark Electronics - 0
Supplier 8 Brooks Automation - 0
Supplier 9 PS Business Parks - 0

Customer 10 Samsung Electronics - 0
News Stories for Related Companies (Top 10 Relationships, 1 month)
08 Sep '21
8:12a AEIS Supplier Advanced Energy Industries names Eduardo
Bernal as COO ($89.33, 0.00)
02 Sep '21
9:12p 2330-TW Customer Taiwan Semiconductor notifies its customers of
price increase- JRJ.com (NT$607.00, 0.00)
01 Sep '21
5:15p PSB Supplier PS Business Parks, Inc. announces acquisition of
Port America in Texas for total purchase price of
$123M ($159.75, 0.00)
28 Aug '21
7:00p 005930-KR Customer Musk, Amazon and Samsung to oppose Nvidia's
plan to buy semiconductor designer Arm -
Telegraph, citing sources
24 Aug '21
4:08p PSB Supplier PS Business Parks announces amendment and
restatement of unsecured revolving credit facility
($150.47, 0.00)
2:25a 005930-KR Customer Samsung Group to invest KRW240T on expansion
over next three years - Reuters
23 Aug '21
9:08p 005930-KR Customer Samsung reconsidering plans of buying NXP
Semiconductors - Sammobile (earlier) ($210.63,
0.00)
9:06a BRKS Supplier Brooks Automation discloses David Jarzynka has
decided to withdraw as incoming CEO of new
semiconductor automation company - 8-K ($78.39,
0.00)
18 Aug '21
1:57p 2330-TW Customer GlobalFoundries said to have filed confidentially for
IPO in the US -- Reuters
16 Aug '21
12:38a 2330-TW Customer Intel pushing chip factories to governments
globally - WSJ (14-Aug) ($53.49, 0.00)
12 Aug '21
2:01a 005930-KR Customer Korean DRAM makers trading lower; concerns of a
slowdown in memory demand and price decline of
DRAM
10 Aug '21
7:59a 2330-TW Customer Taiwan Semiconductor board approves Q2
dividend of NT$2.75/share (NT$591.00, 0.00)

Upcoming Events
EPS Sales
Date Time Type Description Actual Mean Surprise(%) Actual Mean Surprise(%)
10 Sep '21 12:45 PM Deutsche Bank Technology Conference - Fireside Chat
15 Sep '21 01:00 PM Citi Global Technology Conference - Fireside Chat
15 Sep '21 01:00 PM Citi Global Technology Conference
21 Sep '21 12:00 PM J.P. Morgan U.S. All Stars Conference - Fireside Chat
18 Nov '21 - Q4 2021 Earnings Call - 1.96 - - 6,377 -
18 Nov '21 - Q4 2021 Earnings Release - 1.96 - - 6,377 -
16 Feb '22 - Q1 2022 Earnings Release (Projected) - 2.01 - - 6,509 -
19 May '22 - Q2 2022 Earnings Release (Projected) - 2.01 - - 6,552 -
18 Aug '22 - Q3 2022 Earnings Release (Projected) - 2.07 - - 6,690 -
17 Nov '22 - Q4 2022 Earnings Release (Projected) - 2.10 - - 6,762 -
Past Events
EPS Sales
Date Time Type Description Actual Mean Surprise(%) Actual Mean Surprise(%)
24 Aug '21 12:45 PM Needham SemiCap and EDA conference - Fireside Chat
19 Aug '21 04:30 PM Q3 2021 Earnings Call 1.90 1.77 7.16 6,196 5,936 4.39
09 Jun '21 01:45 PM Bank of America Global Technology Conference
08 Jun '21 12:00 PM Exane BNP Paribas European CEO Conference
07 Jun '21 02:00 PM Evercore TMT Conference
02 Jun '21 04:30 PM Bernstein Strategic Decisions Conference
01 Jun '21 11:10 AM Cowen Technology, Media & Telecom Conference
24 May '21 02:00 PM J.P. Morgan Global Virtual Technology, Media and Communications Conference
20 May '21 04:30 PM Q2 2021 Earnings Call 1.63 1.51 7.95 5,582 5,409 3.20
06 Apr '21 11:00 AM Analyst Meeting
11 Mar '21 - Annual General Meeting
02 Mar '21 01:15 PM Morgan Stanley Technology, Media and Telecom Conference
18 Feb '21 04:30 PM Q1 2021 Earnings Call 1.39 1.28 8.67 5,162 4,980 3.66
10 Dec '20 11:00 AM Barclays Global Technology, Media and Telecommunications Conference
02 Dec '20 02:40 PM Wells Fargo TMT Summit
02 Dec '20 11:30 AM NASDAQ Virtual Investor Conference
01 Dec '20 12:10 PM Credit Suisse Technology Conference
12 Nov '20 04:30 PM Q4 2020 Earnings Call 1.25 1.17 6.76 4,688 4,603 1.84
1
© 2021 Factset Research Systems Inc.
StreetAccount
Barron's Summary
Saturday, August 28, 2021 07:32:39 PM (GMT)
The following summary highlights stories reported by Barron's that are likely to influence trading this week.
Cover:
Chinese stocks have been plummeting after some surprising anti-capitalist moves in the past several
months. China hasn't become uninvestable though, just more complicated. "Stocks to watch": Alibaba
(9988.HK), Tencent Holdings (700.HK), Yum China Holdings (9987.HK). Positive mentions for:
Chailease Holding (5871.TT), Silergy (6415.TT), Jiangsu Hengrui Medicine (600276.CH) (link).
Features:
Berry Global Corp (BERY): Barron's is positive on this plastic-packaging maker, which has been hurt by
acquisition debt and an out-of-favor product. Don't write off Berry just because it makes plastics -- doing
so overlooks changing industry practices and ignores what has been one of the most sturdy materials
stocks. Its valuation is low enough that the stock should grow in line with earnings, or ~9% a year.
Changing investor perceptions, lower debt, and adding a dividend could all boost that return (link).
Plantronics (POLY): Barron's is positive on Plantronics (a.k.a. Poly), producer of conference-room
products and office headsets, as a play on the expected surge in "hybrid meetings" -- mixing in-person
and virtual participants. The stock is deeply discounted following an ill-fated merger three years ago, and
could climb as supply-chain issues abate (link).
With the stock market expensive, Leuthold's Doug Ramsey has been favoring small- and mid-caps and
markets outside the U.S. Also positive mentions for: Goldman Sachs,(GS), Morgan Stanley (MS), Lam
Research (LRCX), Applied Materials (AMAT), D.R. Horton (DHI), PulteGroup (PHM) (link).
Owning U.S.-listed Chinese stocks is increasingly risky. Investors still bullish on the Chinese economy
can buy shares on domestic exchanges instead. Several big brokerage firms allow direct access to
foreign markets. (link).
100 Years of Barron's: What the boom-and-bust history of the U.S. housing market can tell us about he
current boom (link).
SPAC listings came to a screeching halt after accounting guidance from the SEC prompted companies to
restate financials. Bankers and lawyers say the slowdown is temporary, and a bounceback is coming
later this year. Don't expect the torrid pace of earlier this year (link).
Columns:
The Trader: Fed Chair Powell didn't assuaged investors by not saying much of anything new.
Technology Trader: The resurgence of the humble PC have HP Inc. (HPQ) and Dell Technologies
(DELL) looking cheap.
Up and Down Wall Street: Fed Chair Powell's dovish comments on bond buying and interest rates set the
table for more stock gains.
Up and Down Wall Street: Commodities look appealing after their pullback from May highs. Positive
mentions for: BHP (BHP), Rio Tinto (RIO), Anglo American (NGLOY), Freeport-McMoRan (FCX).
Feature: ConocoPhillips (COP) director R.A. Walker recently make the company's biggest insider share
purchase in years.
Emerging Markets: In Brazil, Covid is receding and the economy is rebounding. Unfortunately, inflation is
returning with the V-shaped recovery. The iShares MSCI Brazil is up 17% from a March low, and the good
news now look priced in. However, positive mentions for: Totvs (TOTS3.BZ), Mobly (MBLY3.BZ), and
PTG Pactual (BPAC3.BZ).
Income Investing: ESG becoming a bigger consideration for equity income funds.
International Trader (Europe): Positive on Synthomer (SYNT.LN), a British-based chemical manufacturer
that makes latex for medical gloves. Its shares can continue to rise as it grabs significant market share in
the still-tight latex market.
Commodities Corner: Water is getting more expensive. That's an opportunity for firms that have "more
embedded water technology" such as Xylem (XYL), Evoqua Water Technologies ( AQUA ), Danaher
(DHR), and Mueller Water Products (MWA).
The Trader: Home prices have risen sharply, but still have a long way to go before reaching 2007 bubble
levels. These stocks could still have legs: Toll Brothers (TOL), D.R. Horton (DHI), Lennar (LEN), NVR
(NVR), PulteGroup (PHM), Johnson Controls (JCI), Carrier Global (CARR), Allegion (ALLE).
The Trader: Down from Covid highs, Lululemon (LULU) could be poised for an upside move following its
Q2 earnings report on 8-Sep.
Up and Down Wall Street: The SPAC frenzy has cooled, creating opportunities for investors in two types
of SPACs: those seeking deals and those that have already announced them. Pre-deal issues feature
yields of 2-4% with the option to participate in a successful deal. Positive mention for Ardagh Metal
Packaging (AMBP), a global maker of aluminum cans, which just merged with a SPAC and trades at a
big discount to rivals like Ball Corp (BALL).
Up and Down Wall Street: Positive on Hertz (HTZZ) after a strong Q2 and possibly stronger Q3. It's 30-
year warrants - a call option with an exercise price of $13.80 -look even better than the stock.
Power Play: Starboard's proxy battle for Box (BOX) enters the final innings as a close game.
Other Voices: Paul Polman, former CEO of Unilever and a U.N.-appointed sustainable-development goals
advocate, writes that big banks are still funding climate disaster, and businesses need to push back.
Striking Price: Bitcoin Proxy MicroStrategy (MSTR) is trading well below the striking price, setting up a
high-risk, high-reward situation for aggressive traders.
Fund Profile: The Cambiar Opportunity fund seeks out well-managed, intellectual-property-driven
businesses whose stocks represent good value. Positive mentions for: Mastercard (MA), American
Express (AXP), Biogen (BIIB).
Reference Links:
Barron’s
Industries: Unspecified, Chemical Manufacturing, Constr. - Supplies & Fixtures, Construction Services, Misc. Capital
Goods, Chemicals - Plastics & Rubber, Containers & Packaging, Oil & Gas Integrated, Consumer Financial Services,
Investment Services, Misc. Financial Services, Biotechnology & Drugs, Medical Equipment & Supplies, Business
Services, Iron & Steel, Restaurants, Retail (Apparel), Metal Mining, Waste Management Services, Communications
Equipment, Computer Peripherals, Computer & Internet Services, Electronic Instruments & Controls, Semiconductors,
Software & Programming
Primary Identifiers: 5871-TW, 6415-TW, 700-HK, AAL-GB, ALLE-US, AMAT-US, AMBP-US, AQUA-US, AXP-US,
BABA-US, BERY-US, BIIB-US, BOX-US, BPAC11-BR, CARR-US, COP-US, DHI-US, DHR-US, FCX-US, GS-US, HPQ-
US, JCI-US, LEN-US, LRCX-US, LULU-US, MA-US, MBLY3-BR, MS-US, MSTR-US, MWA-US, NVR-US, PHM-US,
POLY-US, RIO-AU, RIO-GB, SYNT-GB, TOL-US, TOTS3-BR, XYL-US, YUMC-US
Related Identifiers: 5871-TW, 6415-TW, 700-HK, AAL-GB, ALLE-US, AMAT-US, AMBP-US, AQUA-US, AXP-US,
BABA-US, BERY-US, BIIB-US, BOX-US, BPAC11-BR, CARR-US, COP-US, DHI-US, DHR-US, FCX-US, GS-US, HPQ-
US, JCI-US, LEN-US, LRCX-US, LULU-US, MA-US, MBLY3-BR, MS-US, MSTR-US, MWA-US, NVR-US, PHM-US,
POLY-US, RIO-AU, RIO-GB, SYNT-GB, TOL-US, TOTS3-BR, XYL-US, YUMC-US
Subjects: Conjecture, Media Summaries, Barron's Summary, Published Reports
Applied Materials Q4 guidance details -- conf call ($129.20, 0.00)
Thursday, August 19, 2021 08:53:41 PM (GMT)
Additional Q4 guidance details:

Segment sales:
Semiconductors Systems ~$4.60B vs FactSet $4.32B
AGS $1.30B vs FS $1.27B
Display $400M vs FS $427.5M
Non-GAAP gross margin ~48% vs FS 47.7%
Industries: Semiconductors
Primary Identifiers: AMAT-US
Related Identifiers: AMAT-US
Subjects: All Earnings, Earnings Guidance
Related Stories:
StreetAccount Metrics Recap - Applied Materials Q3 Earnings ($129.20, 0.00)
Applied Materials reports Q3 EPS $1.90 ex-items vs FactSet $1.77 [23 est, $1.75-1.85] ($129.20, 0.00)
Applied Materials initiated outperform at Daiwa ($127.37, 0.00)
Target is $140, 10% upside (FactSet average target ~$161; range $125-195)
Analyst is Louis Miscioscia
Subjects: Other Notable Research
Reports Q3:
Revenue $6.20B vs FactSet $5.94B [20 est, $5.90-6.06B ]
Q4 Guidance:
EPS $1.87-2.01 ex-items vs FactSet $1.81 [23 est, $1.72-1.92 ]
Revenue ~$6.33B +/- $250M vs FactSet $6.04B [20 est, $5.82-6.29B ]
Reference Links:
Applied Materials Announces Third Quarter 2021 Results
Subjects: All Earnings, Earnings Guidance, Top Stories
StreetAccount Metrics Recap - Applied Materials Q3 Earnings ($129.20, 0.00)
Key operating metrics:

Revenue
Semiconductor Systems $4.45B vs FactSet $4.27B
Applied Global Services $1.29B vs FS $1.24B
Display and Adjacent Markets $453M vs FS $416.0M
Non-GAAP gross margin 48.0% vs FS 47.7% and year-ago 45%
Non-GAAP operating margin 32.7% vs FS 32.1% and year-ago 26.4%
Operating cash flow $1.69B
Subjects: All Earnings
Related Stories:
StreetAccount Consensus Metrics Preview - Applied Materials Q3 Earnings ($129.90, 0.00)
Transcripts
Corrected Transcript
24-Aug-2021
Applied Materials, Inc. (AMAT)

Needham SemiCap and EDA conference - Fireside Chat
Total Pages: 15
1-877-FACTSET www.callstreet.com Copyright © 2001-2021 FactSet CallStreet, LLC
Applied Materials, Inc. (AMAT) Corrected Transcript
Needham SemiCap and EDA conference - Fireside Chat 24-Aug-2021
CORPORATE PARTICIPANTS
Daniel J. Durn
Chief Financial Officer & Senior Vice President, Applied Materials, Inc.
.....................................................................................................................................................................................................................................................................
OTHER PARTICIPANTS
Quinn Bolton
Analyst, Needham & Co. LLC
.....................................................................................................................................................................................................................................................................
MANAGEMENT DISCUSSION SECTION
Quinn Bolton
Good afternoon and welcome, everybody. I'm Quinn Bolton with Needham & Company. I follow the
semiconductor and Semiconductor Capital Equipment Day. Thank you, all, for joining us at Needham's Second
Annual Virtual SemiCap and EDA Conference. It's my pleasure to host this fireside chat with the management
team of Applied Materials. With me today from the company are CFO, Dan Durn; and Vice President of Investor
Relations, Mike Sullivan.
I'd like to remind everybody participating in the webcast that if you have any questions for Dan or Mike, please
submit those questions at the bottom of your screen and we'll try to work those into the fireside chat. So, with that,
we'll go ahead and get started with the first questions.
2
QUESTION AND ANSWER SECTION

Quinn Bolton
Analyst, Needham & Co. LLC Q
Dan, obviously, the company reported strong results and outlook last Thursday, but maybe just to level set folks,
can you sort of remind us of your thoughts on the WFE environment looking into the second half and which
segments within WFE are growing fastest this year.
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Chief Financial Officer & Senior Vice President, Applied Materials, Inc. A
Sure. So – and thanks for the opportunity to join you, Quinn. We really appreciate it. So, from a WFE trend
standpoint, what we saw exiting 2020, WFE was up sort of 18%, landed at about $61-plus billion. And what we
see now is WFE this year over $80 billion. So, call it up mid-30s plus/minus. And against that opportunity, in the
first two quarters of the calendar year, plus the midpoint of our guide, against that market that we think is growing
mid-30s, our Semi Systems business is up over 50% in those first three quarters of the calendar year. So, we feel
good about how we're performing relative to that opportunity.
In terms of drivers of growth this year, we think both foundry, logic and DRAM are above the industry average.
NAND will grow but will grow below the industry average. As we think of profile throughout the year, I think what's
clear to us given where we sit today, foundry, logic and DRAM are going to be second half weighted relative to
first half. And the shape of NAND, I think there's more of a question mark, is it going to be flat? Is it going to be
down a little bit? It's really too close to tell at this point where that ultimately shakes out but it's going to be
somewhere in that category.
I think that gives you a good sense of how we're thinking about this year. And then as we look into 2022, our view
is, is that WFE in 2022 is up over 2021. But I think it's premature to talk about shape within 2022 or by device
type. And against that opportunity, we would expect our business, all three reporting segments whether it's Semi
Systems, Services or Display, to be up as we look into 2022. So, we think we're set up well against this
opportunity.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
You've mentioned the NAND second half outlook. It's a little too hard to call whether it's flat, whether it's down a
little bit. It doesn't sound like if it's down, it's down a lot. But are there projects within NAND that sort of fall near
year-end that could pull into late 2021 or push into 2022 that makes some of that precision difficult, or is it really
just you're really sort of cutting a pretty fine line between it's flat or maybe down low-single-digit percent this year
– or sorry, second half versus first half?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. I think it's more of the latter. I think it's a pretty fine line. It's hard to be precise with six months to go but
you're going to be in that zip code. What I would say is, is that we haven't seen very much change in what our
customers are expecting to do this year. We just want to watch the market, see how things develop, and then take
a point of view when we've got just a bit more precision around that ultimate visibility. But it's less about calendar
3
Q4, calendar Q1 and things pushing and pulling out across the calendar year. And to us, it's more of just trying to
be – finally slide how it ultimately ends up and profile second half to first half.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Understood. On the call, you talked about increased confidence in 2022 being a growth year over the past 90
days. Can you talk about some of the factors that have driven that increased level of confidence in 2022 being a
growth year?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Sure. So, I think the best place to start, if we were to go back a couple of quarters and just look at the underlying
demand of the market, this is based on our bottoms up modeling in the different end markets but also
conversations we have with customers, I would say the natural level of demand showed an up profile of 2022
versus 2021.
As I roll the clock forward to where we are today, and that confidence interval in the last three months going up
that we see an upward trend of WFE, what's become increasingly clear to us is there is going to be unmet
demand this year as a result of some of the supply chain challenges we see. This isn't an Applied comment, I
think this is an overall semi-cap equipment comment. As a result of that, I think there's going to be unmet demand
this year that slides into next year, and that increases the confidence in our perspective that next year will be up
over this year.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
And I guess thinking about that unmet demand, I think ASML and KLA have both sort of said they're sold out or
ASML's certainly capacity constrained well into 2022. Do you think that that's sort of affecting the timing of
deliveries or projects in 2021 that could affect the timing of other process equipment delivery either this year or
next year?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So we really don't see that impact. And the reason I say that is, if we think about lithography machines that
went into factories or were revenue-ed a year, 18 months ago, that's really where our process tools are
surrounding right now because there's a 12- to 18-month offset in the timing of how facilities get built and
facilitized and factory equipment gets on the floor.
So – and we said this in 2018 on the early stages of the EUV ramp and what was happening from a lithography
standpoint, we said this is going to be a good lead indicator for our business into 2019 and 2020. And so, as EUV
has profiled well over the last couple of years, you've seen us doing record foundry/logic sales into our customers'
footprint.
So what I would say is, is the capacity limitations that they're experiencing today, I think those get alleviated here
over the next year. And given the timing offset of what we do and what they do, I would expect it to have a little
impact. But I do see the robustness of their business being a good lead indicator for us towards the end of 2022
and into 2023 and 2024. I think that setup around the timing difference bodes well in the out-years for us in our
business.
4
Quinn Bolton
Thanks. That's sort of a good lead-in to my next question which is just your thoughts sort of around longer-term
sustainability of WFE and maybe your thoughts on rising capital intensity, as well as the trend towards localization
of semiconductor manufacturing. How do those two trends drive the longer-term outlook for WFE?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So, I would say there's probably three factors that shape a perspective around long-term trend in WFE. I
think the secular drivers around semi as being on the critical path of the digital transformation of the global
economy, I think that trend is alive and well and semiconductors five years from now are certainly going to be
more important than they are today and certainly more important than they were five years ago. That trend line for
us over the next decade is pretty clear.
When I look at the technology road maps and the pivotal way from a power performance road map that is 2D
shrink driven in nature to something that companies are talking about; Gary calls it the new playbook for the
PPACt road map. But you see a lot of similarities in the messaging of our customers with our view around this,
new architectures, new materials, new structures going vertical and chip, new types of packaging, new ways to
shrink. There's multiple elements to how the power performance road map's going to be driven going forward.
That's going to lead to a natural upward bias from a capital intensity standpoint.
The third of the three elements that I point to is how capacity and supply comes on line globally. My fundamental
view is global supply will meet global demand. Today, the most efficient way to deploy that capacity, the most
capital-efficient way to deploy that capacity is to have large facilities clustered geographically. That's an efficient
model.
As governments increasingly come to the recognition that semiconductors are critical to economic growth and
national security and you can't have a modern economy without a secure supply of semis, I think the way that
global supply comes on line is going to change going forward. And I think you're going to see a more regional
distribution of that global supply.
Supply will still meet demand, but it's going to be deployed differently and it's going to be distributed
geographically. As it gets distributed geographically, I think you're going to see more smaller-scale facilities
around the globe. When you take what is today a very efficient way to deploy capacity and bring supply on line
and morph it to more smaller-scale facilities, that's going to lead it to a natural upward bias in capital intensity over
time, and we think that's going to serve our business well.
The other thing that I like about this trend towards regionalized supply, when our customers operate outside of
their home geographies, I think the natural services entitlement on that capacity footprint is greater than what we
see in the home geography and should create a nice upward bias on our services business as well.
So I'm encouraged by this trend around regionalized supply. But those three drivers, secular trends, complexity of
the road map and now regionalization of supply, I think create nice upward bias over time in capital intensity.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
5
Got it. And it sounds like that government subsidies or government support will have to help offset the lower
efficiency of these smaller regional fabs. So whatever comes in a form of accelerated depreciation, there'll be
ways the governments find to provide that assistance to the local manufacturers?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
I think that's exactly right, Quinn. I think the governments are going to play a role to incentivize our customers and
make them economically neutral or economically indifferent between the way they deploy capacity today, large-
scale clustered facilities, to more geographically distributed, governments will play a role in neutralizing that
economic equation for our customers. And the implication is, is there's that upward bias from a capital intensity
standpoint.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Great. Wanted to turn to China and your thoughts on China WFE and sort of again sort of thoughts by segment. I
know it's become a big geography for many of the leading equipment vendors. So how broad-based is that
demand in China?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So I would say, China continues to do what they've been doing for several years. I think their level of spend
is broad across the device types. There's meaningful spending in foundry/logic, meaningful spending in DRAM,
meaningful spending in NAND. This year, I think there's a weighting towards foundry/logic. I think there's a long
list of customers within foundry/logic who are bringing on capacity at more mature nodes and efficiently getting
into the production business.
But if I look at the aggregate level of spend, I do think it grows a little more than the overall WFE this year. But it's
still not a lot of spend from a capacity deployment standpoint. You're seeing some of that come on line in the
more mature node profiles of foundry/logic, what we call the ICAPS market. But it's not a hockey stick of
investments leading to a large deployment of capacity.
So the way we describe what we see, and I think we've been fairly consistent about this from year-to-year, we see
a slow steady building of an ecosystem. We see investments in that ecosystem in the technology road maps. And
where they have success from a technology road map, you're seeing modest deployments of capacity behind
those road maps. So they seem to be building the foundation of an industry in a fairly disciplined, consistent way,
and we see this year profiling very similarly.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
And do you think that that growth in China WFE, does that follow the overall market trend and is up in 2022?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. I would expect it to profile similarly from a growth rate standpoint to what we see for the broader market.
We'll continue to keep an eye on it. We'll update it from time to time to the extent the perspective changes. But
right now, I don't see anything asymmetric out of the market from a 2022 perspective.
.....................................................................................................................................................................................................................................................................
6
Quinn Bolton
Great. My last sort of big-picture question is just as you look at the China business and it becomes more
important or a larger geography for Applied Materials, how concerned are you about an expansion of US export
controls to a larger number of Chinese manufacturers?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So, not surprisingly, I'm not going to speculate on sort of illustrative scenarios, but how we think about our
business and the position we have as a market leader, clearly, we've got conversations and are plugged in with
both the respective governments in the geographies we operate in. Our strong point of view is economic growth is
optimized when free and fair trade is at the core of global economic flows and protection of IP defines the way
companies interact.
At the core of that stronger economic growth is an emphasis on innovation, and we think we're incredibly well
positioned to do well when innovation is the true basis of competition. So, we've been strong in our point of view
and emphasizing that we all win together when economic growth is optimized around consistent set of economic
principles. And so, rather than speculate on illustrative scenarios, I think we, as a management team, what we do
is just leverage our global footprint and optimize around agility that as the landscape shifts in whatever direction it
shifts, that we can reposition the company as quickly as possible to respond to whatever it is that we see that
shapes our markets so that on an absolute and relative basis we're optimizing outcomes for shareholders. So,
we'll stay focused on the things that we can control and obviously express our point of view along the way on
what we think yields the best outcomes for everybody.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Wanted to shift gears to sort of the supply chain and constraints in the supply chain and maybe to start, can you
talk about your level of comfort with this sort of supply chain capacity of components or subsystems from your
vendors versus kind of bricks and mortar or manufacturing capacity at the company.
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So, if we take it in a couple of pieces, clearly, as a result of the pandemic, there's been some influencing in
our markets. From a demand standpoint, we've seen an acceleration of the digitization of the global economy. I
think that trend is here to stay and creates a nice secular trend. I think what we've also seen as a result of the
pandemic and the world coming back into doing business again, there's pockets of nonlinearity that get created
which are temporary in nature. And our industry and others are beginning to work their way through that.
And so, you've got the permanent. You've got the temporary. How we're dealing with it as a company,
semiconductor devices, chips, there's clearly pockets of nonlinearity. I think if you look at our customers'
customers and the things that they talk about, you can see pretty clearly, I think, where maybe some of that
comes from. There's other things along the way. We've been managing it for the past 18 months or since the
beginning of the pandemic.
What I like about the way the company has been able to navigate that environment, I think we saw what needed
to happen from an internal capacity standpoint. Pockets of nonlinearity create intra-quarter peaks in activity levels
in the company. We made decisions early on to raise our labor levels inside of our factories. We've been investing
7
in our facilities for 18 months to 2 years in response to what we saw around these secular growth trends to keep
our physical infrastructure ahead of customer demand.
And I think what we're dealing with now are these pockets of nonlinearity. I think it leads to maybe some unmet
demand this year that slides into next year but the company has done a good job managing in this fluid
environment. You see it not only from an outperformance at the top line, but you also see the flow-through in the
way in which we've managed the business from a margin structure and cash flow standpoint.
So we'll stay on top of it. We'll stay very, very focused to continue to drive results the best we can in this
environment. And I would say it's – into 2022, the world gets far healthier from a supply chain standpoint. We get
back to a more normalized way of operating. So, it probably persists for the better part of this year and then look
to get incrementally healthier as we profile throughout 2022.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
And I guess the recent spread of the Delta variant of COVID, especially in some Southeast Asian countries, seem
to cause an uptick in disruptions late June, early July. Do you see those disruptions continuing? Do you think that
vaccination of critical employees is at the point now where maybe we're past the peak impact from Delta in
Malaysia and other Southeast Asian countries?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So, it's hard to say. It's hard to say because a lot of what we saw in the Malaysia situation as a result of the
Delta variant was related to the supply chain. And so, hard for us to know sort of the philosophical approach and
the availability of high-quality vaccines, and the ability and the uptake of that to impact those rolling hot spots.
And so, there's going to be a number of factors that go into it. We're staying close with our suppliers. We're
managing it the best way we can. But certainly, there were some disruptions at the most recent quarter as a result
of the situation that you talked about. And we'll just try to manage through it the best way we can. But certainly,
the availability of effective vaccines and then the philosophical approach and uptake of those vaccines, broadly
speaking, throughout the ecosystem is going to influence the outcomes. But I – it's hard for me to say with
precision exactly how that ends up.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Wanted to switch to sort of the memory outlook. I know your market share is pretty even across the three major
device types, but with DRAM spot market pricing seen accelerating declines over the past month or so, there
seems to be increasing consternation in the market about the memory outlook, particularly DRAM. And so, I
guess, maybe share with us your thoughts on DRAM supply/demand as we exit 2021 into 2022. Do you think
there's a threat of overcapacity in DRAM. And I'll ask in a second the same question around NAND.
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So I think we have to disaggregate spot market for our customers and the devices that they make and then
what we see from a capacity deployment standpoint because they operate on different time horizons. I know
there's this debate around strength of the spot market, whether its underlying demand or whether underlying
demand of these devices in DRAM are being influenced by a supply chain that hasn't fully found its [indiscernible]
8
(00:22:10) equilibrium. And I'll leave that debate for the customers and those that are much closer to the spot
market.
As I look the supply/demand balance this year, the DRAM markets are typically mid- to high-teens supply/demand
balance. This year, I would say, supply lags demand. I will put demand over the top end of that range in the low-
20s. I will put supply at the higher end of that range high-teens. But clearly, there's more demand than, I think,
supply. We'll see supply this year. You'll see a profile of investments. There's no material change to what we see
happening in the back half of our calendar year. There's no material change to the customers' plans versus our
view a quarter or two ago, so those plans and the investment profile.
I look at sort of what happened in NAND last year. Back half of calendar 2020 was very strong for NAND and you
saw that strength persist into Q1. DRAM, you're going to see stronger spend in the back part of the year. That's
going to bring your market more in balance. And I think you operate more in balance from a supply/demand
standpoint as I look at 2022. Again, we'll keep an eye on it. We'll share our perspectives along the way, but that's
the setup that I see from a DRAM perspective.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Okay. And any thoughts on the NAND supply/demand environment?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So I'd say supply/demand balance, mid-30s, plus or minus. I think the market is more balanced than, say,
DRAM, where you've got a bit of undersupply going on. And I would say the balance is more towards the higher
end of that range, so, call it, upper-30s this year. But balance, from a market perspective, I think that leads to the
spend profile we talked about earlier in the conversation. And I do like the discipline that I see out of the customer
set exposed to both the NAND and DRAM market. That behavior pattern I find very healthy, and I would expect
the supply/demand balance in the NAND market to persist into 2022.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Wanted to turn to sort of the company's outperformance relative to WFE last year and again in 2021 year-to-date.
And I think you stated, or Gary stated, the company's mission is to be the PPACt enablement company focused
on leveraging your broad portfolio of solutions to integrate and co-optimize. Can you spend maybe a couple of
minutes talking about some of the areas where you see the company best positioned to gain share, whether it's
advanced foundry/logic or logic like technologies moving into the DRAM segment?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So this is where I really like the positioning of the company. Company outperformed in 2019; we
outperformed again in 2020; we're outperforming again this year. And if you look at the composition of that spend,
let's take 2020, for instance, that was a year where WFE was growing around 18%. Our systems business was up
over 26%. NAND was the driver of growth. Foundry/logic under-grew the market.
If you window to 2021, what you see around setup of the market, we talk about a market that's growing mid-30s,
you talk about foundry/logic being a strong driver of growth and NAND under-growing the overall market –
9
growing, but under-growing the overall market. It's almost the opposite, the mirror image of what happened in
2020. And against that opportunity, you see our systems business outperforming.
So I like the balance of our business against a variety of spend environments. I worry a lot less about what device
type happens to be spending. We're almost agnostic across those device types. What I do see is strong position
at the respective customers.
And I look at the node-over-node opportunity, whether it's foundry/logic or it's memory. I see us well-positioned to
increase our opportunity node-over-node. And we've seen that play out over multiple years. And I don't see any
reason why that momentum, as I look forward into 2022, would slow down.
If I were to think about the markets from sort of a rank ordering standpoint, given what I see from a DRAM
standpoint, given what I see from a foundry/logic standpoint and those road maps, I would say, maybe the
opportunity to make incremental gains is greater in those two markets than I currently see from the road map
standpoint in NAND.
We've got a great position in NAND. We're playing a strong hand. But I see less node-over-node momentum. I
still see node-over-node opportunity, but less node-over-node opportunity in that market than the strength we're
seeing from a DRAM and foundry/logic standpoint.
So I like how we're set up against a variety of spend environments. We've got a broad portfolio. We're well
integrated to the customers across a broad spectrum of the industry, and I like the node-over-node momentum
across multiple geographies.
The other thing I'd say is, is from a packaging standpoint, which is going to be an increasingly important part of
the PPACt road map, this is a market position we've been building over quite some time now. We've been
investing in this. We saw this inflection coming. Gary has been focusing the company on this opportunity. And
now, you see it really beginning to take hold and drive meaningful activity. At the company this year, it's going to
be an over $800 million business for us and it's going to be growing over 60%.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
The ICAPS portfolio is another position where Applied has a pretty high market share. Can you spend a couple of
moments discussing the ICAPS business. And I guess the big question for ICAPS is, since it addresses more
mature foundry and logic nodes, given how tight those nodes are today, do you think that the demand we're
seeing would be "extraordinary" or do you think that this demand is sustainable into 2022 and beyond?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So, our current view is, is we are going to have sustainability and follow-through at these levels. And let me
share with you a bit about what we've been seeing playing out over time that informs that perspective. So if I were
to go back, say, a decade in foundry/logic, what I would observe about the industry back then is 80% of the spend
was on the leading edge and 20% of the spend is on what we're calling the ICAPS nodes. And from a definitional
standpoint, just to make sure we've got a dividing line on that, today, we define leading edge as 7, 5 and 3
nanometers and the logic equivalent of that, so the most current logic node.
And once 2 nanometers comes on line, the leading edge definition, it's a rolling definition, will be 5, 3 and 2
nanometers. Everything else today, 10 nanometers and above, is part of the ICAPS' definition, market definition.
10
So if I were to go back in time, 80/20, then went to 70/30, then went to 60/40. Last year, it was balanced between
leading edge and our ICAPS nodes. This year, it's balanced. At our Analyst Day, we would expect between now
and 2024 for that balance to continue between those two markets.
What we see happening, and it's why we reorganized the company about three years ago, we saw a market trend
where innovation was coming back onto a broad, mature node profile. And we call that market segment ICAPS for
a reason. It's not just a collection of letters, IoT, communications, auto, power, sensors. What we observed in
those markets with those specific market focuses, our customers were innovating again. And they're innovating
across a very broad node profile.
And so, as part of this organization, we've got very talented engineers who are very focused on those road maps.
And we're working alongside of our customers, bringing those new technologies to market that serve a very
specific market need. And that innovation engine is really getting geared up on that broad node profile.
So, you've had a broadening of the demand profile and you've got a broadening of the innovation between
leading edge and trailing node. And at the core of that renaissance of innovation is pushing intelligence to the
edge. And Gary talks about machine-generated data producing over 99% of the data in the world by 2025, a lot of
that is going to be driven by intelligence at the edge. When you generate machine-to-machine data, it's going to
create a virtuous cycle of demand for compute power and storage in the cloud. You're going to turn that data into
actionable intelligence, actionable insights.
Companies are then going to tune how they serve their customers, how they compete with their peers, how they
drive efficiency into their operations and produce more value for shareholders. When you get better outcomes, it's
going to drive more intelligence at the edge, it's going to drive more demand for compute power and you get a bit
of a virtuous cycle built up around this explosion of data that's generated machine-to-machine.
So, there's a variety of factors that come into play that we're taking a point of view that we're going to see follow-
through and sustainability at these levels and it's going to grow in line with the leading edge. And I think if we look
at comments coming out from other participants in the market, I think you see very similar messaging coming out
from multiple places and participants within the market that sort of mirrors our perspective on this.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
One of the segments where Applied has also grown faster than market for the past couple of years at least is your
Process Diagnostics and Control business, I think, are on track to grow over 60% this year. I know it's a split
between sort of your e-beam portfolio and optical inspection. And I guess maybe my first question is, are both
segments within PDC, optical and e-beam growing at similar rates or is the growth really being driven by one area
or the other?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah, sure. So here's how I'd shape the performance of that business. So the business has had a lot of
momentum over the last couple of years. And so, we like how we're positioned against the opportunity. Our PDC
segment is going to grow greater than 60% this year, so a very, very strong grower. As I look at the process
control market, I wouldn't say every segment of the market is going to be a robust grower this year. But as I take a
look at our business and how we're positioned and that greater than 60% growth for that segment of our business,
I think the strong driver of growth is going to be our e-beam business, and it's e-beam metrology.
11
We've got some of the best resolution. We got the best resolution in the industry. And it's super important to our
customers and their PPACt road maps, dialing in the road map, getting their integration scheme crystallized as
quickly as possible, and getting that new technology node on line. It's also one of the capabilities that we're
leveraging that's driving some of the momentum we see from a DRAM standpoint in the current environment. So,
it's a great business for us. It's driving industry-leading technology and capabilities to the market.
Our optical patterned wafer inspection, we've got great traction with our new product in foundry/logic space. It's
around EUV applications. And now we're broadening that outside of foundry/logic into memory. And I would say
that the momentum we see around that business since introducing that product, it's the fastest-ramping optical
tool that we've had in our history. So, we feel good about the differentiation and the way we're ramping it. But if I
look at it relative to the overall segment where e-beam is growing above that 60% rate, our optical business will
grow under that segment average, but still a nice business showing some momentum for us as well. So that's how
I see that market shaping up and the relative momentum of the technologies that exist within that portfolio for us.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
You've mentioned the new Enlight optical inspection tool and the growing number of engagements. Can you
maybe quantify sort of what – how that number of engagements has grown over the past year or so.
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So, I would say that we see strong traction from a foundry/logic standpoint. That was the initial insertion
place for that technology and it's primarily around EUV applications and high-volume manufacturing. And so, we
feel good about that product positioning. And now, it's a process of diversifying that initial insertion point into the
adjacent markets in memory as well and we're in the process of broadening that footprint out. And so we feel
good, again, about that momentum and the way that product is performing against the opportunity.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Okay. And then just looking at your Actionable Insight Accelerator platform, can you talk about the capabilities
leveraging in situ and in line metrology e-beam and how that's helping you accelerate time to market for your
customers?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So this is one of the more exciting parts of taking the capabilities that exist within the company and bringing
them together in an integrated, more holistic way to address the customers' highest value problems. When we talk
about the PPACt road map, time is a super important part of bringing your next technology node on line. I think
the industry has a renewed appreciation of how important that is, given the robustness we see in the end markets,
get that technology node on line and start differentiating yourself relative to the competition in those markets.
And so, the AIx, Actionable Insight Accelerator, is a way of bringing a diverse set of capabilities from across the
company, whether it's sensor technology in our chambers, whether it's metrology, and that's both in situ and in
line. And it's getting algorithms working on the problem and getting it done in a big data with high-speed compute
environment. You are synthesizing this perspective of what's happening in a multiple step flow, as well what
happens inside a chamber.
12
And it's combining that with a digital twin capability so that you can synthetically model how different types of
setups on an integration flow will influence on wafer performance. And what we've seen is it dramatically speeds
up dialing in of process recipes and also the process windows widening them.
Gary will talk about speeding up the integration scheme, the process recipe by 50% and increasing the – or
actually making it two times faster, sorry, two times faster to dial in the recipe and making the process windows
30% larger, which yields to more stability in high-volume manufacturing, but also more yield.
So it's a very important value proposition for the customer and bringing those capabilities together in an integrated
way. We're seeing strong traction from the customer base to pull this capability into their operations. And we really
like the momentum around driving the road maps even faster in this industry.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Last question for me and then I've got one from the audience. Dan, if I look at the company's guidance for the
second half of the calendar year, especially for SSG, looks like if you run rate that, you're already sort of at the
base case model you gave us for the 2024 target. Does this sort of lead you to sort of think that the business and
perhaps the overall industry could be tracking towards the high case that you'd set forth at the Analyst Day?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah, absolutely. And what we said at the time we put the model out, base case with an upside scenario, if I were
to put a probability distribution around those scenarios, I said they would skew to the upside. And so, what we're
seeing in the current environment only reinforces that perspective.
But as I look at it from a market sizing standpoint, but also the performance of the company at each level
underneath that from a target model standpoint, I think you can see the progress we're making top to bottom
towards those longer-term targets. And at the time, we also said that we see an opportunity to potentially do even
better than those targets that were put out there. So we feel good about where we sit relative to those targets and
we do see that bias skewing to the upside.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Great. And the question from the audience just sort of I think a big picture for the current capacity-constrained
environment. Do you see specific catalysts that will likely happen for supply/demand, such as Intel moving into
foundry segment and shipping leading-edge chips to help alleviate some of those constraints?
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yeah. So I won't comment specifically on what any one customer is going to be doing. But I do think you see an
entire focus of an industry coming to bear to address those potential issues. But what I would say is, is longer-
term, what I see is an industry that's taking a different approach to how they think about their business given the
strength of these secular trends, and whether it's companies for the first time coming out with multiple-year CapEx
expectations, whether it's an alignment around how the power performance road maps are going to be driven
going forward, whether it's us, whether it's our customers, we're all talking about the same five vectors that are
going to increasingly define the power performance road map. Whether it's a broadening of demand across a
13
greater spectrum of node profiles with innovation across the entire spectrum. That diversification of innovation, I
think, serves the industry well.
And so, I think there's a number of factors that are coming together that not only address the near-term set of
environmentals in the industry, but also begin to speak to a larger opportunity as we go forward. One of the things
that came up with one of the earlier conversations is the number of 300-millimeter factories that are in the early
stages of being built or in the early stages of accepting equipment.
Today, that number is 57 300-millimeter projects around the globe spanning foundry, logic, NAND, DRAM. And if I
were to go back a short period of time, say, to 2018, that number was half that. I think there were 29 projects at
the time around the globe. It gives you a sense of the view the industry is taking towards these strong secular
growth trends. The infrastructure that's being put in place to absorb that manufacturing capacity as the end-
market demand materializes. And so, I like a number of aspects of the way the industry is thinking and acting
around what I see are strong secular growth trends.
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Well, that's great. I think we've reached the end of the time. So, Dan, Mike, thank you very much for joining us at
the Needham SemiCap and EDA Conference. Really appreciate your time this afternoon. So thank you, and look
forward to seeing you again soon.
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
Yes. Thanks, everyone. Thanks again, Quinn...
.....................................................................................................................................................................................................................................................................
Quinn Bolton
Thank you.
.....................................................................................................................................................................................................................................................................
Daniel J. Durn
...for the opportunity. Bye-bye.
14
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15
Investor Slides
Applied Materials, Inc. Slide 1: Q3 2021 Earnings Call
There was an error processing this document. It has been excluded from the
final PDF.
Management & Board
Applied Materials, Inc. (AMAT)$133.56 Next Rpt Date: 18 Nov '21Report as of 09 Sep '21
TOTAL INDEPENDENT AVERAGE AVERAGE INSIDER

Mgmt 17 Mgmt 60 Mgmt 8 Mgmt 0.409%
MEMBERS DIRECTORS AGE TENURE OWNED
27 Board 11 82% 60 YRS Board 60 9 YRS Board 10 0.442% Board 0.251%
Management
Company Insider Total

Name Position Age Tenure (Yrs) Holdings (%) Salary Comp.
Gary E. Dickerson, MBA President, Chief Executive Officer & Director 63 9 0.218 $1,030,000 $17,294,987
Ginetto Addiego, PhD Senior VP-Engineering, Operations & Quality 62 7 0.035 - -
Daniel J. Durn, MBA Chief Financial Officer & Senior Vice President 55 4 0.038 $625,000 $6,074,031
Omkaram Nalamasu, PhD Chief Technology Officer & Senior Vice President 63 15 0.021 - -
Jay O. Kerley Chief Information Officer & Group Vice President - 15 - - -
Teri A. Little Secretary, Chief Legal Officer & Senior VP 57 1 - $198,077 $9,682,855
Charles W. Read Chief Accounting Officer, VP & Controller 55 8 0.010 - -
Thomas C. Baker Vice President, CFO-New Markets & Service Group 56 8 - - -
Robert Friess Treasurer & Vice President - - - - -
Michael B. Thompson Director-Pharma Marketing 67 5 - - -
Robert J. Halliday, MBA, CPA Vice President-Business Development 66 8 - - -
Ali Salehpour Senior VP-Services, Display & Flexible Technology 59 9 0.040 $625,000 $5,663,600
Kang Sun, PhD Managing Director-New Business Development 66 16 - - -
Sundeep Madan Bajikar, MBA Head-Market Intelligence - - - - -
Prabu G. Raja, PhD SVP-Semiconductor Products Group 58 - 0.047 $567,000 $4,867,470
Michael Sullivan, MBA Vice President-Investor Relations - 12 - - -
Susan J. Schmitt Winchester Head-Human Resources & Group Vice President 58 3 - - -
Source: FactSet People, Ownership
Board Members
Board Insider Total

Thomas J. Iannotti Chairman 63 16 0.006 - -
Gary E. Dickerson, MBA President, Chief Executive Officer & Director 63 8 0.218 $1,030,000 $17,294,987
Rani Borkar Independent Director 59 <1 0.000 - -
Yvonne McGill Independent Director 53 2 0.001 - -
Scott A. McGregor Independent Director 64 3 0.001 - -
Judy Bruner, MBA Independent Director 62 5 0.003 - -
Adrianna C. Ma, MBA Independent Director 47 6 0.001 - -
Eric Chen, PhD Independent Director 51 6 0.003 - -
Alexander A. Karsner Independent Director 53 13 0.001 - -
Board Members
Board Insider Total

Aart J. de Geus, PhD Independent Director 66 14 0.017 - -
James C. Morgan, MBA Chairman-Emeritus 83 45 - - -

Broker Research
DEFENSE WINS CHAMPIONSHIPS
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AMAT
Sep 01
2021
Suggestion
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AMAT (APPLIED MATERIALS)

Recently trading at: 134.6 September 1, 2021, 1:26 pm ET
Technical Summary
Term → Near Mid Long
Bias Strong Weak Strong
P1 0 0 138.57
P2 134.36 130.90 152.98
P3 137.10 135.37 168.51
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Long Term Trading Plans for AMAT

September 1, 2021, 1:26 pm ET
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provides. The BLUE dot is the current price, the RED dots are resistance levels, and the GREEN are
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Technical Summary: 134.6 , 138.57, 152.98, 168.51, Where 134.6 = the recent price
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there are no clear support levels at this time, so target is not available from the current data. This
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catching a falling knife. Buy signals only exist if a new downside target has been established
resistance breaks higher. (updates occur at the beginning of every trading
This often is a signal that the stock you are session) or until the position has been stopped.
watching is weak. Waiting for a turn higher may The summary data tells us to have a stop loss in
be more intelligent than trying to catch a falling place at 138.97. 138.57 is the first level of
knife. In any case, new support levels are usually resistance above 134.6, and by rule, any test of
revised to the database at the beginning of the resistance is a short signal. In this case, if
next trading session. resistance 138.57 is being tested, so a short
signal would exist.
AMAT - (Long) Resistance Plan
Buy over 138.57, target 152.98, stop loss @ 138.17 AMAT - (Short) Support Plan
NONE.
If 138.57 begins to break higher, the technical

summary data will suggest a buy of AMAT over There is no current Support Plan to trigger a
138.57, with an upside target of 152.98. The data short at this time. Shorts should be based n tests
also tells us to set a stop loss @ 138.17 in case of resistance levels. In this case, the door is wide
the stock turns against us. 138.57 is the first level open for additional declines unless resistance
of resistance above 134.6, and by rule, any break breaks higher...
above resistance is a buy signal. In this case, Please use the resistance plan as a short-
resistance 138.57 would be breaking higher, so a indicator until new support levels have been
buy signal would exist. added to the database. Usually revised trading
indicators will update at the beginning of the next
trading session.
Swing Trading Plans for AMAT

Technical Summary: 130.90, 134.6 , 135.37, 138.57, 152.98, 168.51, Where 134.6 = the recent price
Legend
Stock Finder
Current stock price
Resistance level
Buy This Stock - Swing Trades Short This Stock - Swing Trades
AMAT - (Long) Resistance Plan AMAT - (Short) Resistance Plan

Buy over 135.37, target 138.57, Stop Loss @ 134.98 Short near 135.37, target 130.90, Stop Loss @ 135.76.
If 135.37 begins to break higher, the technical The technical summary data is suggesting a short
summary data tells us to buy AMAT just over of AMAT if it tests 135.37 with a downside target
135.37, with an upside target of 138.57. The data of 130.90. We should have a stop loss in place at
also tells us to set a stop loss @ 134.98 in case 135.76 though in case the stock begins to move
the stock turns against the trade. 135.37 is the against the trade. By rule, any test of resistance is
first level of resistance above 134.6, and by rule, a short signal. In this case, if resistance, 135.37, is
any break above resistance is a buy signal. In this being tested a short signal would exist. Because
case, 135.37, initial resistance, would be breaking this plan is a short plan based on a test of
higher, so a buy signal would exist. Because this resistance it is referred to as a Short Resistance
plan is based on a break of resistance, it is Plan.
referred to as a Long Resistance Plan.
AMAT - (Long) Support Plan AMAT - (Short) Support Plan
Buy near 130.90, target 135.37, Stop Loss @ 130.52 Short under 130.90, target n/a, Stop Loss @ 131.28
Buy near 130.90, target 135.37, Stop Loss @ Buy near 130.90, target 135.37, Stop Loss @
130.52The technical summary data tells us to buy 130.52The technical summary data tells us to buy
AMAT near 130.90 with an upside target of 135.37. AMAT near 130.90 with an upside target of
This data also tells us to set a stop loss @ 130.52 135.37. This data also tells us to set a stop loss @
to protect against excessive loss in case the stock 130.52 to protect against excessive loss in case
begins to move against the trade. 130.90 is the the stock begins to move against the trade.
first level of support below 134.6, and by rule, any 130.90 is the first level of support below 134.6,
test of support is a buy signal. In this case, 130.90, and by rule, any test of support is a buy signal. In
initial support, would be tested, so a buy signal this case, 130.90, initial support, would be tested,
would exist. Because this plan is based on a test so a buy signal would exist. Because this plan is
of support it is referred to as a Long Support based on a test of support it is referred to as a
Plan. Long Support Plan.
Day Trading Plans for AMAT

Technical Summary: 130.90, 134.36, 134.6 , 135.37, 137.10, 138.57, 152.98, 168.51, Where 134.6 =
the recent price
Legend
Stock Finder
Current stock price
Resistance level
Buy This Stock - Day Trades Short This Stock - Day Trades
AMAT - (Long) Resistance Plan

Buy over 135.37, target 137.10, Stop Loss @ 135.05
AMAT - (Short) Resistance Plan
Short near 135.37, target 134.36, Stop Loss @ 135.69.
If 135.37 begins to break higher, the technical The technical summary data is suggesting a short
summary data tells us to buy AMAT just over of AMAT if it tests 135.37 with a downside target
135.37, with an upside target of 137.10. The data of 134.36. We should have a stop loss in place at
also tells us to set a stop loss @ 135.05 in case 135.69 though in case the stock begins to move
the stock turns against the trade. 135.37 is the against the trade. By rule, any test of resistance is
first level of resistance above 134.6, and by rule, a short signal. In this case, if resistance, 135.37, is
any break above resistance is a buy signal. In this being tested a short signal would exist. Because
case, 135.37, initial resistance, would be breaking this plan is a short plan based on a test of
higher, so a buy signal would exist. Because this resistance it is referred to as a Short Resistance
plan is based on a break of resistance, it is Plan.
referred to as a Long Resistance Plan.
AMAT - (Long) Support Plan
Buy near 134.36, target 135.37, Stop Loss @ 134.05
AMAT - (Short) Support Plan
Short under 134.36, target 130.90, Stop Loss @ 134.67
Buy near 134.36, target 135.37, Stop Loss @

134.05The technical summary data tells us to buy Buy near 134.36, target 135.37, Stop Loss @
AMAT near 134.36 with an upside target of 135.37. 134.05The technical summary data tells us to buy
This data also tells us to set a stop loss @ 134.05 AMAT near 134.36 with an upside target of
to protect against excessive loss in case the stock 135.37. This data also tells us to set a stop loss @
begins to move against the trade. 134.36 is the 134.05 to protect against excessive loss in case
first level of support below 134.6, and by rule, any the stock begins to move against the trade.
test of support is a buy signal. In this case, 134.36, 134.36 is the first level of support below 134.6,
initial support, would be tested, so a buy signal and by rule, any test of support is a buy signal. In
would exist. Because this plan is based on a test this case, 134.36, initial support, would be tested,
of support it is referred to as a Long Support so a buy signal would exist. Because this plan is
Plan. based on a test of support it is referred to as a
Long Support Plan.
Fundamental Charts
Find the Fundamental Charts for AMAT below. With a focus on earnings growth valuation, these charts
help define the underlying company.
AMAT EPS Analysis

AMAT Revenue
AMAT Growth Rate - Quartely
AMAT P/E Chart

AMAT PEG
Powered by TCPDF (www.tcpdf.org)

RELIABLE RESEARCH
Closing Price as of 08/27/2021: $136.55
Analyst Notes updated 08/27/2021.
Dividend Yield: 0.7%
See below for details.
Period End Date: 08/01/2021
Applied Materials, Inc. (AMAT) 3 - Neutral

NASDAQ - Technology
Price 08/27/2021: $136.55
Investment Recommendation Economic Book Value per share $83.25
52-Week Range $53.70 - $145.48
• We do not recommend investors buy AMAT.
• AMAT earns our Neutral rating. See Investment
Rating Details below.
• A Neutral rating means this stock’s upside
potential is about equal to its downside risk.
• AMAT ranks in the 63rd percentile of the 2800+
stocks we cover.
• Ranks 98th out of 466 Technology Sector
stocks.
Investment Rating Details
Risk/Reward Quality of Earnings Valuation

Rating Economic vs Return on Invested Growth Appreciation
FCF Yield Price-to-EBV Ratio Period (yrs)
Reported EPS Capital (ROIC)
5 - Very Unattractive Misleading Trend Bottom Quintile <-5% > 3.5 or -1 < 0 > 50
4 - Unattractive False Positive 4th Quintile -5%<-1% 2.4 < 3.5 or < -1 20 < 50
3 - Neutral Neutral EE 3rd Quintile -1%<3% 1.6 < 2.4 10 < 20
2 - Attractive Positive EE 2nd Quintile 3%<10% 1.1 < 1.6 3 < 10
1 - Very Attractive Rising EE Top Quintile >10% 0 < 1.1 0<3
Accounting vs Economic Earnings Accounting Adjustments Summary

• AMAT's accounting earnings overstate its economic earnings,
which equal (ROIC - WACC) * Average Invested Capital.
• For AMAT, we made a total of $14,558 million in income
statement and balance sheet adjustments to convert accounting
earnings to economic earnings in FY20.
• We made $14,165 million in adjustments in our DCF valuation of
the stock.
• We make, in general, 10 types of income statement adjustments
to derive NOPAT, 12 types of balance sheet adjustments to
derive Average Invested Capital, & 10 types of valuation
adjustments in our reverse DCF valuation models.
Analyst Notes Trust More Reliable Data About New Constructs

• Best fundamental data in the world, proven in
Analyst Notes are only available to We empower you with superior fundamental data. the Journal of Financial Economics
members of our website. They provide
additional insights and alert clients to • Best research, see appendix of this paper
important corporate events or disclosures See the PROOF
that can impact investment decisions. • Superior stock ratings: our Robo-Analyst
outperforms human analysts
• Best Investment Research Tech: Benzinga's
We democratize access to the truth about
Global Fintech Winner
earnings.
Page 1
www.newconstructs.com Applied Materials, Inc. (AMAT)
RELIABLE RESEARCH
08/28/2021
Economic vs Reported Earnings
Economic Earnings are 1 - Very Attractive

Economic Earnings are almost always meaningfully different
than reported earnings. We believe Economic Earnings provide
a truer measure of profitability and shareholder value creation
than reported earnings because they have been adjusted to
remove over twenty accounting distortions.
The majority of data required to reverse accounting distortions is

available only in the Footnotes and MD&A, which we analyze
rigorously. Our core competency is gathering and analyzing all
relevant financial data from filings so that we can deliver
earnings analysis that best represents the true profitability of
businesses.
Appendix 1 in the report available to members of our website

provides a detailed reconciliation between economic and
accounting earnings.
Return on Invested Capital (ROIC)
ROIC is 1 - Very Attractive

ROIC measures a company's return on all cash invested in the
business. It is the truest measure of profitability. Stock valuations
are more highly correlated to ROIC than any other metric. ROIC
is calculated as NOPAT divided by Average Invested Capital.
Weighted-Average Cost of Capital (WACC) is the average of debt

and equity capital costs that all publicly traded companies with
debt and equity stakeholders incur as a cost of operating.
Companies must earn an ROIC greater than WACC to generate

positive economic earnings and create value for shareholders.
Appendix 1 in the report available to members of our website

provides details on all the accounting adjustments we make to
provide the best ROIC in the business. This paper compares our
ROIC for a mega cap company to other major providers.
Free Cash Flow Yield (FCF Yield)
Free Cash Flow Yield is 2 - Attractive

Free Cash Flow reflects the amount of cash free for distribution to
all stakeholders (including debt & equity). FCF Yield divides free
cash flow by enterprise value.
Using Free Cash Flow Yield to pick stocks is not a new strategy.
However, our strategy yields superior results because we use a
better measure of Free Cash Flow. In the same way our
Economic EPS are better measures of profitability than reported
EPS, our measure of Free Cash Flow is better than traditional
accounting-based Free Cash Flow.
Appendix 1 in the reports available members of our website

provides the income statement and balance sheet adjustments
required for an accurate measure of FCF.
Page 2
RELIABLE RESEARCH
08/28/2021
Price-to-EBV Ratio
Price-to-EBV Ratio is 3 - Neutral

Price-to-Economic Book Value (EBV) measures the difference
between the market's expectations for future profits and the
no-growth value of the stock.
EBV measures the no-growth value of the company based on the

company's current Net Operating Profit After Tax (NOPAT).
When prices are higher than EBV, the market predicts the NOPAT
of the company will increase and expectations for profit growth
are reflected in the stock. If the stock price equals EBV, the
market predicts NOPAT will remain the same and there are no
expectations for profit growth reflected in the stock. When
stock prices are lower than EBV, the market predicts NOPAT will
decrease and expectations for permanent profit decline are
reflected in the stock.
In general, we like to buy stocks with low expectations for profit

growth and sell/short stocks with high expectations for profit
growth.
Appendix 2 in the reports available to member of our website

details all the valuation adjustments required for an accurate
measure of economiv book value.
Growth Appreciation Period
The Growth Appreciation Period is 5 - Very Unattractive

Historical Performance Market Expectations
The market-implied duration of profit growth or GAP measures Performance Hurdles
the number of years the company must maintain an edge over its 5 Yr 3Yr Last FY
Default
competitors by earning ROIC greater than the weighted-average based on current price
cost of capital on new investments. Stock Price $28.66 $32.36 $60.95 $136.55
We believe AMAT embeds a Very Unattractive level of market
Revenue CAGR 12.3% (0.1%) 32.9% 3.4%
expectations because there is a very large difference between the
expected financial performance implied by its market price and ROIC - WACC 22.7% 21.4% 32.4% 26.1%
the company's historical performance.
Growth Appreciation Period - - - > 100 years
At AMAT's current stock price of $136.55, the market is expecting
revenue to grow at 3.4% for more than 100 years. Over this
period, AMAT is also expected to generate an average Economic
Earnings Margin of 26.1%.
These results are derived using our dynamic discounted cash

flow model.
Learn More
Members of our website get exclusive access to more data and detailed analytics on the 10,000 securities we cover. Stock reports from our
website include detailed information on the number and dollar value of every income statement, balance sheet and DCF valuation
adjustments we make.
Members also get exclusive access to multiple model portfolios, weekly Long Ideas, and Danger Zone calls, IPO Research, Market
Outlooks, Webinars and thought leadership on Machine Learning & AI for Investing and Fiduciary Rule fulfillment.
Members get advanced screening capabilities on our best-in-class metrics like ROIC and Free Cash Flow Yield and alerts whenever there
are changes to any of the securities in your custom portfolio.
Take a free tour and get a risk-free trial today!
Page 3
RELIABLE RESEARCH
08/28/2021
Appendix: Explanation of New Constructs' Stock Ratings
Ratings
In-depth risk/reward analysis underpins our stock rating. Our stock rating methodology grades every stock according to what
we believe are the 5 most important criteria for assessing the quality of a stock. Each grade reflects the balance of potential
risk and reward of buying that stock. Our analysis results in the 5 ratings described below. Very Attractive and Attractive
correspond to a "Buy" rating, Very Unattractive and Unattractive correspond to a "Sell" rating, while Neutral corresponds to a
"Hold" rating.
Quality of Earnings Valuation

Risk/Reward Rating
Economic vs Return on Invested FCF Yield Price-to-EBV Ratio Growth
Reported EPS Capital (ROIC) Appreciation Period
5 -Very Unattractive Misleading Trend Bottom Quintile < -5% > 3.5 or -1 < 0 > 50
4 - Unattractive False Positive 4th Quintile -5% < -1% 2.4 < 3.5 or < -1 20 < 50
3 - Neutral Neutral EE 3rd Quintile -1% < 3% 1.6 < 2.4 10 < 20
2 - Attractive Positive EE 2nd Quintile 3% < 10% 1.1 < 1.6 3 < 10
1 - Very Attractive Rising EE Top Quintile > 10% 0 < 1.1 0<3
Ratings
Economic earnings and return on capital metrics are significantly more accurate when as-reported financial statements have
been adjusted to reverse accounting distortions and Red Flags. The majority of the data required to reverse accounting
distortions is available only in the Notes to the Financial Statements, which we analyze rigorously. Our core competency is
gathering and analyzing all relevant financial data (from the Financial Statements and Notes) so that we can deliver
earnings analysis that best represents the true profitability of businesses. See the figure below for a list of the Red Flag
adjustments we make to a company's reported GAAP profits in order to reverse accounting distortions and arrive at a better
measure of a firm's profits.
Accounting Issues and Red Flags that Distort GAAP

• Employee Stock Options • Off-Balance-Sheet Financing
• Pension Over/Under Funding • LIFO Reserve
• Excess Cash • Unrealized Gains/Losses
• Restructuring Charges • Goodwill Amortization
• Pooling Goodwill • Unconsolidated Subsidiaries
• Minority Interests • Capitalized Expenses
• Discontinued Operations • Deferred Compensation
• Preferred Stock • Net Deferred tax Assets and Liabilities
• Mid-Year Acquisitions
Page 4
RELIABLE RESEARCH
08/28/2021
It's Official: We Offer the Best Fundamental Data in the World

Many firms claim their research is superior, but none of them can prove it with independent studies from highly-respected institutions as we can. Three
different papers from both the public and private sectors show:
1. Legacy fundamental datasets suffer from significant inaccuracies, omissions, and biases.
2. Only our "novel database" enables investors to overcome these flaws and apply reliable fundamental data in their research.
3. Our proprietary measures of Core Earnings and Earnings Distortion materially improve stock picking and forecasting of profits.
Best Fundamental Data in the World

Forthcoming in The Journal of Financial Economics, a top peer-reviewed journal, Core Earnings: New Data & Evidence proves our Robo-Analyst
technology overcomes material shortcomings in legacy firms' data collection processes to provide superior fundamental data, earnings models, and
research. More details.
Key quotes from the paper:

• "[New Constructs'] Total Adjustments differs significantly from the items identified and excluded from Compustat's adjusted earnings
measures. For example... 50% to 70% of the variation in Total Adjustments is not explained by S&P Global's (SPGI) Adjustments individually."
-pp. 14, 1st para.
• "A final source of differences [between New Constructs' and S&P Global's data] is due to data collection oversights... we identified
cases where Compustat did not collect information relating to firms' income that is useful in assessing core earnings." - pp. 16, 2nd
para.
Superior Models
A top accounting firm features the superiority of our ROIC, NOPAT, and Invested Capital research to Capital IQ & Bloomberg's in Getting ROIC Right. See
the Appendix for direct comparison details.
• "...an accurate calculation of ROIC requires more diligence than often occurs in some of the common, off-the-shelf ROIC
calculations. Only by scouring the footnotes and the MD&A [as New Constructs does] can investors get an accurate
calculation of ROIC." -pp. 8, 5th para.
• "The majority of the difference... comes from New Constructs' machine learning approach, which leverages technology to calculate
ROIC by applying accounting adjustments that may be buried deeply in the footnotes across thousands of companies." -pp. 4, 2nd
para.
Superior Stock Ratings

Robo-Analysts' stock ratings outperform those from human analysts as shown in this paper from Indiana's Kelley School of business. Bloomberg features the
paper here.

• "the portfolios formed following the buy recommendations of Robo-Analysts earn abnormal returns that are statistically and
economically significant." -pp. 6, 3rd para.
• "Our results ultimately suggest that Robo-Analysts are a valuable, alternative information intermediary to traditional sell-side
analysts." -pp. 20, 3rd para.
Our mission is to provide the best fundamental analysis of public and private businesses in the world and make it affordable for all investors, not just Wall
Street insiders.
We believe every investor deserves to know the whole truth about the profitability and valuation of any company they consider for investment. More details on
our cutting-edge technology and how we use it are here.
Page 5
RELIABLE RESEARCH
08/28/2021
DISCLOSURES
New Constructs®, LLC (together with any subsidiaries and/or affiliates, 'New Constructs') is an independent organization with no management ties to the companies it covers.
None of the members of New Constructs' management team or the management team of any New Constructs' affiliate holds a seat on the Board of Directors of any of the
companies New Constructs covers. New Constructs does not perform any investment or merchant banking functions and does not operate a trading desk.
New Constructs' Stock Ownership Policy prevents any of its employees or managers from engaging in Insider Trading and restricts any trading whereby an employee may
exploit inside information regarding our stock research. In addition, employees and managers of the company are bound by a code of ethics that restricts them from purchasing
or selling a security that they know or should have known was under consideration for inclusion in a New Constructs report nor may they purchase or sell a security for the first
15 days after New Constructs issues a report on that security.
DISCLAIMERS
The information and opinions presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or solicitation of an offer
to buy or sell securities or other financial instruments. New Constructs has not taken any steps to ensure that the securities referred to in this report are suitable for any particular
investor and nothing in this report constitutes investment, legal, accounting or tax advice. This report includes general information that does not take into account your individual
circumstance, financial situation or needs, nor does it represent a personal recommendation to you. The investments or services contained or referred to in this report may not
be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about any such investments or investment services.
Information and opinions presented in this report have been obtained or derived from sources believed by New Constructs to be reliable, but New Constructs makes no
representation as to their accuracy, authority, usefulness, reliability, timeliness or completeness. New Constructs accepts no liability for loss arising from the use of the
information presented in this report, and New Constructs makes no warranty as to results that may be obtained from the information presented in this report. Past performance
should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance.
Information and opinions contained in this report reflect a judgment at its original date of publication by New Constructs and are subject to change without notice. New Constructs
may have issued, and may in the future issue, other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those
reports reflect the different assumptions, views and analytical methods of the analysts who prepared them and New Constructs is under no obligation to insure that such other
reports are brought to the attention of any recipient of this report.
New Constructs' reports are intended for distribution to its professional and institutional investor customers. Recipients who are not professionals or institutional investor
customers of New Constructs should seek the advice of their independent financial advisor prior to making any investment decision or for any necessary explanation of its
contents.
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or jurisdiction
where such distribution, publication, availability or use would be contrary to law or regulation or which would be subject New Constructs to any registration or licensing
requirement within such jurisdiction.
This report may provide the addresses of websites. Except to the extent to which the report refers to New Constructs own website material, New Constructs has not reviewed
the linked site and takes no responsibility for the content therein. Such address or hyperlink (including addresses or hyperlinks to New Constructs own website material) is
provided solely for your convenience and the information and content of the linked site do not in any way form part of this report. Accessing such websites or following such
hyperlink through this report shall be at your own risk.
All material in this report is the property of, and under copyright, of New Constructs. None of the contents, nor any copy of it, may be altered in any way, copied, or distributed or
transmitted to any other party without the prior express written consent of New Constructs. All trademarks, service marks and logos used in this report are trademarks or service
marks or registered trademarks or service marks of New Constructs.
Copyright New Constructs, LLC 2003 through the present date. All rights reserved.
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Applied Materials, Inc.

09 Sep 21 Public Information Book

Sales & Earnings

11 Sales & Earnings

44 Applied Materials Q4 guidance details -- conf call ($129.20, 0.00)

45 Applied Materials initiated outperform at Daiwa ($127.37, 0.00)

47 StreetAccount Metrics Recap - Applied Materials Q3 Earnings ($129.20, 0.00)

65 Applied Materials, Inc. Slide 1: Q3 2021 Earnings Call

Management & Board

67 Management and Board

Sector Industry Mkt Cap (B) EV (B) Sales (M)

Estimates Net Margin 24.5 - -

© 2021 FactSet Research Systems, Inc.

Upcoming Events EPS Sales

15 Sep '21 01:00 PM Citi Global Technology Conference…

15 Sep '21 01:00 PM Citi Global Technology Conference

21 Sep '21 12:00 PM J.P. Morgan U.S. All Stars Conference

Past Events EPS Sales

09 Jun '21 01:45 PM Bank of America Global Technology…Conference

08 Jun '21 12:00 PM Exane BNP Paribas European CEO

07 Jun '21 02:00 PM Evercore TMT Conference

02 Jun '21 04:30 PM Bernstein Strategic Decisions Conference

01 Jun '21 11:10 AM Cowen Technology, Media & Telecom

24 May '21 02:00 PM J.P. Morgan Global Virtual Technology,

© 2021 FactSet Research Systems, Inc.

© 2021 FactSet Research Systems, Inc.

Management (6 of 17) Board (6 of 11)

3050 Bowers Avenue Michael Sullivan Fiscal Year October

© 2021 FactSet Research Systems, Inc.

NET POSITION CHANGE -31,404,096

Top Holders - Institutions and Insiders

© 2021 FactSet Research Systems, Inc.

Segments Snapshot - Quarterly (M)

Jul '21 YoY % % of Sales Oct '21E YoY % 3Y Trend

Estimate Growth - Quarterly

Oct '20 Oct '21E Growth (YoY%)

Oct '20 Oct '21E Growth (YoY%)

© 2021 FactSet Research Systems, Inc.

EPS - Consensus Outlook - Annual & Quarterly

Segments LT Estimates - Annual (M)

© 2021 FactSet Research Systems, Inc.

© 2021 FactSet Research Systems, Inc.

Sales - Consensus Trend - Annual (M)

Sales - Broker Detail - Oct '21E (M)

Consensus Guidance # of Brokers

Top 11 Brokers Research Estimate Bottom 10 Brokers Research Estimate

© 2021 FactSet Research Systems, Inc.

Sales - Broker Revisions - Oct '21E (M)

Consensus Guidance 1M Revision 1W Revision

© 2021 FactSet Research Systems, Inc.

EPS - Consensus Trend - Annual

EPS - Broker Detail - Oct '21E

Consensus Guidance # of Brokers

Top 12 Brokers Research Estimate Bottom 11 Brokers Research Estimate

© 2021 FactSet Research Systems, Inc.

EPS - Broker Revisions - Oct '21E

Consensus Guidance 1M Revision 1W Revision

© 2021 FactSet Research Systems, Inc.

Valuation Peers Analysis

© 2021 FactSet Research Systems, Inc.