Applied Materials, Inc. Q4 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Applied Materials delivered its strongest year ever, generating $23 billion in fiscal 2021 revenue (a 34% year‑over‑year increase).
  • Q4 results hit the midpoint of guidance despite worsening supply chain shortages that reduced revenue by an estimated $300 million.
  • Backlog ended the year at $11.8 billion, up 77% year‑over‑year.
  • Supply constraints—especially in silicon components such as PLCs—are expected to continue into fiscal 2022, with sequential easing each quarter.

Demand Environment

  • Wafer fab equipment (WFE) spending in 2021 expected to be up ~40% year‑over‑year to the mid‑$80 billion range.
  • Applied expects WFE to increase again in 2022, led by foundry/logic and ICAPS (IoT, communications, automotive, power).
  • Foundry/logic represented 60% of WFE spending in 2021, up from 53% five years ago; AMAT expects this to stay elevated or rise.
  • Memory demand remains healthy; 2022 memory spending expected to increase modestly but at a lower rate than foundry/logic.
  • Long‑term secular drivers remain very strong: AI, cloud, 5G, automotive, and edge computing fueling silicon demand.
  • Tool utilization across the industry has reached the highest levels of the past decade.

Company Performance vs Prior Periods

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Operator: Welcome to the Applied Materials Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Michael Sullivan, Corporate Vice President. Please go ahead, sir. Michael Sullivan: Good afternoon, everyone, and thank you for joining Applied's Fourth Quarter of Fiscal 2021 Earnings Call. Joining me are Gary Dickerson, our President and CEO; and Bob Halliday, our Chief Financial Officer. Before we begin, I'd like to remind you that today's call contains forward-looking statements, which are subject to risks and uncertainties that could cause our actual results to differ. Information concerning the risks and uncertainties is contained in Applied's most recent Form 10-Q and 8-K filings with the SEC. Today's call also includes non-GAAP financial measures. Reconciliations to GAAP measures are found in today's earnings press release and in our quarterly earnings materials, which are available on the IR page of our website at appliedmaterials.com. And now I'd like to turn the call over to Gary Dickerson. Gary Dickerson: Thank you, Mike. I'd like to start by thanking our employees for delivering the best year in Applied Materials history while navigating a dynamic and challenging environment. Demand for semiconductors and wafer fab equipment remains very strong. And in fiscal 2021, we generated $23 billion of revenue, which represents 34% annual growth. In fiscal Q4, we hit the midpoint of our earnings guidance despite larger-

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