Third Quarter Fiscal 2025 Earnings Presentation August 14, 2025 Applied Materials External Forward-Looking Statements This presentation contains forward-looking statements, including those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new product ...

Applied Materials gave a disappointing sales and profit forecast for the current period, signaling that the US trade dispute with China will weigh on demand https://t.co/1p6Ah9SnkL ...

[Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) [Q3 FY2025 Financial Highlights](index=1&type=section&id=Q3%20FY2025%20Financial%20Highlights) Applied Materials delivered record performance in its third fiscal quarter of 2025, achieving significant year-over-year growth in key financial metrics including revenue, operating margins, and non-GAAP EPS | Metric | Value | Change YoY | | :-------------------- | :---------- | :--------- | | Record revenue | $7,300M | +8% | | GAAP gross margin | 48.8% | - | | Non-GAAP gross margin | 48.9% | - | | GAAP operating margin | 30.6% | - | | Non-GAAP operating margin | 30.7% | - | | GAAP EPS | $2.22 | +8% | | Record non-GAAP EPS | $2.48 | +17% | [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Gary Dickerson highlighted record Q3 performance and projected the sixth consecutive year of revenue growth for fiscal 2025, expressing confidence in long-term semiconductor industry growth despite near-term macroeconomic and policy uncertainties, particularly concerning China. CFO Brice Hill anticipates a Q4 revenue decline, attributing it to capacity digestion in China and non-linear demand from leading-edge customers, while emphasizing the company's robust supply chain and customer relationships for navigating these challenges - CEO Gary Dickerson reported **record Q3 performance** and projected the **sixth consecutive year of revenue growth for fiscal 2025**, maintaining confidence in long-term semiconductor industry growth despite near-term macroeconomic and policy uncertainties, especially concerning China[2](index=2&type=chunk) - CFO Brice Hill anticipates a **Q4 revenue decline**, attributing it to capacity digestion in China and non-linear demand from leading-edge customers, while highlighting the company's robust supply chain and customer relationships for navigating these challenges[2](index=2&type=chunk) [Q4 FY2025 Business Outlook](index=3&type=section&id=Q4%20FY2025%20Business%20Outlook) Applied Materials projects total net revenue for the fourth quarter of fiscal 2025 to be approximately $6.70 billion (±$500 million), with a non-GAAP gross margin of 48.1% and non-GAAP diluted EPS of $2.11 (±$0.20) | Metric | Q4 FY2025 Outlook | | :-------------------- | :---------------- | | Total net revenue | $6,700M +/- $500M | | Non-GAAP gross margin | 48.1% | | Non-GAAP diluted EPS | $2.11 +/- $0.20 | [Q3 FY2025 Financial Performance](index=2&type=section&id=Q3%20FY2025%20Financial%20Performance) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Applied Materials reported Q3 FY2025 net revenue of $7,302 million, an 8% increase year-over-year. GAAP diluted EPS rose 8% to $2.22, and non-GAAP diluted EPS increased 17% to $2.48, reflecting strong operational performance and margin expansion | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :----------------------- | :--------- | :--------- | :------- | | Net revenue | $7,302M | $6,778M | 8% | | Gross margin | 48.8% | 47.3% | 1.5 points | | Operating margin | 30.6% | 28.7% | 1.9 points | | Net income | $1,779M | $1,705M | 4% | | Diluted earnings per share | $2.22 | $2.05 | 8% | | Non-GAAP gross margin | 48.9% | 47.4% | 1.5 points | | Non-GAAP operating margin | 30.7% | 28.8% | 1.9 points | | Non-GAAP net income | $1,989M | $1,767M | 13% | | Non-GAAP diluted EPS | $2.48 | $2.12 | 17% | | Non-GAAP free cash flow | $2,050M | $2,088M | (2)% | [Segment Performance](index=3&type=section&id=Segment%20Performance) In Q3 FY2025, Semiconductor Systems revenue grew to $5,427 million with improved operating margins. Applied Global Services maintained strong revenue at $1,600 million, while the Display segment revenue increased to $263 million with a significant rise in operating margin to 23.6% - Semiconductor Systems revenue increased to **$5,427 million** in Q3 FY2025 from $4,924 million in Q3 FY2024, with operating margin improving to **36.2%** (non-GAAP **36.4%**)[6](index=6&type=chunk) - Applied Global Services reported net revenue of **$1,600 million** in Q3 FY2025, slightly up from $1,580 million in Q3 FY2024, though operating margin decreased to **27.8%** (non-GAAP **27.8%**)[6](index=6&type=chunk) - Display segment revenue grew to **$263 million** in Q3 FY2025 from $251 million in Q3 FY2024, with a substantial increase in operating margin to **23.6%** (non-GAAP **23.6%**) from 6.4% in the prior year[6](index=6&type=chunk) [Semiconductor Systems](index=3&type=section&id=Semiconductor%20Systems) The Semiconductor Systems segment reported net revenue of $5,427 million in Q3 FY2025, up from $4,924 million in Q3 FY2024. Foundry, logic and other accounted for 69% of revenue, DRAM for 22%, and Flash memory for 9%, with Flash memory showing a notable increase in contribution | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------- | :--------- | :--------- | | Net revenue | $5,427M | $4,924M | | Operating income | $1,966M | $1,712M | | Operating margin | 36.2% | 34.8% | | Non-GAAP operating income | $1,977M | $1,722M | | Non-GAAP operating margin | 36.4% | 35.0% | | Revenue Mix | Q3 FY2025 | Q3 FY2024 | | :-------------------- | :--------- | :--------- | | Foundry, logic and other | 69% | 72% | | DRAM | 22% | 24% | | Flash memory | 9% | 4% | [Applied Global Services](index=3&type=section&id=Applied%20Global%20Services) Applied Global Services generated $1,600 million in net revenue for Q3 FY2025, a slight increase from the prior year, with an operating margin of 27.8% | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------- | :--------- | :--------- | | Net revenue | $1,600M | $1,580M | | Operating income | $445M | $467M | | Operating margin | 27.8% | 29.6% | | Non-GAAP operating income | $445M | $467M | | Non-GAAP operating margin | 27.8% | 29.6% | [Display](index=3&type=section&id=Display) The Display segment's net revenue for Q3 FY2025 was $263 million, showing growth from $251 million in Q3 FY2024, and its operating margin significantly improved to 23.6% from 6.4% year-over-year | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------- | :--------- | :--------- | | Net revenue | $263M | $251M | | Operating income | $62M | $16M | | Operating margin | 23.6% | 6.4% | | Non-GAAP operating income | $62M | $16M | | Non-GAAP operating margin | 23.6% | 6.4% | [Corporate and Other](index=4&type=section&id=Corporate%20and%20Other) Unallocated net revenue for Corporate and Other was $12 million in Q3 FY2025, with total unallocated costs and expenses amounting to $(240) million | Metric | Q3 FY2025 | Q3 FY2024 | | :------------------------------------ | :--------- | :--------- | | Unallocated net revenue | $12M | $23M | | Unallocated cost of products sold and expenses | $(252)M | $(276)M | | Total | $(240)M | $(253)M | [Geographic Revenue & Employee Information](index=9&type=section&id=Geographic%20Revenue%20%26%20Employee%20Information) [Geographic Revenue & Employee Information](index=9&type=section&id=Geographic%20Revenue%20%26%20Employee%20Information) In Q3 FY2025, China was the largest geographic market, contributing 35% of total net revenue ($2,548 million), up from 32% in Q3 FY2024. Taiwan also significantly increased its contribution to 25% of total revenue. The company's regular full-time employee count increased to 36.1 thousand | Geography | Q3 FY2025 Net Revenue (Millions) | % of Total | Q3 FY2024 Net Revenue (Millions) | % of Total | | :---------------- | :------------------------------ | :--------- | :------------------------------ | :--------- | | United States | $683 | 9% | $1,053 | 16% | | Europe | $160 | 2% | $339 | 5% | | Japan | $713 | 10% | $555 | 8% | | Korea | $1,160 | 16% | $1,102 | 16% | | Taiwan | $1,843 | 25% | $1,148 | 17% | | Southeast Asia | $195 | 3% | $428 | 6% | | China | $2,548 | 35% | $2,153 | 32% | | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------- | :--------- | :--------- | | Regular Full Time Employees (thousands) | 36.1 | 35.2 | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Statements of Operations](index=6&type=section&id=Statements%20of%20Operations) The unaudited consolidated condensed statements of operations show net revenue of $7,302 million for the three months ended July 27, 2025, with a net income of $1,779 million and diluted EPS of $2.22. For the nine months, net revenue was $21,568 million and net income was $5,101 million | Metric (3 Months Ended) | July 27, 2025 | July 28, 2024 | | :---------------------- | :------------ | :------------ | | Net revenue | $7,302M | $6,778M | | Gross profit | $3,562M | $3,205M | | Income from operations | $2,233M | $1,942M | | Net income | $1,779M | $1,705M | | Diluted earnings per share | $2.22 | $2.05 | | Metric (9 Months Ended) | July 27, 2025 | July 28, 2024 | | :---------------------- | :------------ | :------------ | | Net revenue | $21,568M | $20,131M | | Gross profit | $10,543M | $9,562M | | Income from operations | $6,577M | $5,821M | | Net income | $5,101M | $5,446M | | Diluted earnings per share | $6.29 | $6.52 | [Balance Sheets](index=7&type=section&id=Balance%20Sheets) As of July 27, 2025, total assets were $34,211 million, slightly down from $34,409 million at October 27, 2024. Total current assets decreased, while long-term investments and property, plant and equipment increased. Total stockholders' equity grew to $19,504 million | Metric | July 27, 2025 | October 27, 2024 | | :------------------------------------ | :------------ | :--------------- | | Total current assets | $19,718M | $21,220M | | Long-term investments | $4,133M | $2,787M | | Property, plant and equipment, net | $4,124M | $3,339M | | Total assets | $34,211M | $34,409M | | Total current liabilities | $7,883M | $8,468M | | Total liabilities | $14,707M | $15,408M | | Total stockholders' equity | $19,504M | $19,001M | [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) For the three months ended July 27, 2025, cash provided by operating activities was $2,634 million, while cash used in investing activities was $(1,967) million and cash used in financing activities was $(1,457) million, resulting in a decrease in cash and cash equivalents. For the nine months, cash provided by operating activities was $5,130 million, with cash used in investing and financing activities of $(2,643) million and $(5,146) million, respectively | Metric (3 Months Ended) | July 27, 2025 | July 28, 2024 | | :------------------------------------ | :------------ | :------------ | | Cash provided by operating activities | $2,634M | $2,385M | | Cash used in investing activities | $(1,967)M | $(660)M | | Cash used in financing activities | $(1,457)M | $(522)M | | Increase (decrease) in cash, cash equivalents and restricted cash equivalents | $(790)M | $1,203M | | Cash, cash equivalents and restricted cash equivalents — end of period | $5,454M | $8,378M | | Metric (9 Months Ended) | July 27, 2025 | July 28, 2024 | | :------------------------------------ | :------------ | :------------ | | Cash provided by operating activities | $5,130M | $6,102M | | Cash used in investing activities | $(2,643)M | $(1,256)M | | Cash used in financing activities | $(5,146)M | $(2,701)M | | Increase (decrease) in cash, cash equivalents and restricted cash equivalents | $(2,659)M | $2,145M | | Cash, cash equivalents and restricted cash equivalents — end of period | $5,454M | $8,378M | [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Applied Materials utilizes non-GAAP financial measures to assess operating and financial performance, adjusting for specific costs, expenses, gains, and losses such as those related to acquisitions, restructuring, impairments, and certain tax items. These measures are intended to provide a clearer view of ongoing operational performance and facilitate period-over-period comparisons, though they are not a substitute for GAAP results - Applied Materials uses non-GAAP financial measures to evaluate performance and for planning, adjusting for items like acquisition-related costs, restructuring charges, asset impairments, and certain tax items[8](index=8&type=chunk) - These non-GAAP measures aim to enhance understanding of the company's ongoing operating performance and facilitate consistent comparisons, but they are not prepared in accordance with GAAP and should not be considered in isolation[8](index=8&type=chunk) [GAAP to Non-GAAP Reconciliation (Consolidated)](index=10&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation%20(Consolidated)) This section provides detailed reconciliations of GAAP to non-GAAP figures for consolidated gross profit, operating income, net income, and diluted earnings per share, highlighting adjustments for acquisition-related items, strategic investments, and various tax effects [Gross Profit Reconciliation](index=10&type=section&id=Gross%20Profit%20Reconciliation) Non-GAAP gross profit for Q3 FY2025 was $3,569 million (48.9% margin), adjusted from GAAP gross profit of $3,562 million by adding $7 million for certain acquisition-related items | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------------- | :--------- | :--------- | | GAAP reported gross profit | $3,562M | $3,205M | | Certain items associated with acquisitions | $7M | $6M | | Non-GAAP gross profit | $3,569M | $3,211M | | Non-GAAP gross margin | 48.9% | 47.4% | [Operating Income Reconciliation](index=10&type=section&id=Operating%20Income%20Reconciliation) Non-GAAP operating income for Q3 FY2025 was $2,245 million (30.7% margin), adjusted from GAAP operating income of $2,233 million by adding $11 million for acquisition-related items and $1 million for acquisition integration costs | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------------- | :--------- | :--------- | | GAAP reported operating income | $2,233M | $1,942M | | Certain items associated with acquisitions | $11M | $10M | | Acquisition integration and deal costs | $1M | $1M | | Non-GAAP operating income | $2,245M | $1,953M | | Non-GAAP operating margin | 30.7% | 28.8% | [Net Income Reconciliation](index=10&type=section&id=Net%20Income%20Reconciliation) Non-GAAP net income for Q3 FY2025 was $1,989 million, adjusted from GAAP net income of $1,779 million. Key adjustments included a $(314) million unrealized gain on strategic investments, $460 million for resolution of prior years' income tax filings, and $32 million for intra-entity intangible asset transfers | Metric | Q3 FY2025 | Q3 FY2024 | | :---------------------------------------------------- | :--------- | :--------- | | GAAP reported net income | $1,779M | $1,705M | | Certain items associated with acquisitions | $11M | $10M | | Acquisition integration and deal costs | $1M | $1M | | Realized loss (gain), dividends and impairments on strategic investments, net | $16M | $16M | | Unrealized loss (gain) on strategic investments, net | $(314)M | $25M | | Income tax effect of share-based compensation | $7M | $8M | | Income tax effects related to intra-entity intangible asset transfers | $32M | $17M | | Resolution of prior years' income tax filings and other tax items | $460M | $(11)M | | Income tax effect of non-GAAP adjustments | $(3)M | $(4)M | | Non-GAAP net income | $1,989M | $1,767M | - The Q3 FY2025 non-GAAP net income adjustment included the impact of the recognition of a **$410 million valuation allowance** against deferred tax assets related to corporate alternative minimum tax credits[20](index=20&type=chunk) [Earnings Per Diluted Share Reconciliation](index=11&type=section&id=Earnings%20Per%20Diluted%20Share%20Reconciliation) Non-GAAP diluted EPS for Q3 FY2025 was $2.48, adjusted from GAAP diluted EPS of $2.22. Significant adjustments included a $(0.39) impact from unrealized loss (gain) on strategic investments and a $0.57 impact from the resolution of prior years' income tax filings | Metric | Q3 FY2025 | Q3 FY2024 | | :---------------------------------------------------- | :--------- | :--------- | | GAAP reported earnings per diluted share | $2.22 | $2.05 | | Certain items associated with acquisitions | $0.01 | $0.01 | | Realized loss (gain), dividends and impairments on strategic investments, net | $0.02 | $0.01 | | Unrealized loss (gain) on strategic investments, net | $(0.39) | $0.03 | | Income tax effect of share-based compensation | $0.01 | $0.01 | | Income tax effects related to intra-entity intangible asset transfers | $0.04 | $0.02 | | Resolution of prior years' income tax filings and other tax items | $0.57 | $(0.01) | | Non-GAAP earnings per diluted share | $2.48 | $2.12 | - The Q3 FY2025 non-GAAP diluted EPS adjustment included a **$0.51 per diluted share impact** from the recognition of a valuation allowance against deferred tax assets related to corporate alternative minimum tax credits[23](index=23&type=chunk) [GAAP to Non-GAAP Reconciliation (Segment)](index=12&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation%20(Segment)) This section provides reconciliations of GAAP to non-GAAP operating income for each reportable segment: Semiconductor Systems, Applied Global Services, and Display, primarily adjusting for certain acquisition-related items [Semiconductor Systems Operating Income Reconciliation](index=12&type=section&id=Semiconductor%20Systems%20Operating%20Income%20Reconciliation) Non-GAAP operating income for Semiconductor Systems in Q3 FY2025 was $1,977 million (36.4% margin), adjusted from GAAP operating income of $1,966 million by adding $11 million for acquisition-related items | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------------- | :--------- | :--------- | | GAAP reported operating income | $1,966M | $1,712M | | Certain items associated with acquisitions | $11M | $10M | | Non-GAAP operating income | $1,977M | $1,722M | | Non-GAAP operating margin | 36.4% | 35.0% | [Applied Global Services Operating Income Reconciliation](index=12&type=section&id=Applied%20Global%20Services%20Operating%20Income%20Reconciliation) Applied Global Services' non-GAAP operating income for Q3 FY2025 was $445 million (27.8% margin), which was consistent with its GAAP operating income | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------------- | :--------- | :--------- | | GAAP reported operating income | $445M | $467M | | Non-GAAP operating income | $445M | $467M | | Non-GAAP operating margin | 27.8% | 29.6% | [Display Operating Income Reconciliation](index=12&type=section&id=Display%20Operating%20Income%20Reconciliation) The Display segment's non-GAAP operating income for Q3 FY2025 was $62 million (23.6% margin), matching its GAAP operating income | Metric | Q3 FY2025 | Q3 FY2024 | | :-------------------------- | :--------- | :--------- | | GAAP reported operating income | $62M | $16M | | Non-GAAP operating income | $62M | $16M | | Non-GAAP operating margin | 23.6% | 6.4% | [Non-GAAP Effective Income Tax Rate Reconciliation](index=13&type=section&id=Non-GAAP%20Effective%20Income%20Tax%20Rate%20Reconciliation) The non-GAAP effective income tax rate for Q3 FY2025 was 12.6%, significantly lower than the GAAP effective income tax rate of 30.6%, primarily due to adjustments for share-based compensation, intra-entity intangible asset transfers, and the resolution of prior years' income tax filings | Metric | Q3 FY2025 | | :---------------------------------------------------- | :--------- | | GAAP provision for income taxes (a) | $784M | | Income tax effect of share-based compensation | $(7)M | | Income tax effects related to intra-entity intangible asset transfers | $(32)M | | Resolutions of prior years' income tax filings and other tax items | $(460)M | | Income tax effect of non-GAAP adjustments | $3M | | Non-GAAP provision for income taxes (b) | $288M | | GAAP income before income taxes (c) | $2,563M | | Non-GAAP income before income taxes (d) | $2,277M | | GAAP effective income tax rate (a/c) | 30.6% | | Non-GAAP effective income tax rate (b/d) | 12.6% | [Non-GAAP Free Cash Flow Reconciliation](index=13&type=section&id=Non-GAAP%20Free%20Cash%20Flow%20Reconciliation) Non-GAAP free cash flow for Q3 FY2025 was $2,050 million, derived from $2,634 million in cash provided by operating activities less $584 million in capital expenditures | Metric | Q3 FY2025 | Q3 FY2024 | | :------------------------------------ | :--------- | :--------- | | Cash provided by operating activities | $2,634M | $2,385M | | Capital expenditures | $(584)M | $(297)M | | Non-GAAP free cash flow | $2,050M | $2,088M | [Additional Information & Disclosures](index=4&type=section&id=Additional%20Information%20%26%20Disclosures) [Webcast Information](index=4&type=section&id=Webcast%20Information) Applied Materials will host an earnings call and live webcast at 1:30 p.m. Pacific Time, with a replay available on their investor relations website - An earnings call and live webcast will be held at **1:30 p.m. Pacific Time**, with a replay accessible on https://ir.appliedmaterials.com[9](index=9&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding anticipated growth, market trends, financial performance, and strategic initiatives, which are subject to various risks and uncertainties including demand levels, global economic conditions, export regulations, trade issues, and geopolitical factors - The press release includes forward-looking statements about anticipated growth, market trends, and financial performance, which are not guarantees of future results[10](index=10&type=chunk) - Factors that could cause actual results to differ materially include demand for products, global economic and political conditions, export regulations, trade issues, and geopolitical turmoil[10](index=10&type=chunk) [About Applied Materials](index=5&type=section&id=About%20Applied%20Materials) Applied Materials, Inc. is a leader in materials engineering solutions, providing foundational technology for semiconductors and advanced displays, essential for advancing AI and next-generation chips - Applied Materials, Inc. is a leader in materials engineering solutions, foundational to semiconductors and advanced displays[11](index=11&type=chunk) - The company's technology is crucial for advancing AI and accelerating the commercialization of next-generation chips[11](index=11&type=chunk)

Core Insights - Applied Materials reported record performance in Q3 FY2025, achieving net revenue of $7.30 billion, an 8% increase year-over-year, and is on track for its sixth consecutive year of revenue growth in fiscal 2025 [2][6] - The company anticipates a decline in revenue for Q4 FY2025 due to capacity digestion in China and non-linear demand from leading-edge customers [2][3] Financial Performance - Q3 FY2025 net revenue was $7,302 million compared to $6,778 million in Q3 FY2024, reflecting an 8% increase [3] - Gross margin improved to 48.8% from 47.3% year-over-year, while operating margin increased to 30.6% from 28.7% [3][6] - Net income for Q3 FY2025 was $1,779 million, up 4% from $1,705 million in Q3 FY2024, with diluted earnings per share rising to $2.22 from $2.05 [3][6] Non-GAAP Results - Non-GAAP gross margin for Q3 FY2025 was 48.9%, up from 47.4% in Q3 FY2024, and non-GAAP operating margin was 30.7%, compared to 28.8% [3][6] - Non-GAAP net income reached $1,989 million, a 13% increase from $1,767 million in the previous year, with non-GAAP diluted EPS at $2.48, up 17% from $2.12 [3][6] Business Outlook - For Q4 FY2025, total net revenue is expected to be approximately $6,700 million, with a non-GAAP gross margin of 48.1% and non-GAAP diluted EPS projected at $2.11 [5] - The company is navigating near-term uncertainties by leveraging its robust supply chain and global manufacturing footprint [2] Segment Performance - Semiconductor Systems segment net revenue was $5,427 million in Q3 FY2025, up from $4,924 million in Q3 FY2024, with an operating income of $1,966 million [8] - Applied Global Services segment reported net revenue of $1,600 million, slightly up from $1,580 million, while Display segment net revenue increased to $263 million from $251 million [8] Geographic Revenue Distribution - In Q3 FY2025, revenue from China was $2,548 million, up from $2,153 million in Q3 FY2024, representing 35% of total revenue [21][22] - Revenue from Taiwan increased significantly to $1,843 million from $1,148 million, accounting for 25% of total revenue [21][22]

Core Viewpoint - Beijing Yitang Semiconductor Technology Co., Ltd. (Yitang) has filed a lawsuit against Applied Materials, Inc. (AMAT) for allegedly misappropriating its trade secrets related to plasma sources and wafer surface treatment, claiming damages of 99.99 million RMB [1][2] Group 1: Legal Proceedings - Yitang has initiated legal action in the Beijing Intellectual Property Court, asserting that AMAT unlawfully acquired and utilized its core technology secrets and disclosed them through a patent application in China [1][2] - The lawsuit has been officially filed, but the court has yet to schedule a hearing [1] - Yitang claims that the lawsuit will not significantly impact its operations or production [1] Group 2: Technology and Intellectual Property - The technology in question involves high-concentration, stable, and uniform plasma used for wafer surface treatment, which is critical for Yitang's semiconductor processing equipment [1] - The two employees involved in the case were previously employed by Yitang's wholly-owned subsidiary, Mattson Technology, Inc. (MTI), and had signed confidentiality agreements regarding the technology [2] - Evidence suggests that AMAT submitted a patent application to the Chinese National Intellectual Property Administration, naming the two former MTI employees as primary inventors, thereby disclosing Yitang's trade secrets [2] Group 3: Impact on Business - Yitang alleges that AMAT's actions have caused significant damage to its intellectual property and economic interests, including promoting and selling products that utilize the misappropriated technology in China [2]

Core Viewpoint - Beijing Yitang Semiconductor Technology Co., Ltd. has filed a lawsuit against Applied Materials, Inc. for allegedly illegally obtaining and using its core technology secrets related to plasma sources and wafer surface treatment, which has caused significant damage to its intellectual property and economic interests [3][7]. Group 1: Lawsuit Details - The lawsuit was filed in the Beijing Intellectual Property Court, with the case number (2025) Jing 73 Min Chu 908 [3]. - Yitang claims that Applied Materials has violated the Anti-Unfair Competition Law of the People's Republic of China by disclosing and claiming ownership of its technology secrets through a patent application [3][7]. - The company seeks several legal remedies, including stopping the defendant from further obtaining its technology secrets, destroying any related materials, and compensating for economic losses totaling 99,990,000 yuan [7][8]. Group 2: Technology and Business Background - Yitang's key technology involves the use of high-concentration, stable plasma for wafer surface treatment, which is essential for dry stripping, dry etching, and surface modification in semiconductor processing [6][8]. - The company has a strong original technology capability in this field and owns relevant trade secrets [6]. - Yitang's main business includes manufacturing dry stripping, rapid thermal processing, and dry etching equipment, which are critical processes in chip manufacturing [8].

Core Viewpoint - The lawsuit filed by Yitang Co., Ltd. against Applied Materials Inc. (AMAT) is aimed at protecting intellectual property rights and addressing the alleged illegal acquisition and use of core technology secrets related to plasma sources and wafer surface treatment [2][5][7]. Group 1: Lawsuit Details - Yitang Co., Ltd. has initiated legal proceedings against AMAT for allegedly obtaining and using its core technology secrets without authorization, which were subsequently disclosed through a patent application in China [2][5]. - The company is seeking a court order to stop AMAT from using its technology secrets and is claiming economic damages totaling 99.99 million yuan [2][5]. Group 2: Technology and Innovation - The technology in question involves high-concentration, stable, and uniform plasma used for wafer surface treatment, which is critical for various semiconductor processing equipment [5]. - Yitang Co., Ltd. claims to possess leading original technology capabilities in this field and has relevant trade secrets [5]. Group 3: Employee Recruitment and Confidentiality - AMAT allegedly recruited two employees from Yitang's subsidiary, Mattson Technology, Inc. (MTI), who had access to the core technology secrets and had signed confidentiality agreements [5][7]. - Evidence suggests that after their recruitment, these employees contributed to a patent application that disclosed the technology secrets shared between Yitang and MTI [5][7]. Group 4: Impact on Business - The lawsuit is positioned as a measure to protect the company's intellectual property and is not expected to have a significant adverse impact on its operations, with the final outcome dependent on the court's ruling [5]. - The alleged actions of AMAT are said to have caused serious damage to Yitang's intellectual property and economic interests, including promoting and selling products using the disputed technology in China [7]. Group 5: Industry Context - Applied Materials Inc. is a major player in the semiconductor equipment industry, with 2024 revenues projected to exceed $25 billion, making it the second-largest supplier globally, following ASML [7].

Core Viewpoint - The semiconductor materials industry is crucial for chip manufacturing, encompassing essential materials like silicon wafers, photolithography resins, and electronic gases, which are vital for technological advancement and industry growth [2][4]. Group 1: Semiconductor Materials Overview - Semiconductor materials play a core role in chip manufacturing, ensuring complete functionality and superior performance of chips, which is significant for technological progress [4]. - The industry includes various generations of materials, from the first generation (germanium, silicon) to the third generation (gallium nitride, silicon carbide), each with unique properties and applications [6][10]. Group 2: Market Dynamics - In 2024, the global semiconductor materials market is projected to reach $628 billion, with a year-on-year growth of 19.1% [30]. - Japan holds a significant market share of 52% in the global semiconductor materials market, indicating its strong position and expertise in this field [19]. - China is focusing on increasing the domestic production rate of high-end semiconductor materials to reduce reliance on imports and ensure supply chain security [23][30]. Group 3: Domestic Developments - China's 12-inch silicon wafer domestic production rate is currently below 10%, but companies like Shanghai Silicon Industry and Lian Micro are expanding capacity to increase market share [26][59]. - The domestic market for ArF photolithography resins is even lower, at less than 5%, although companies like Nanda Optoelectronics are making progress in this area [28]. Group 4: Policy and Investment - The National Integrated Circuit Industry Investment Fund has provided 344 billion yuan to support the semiconductor materials industry, driving technological innovation and stability [29]. - The U.S. CHIPS Act allocates $52 billion to enhance domestic semiconductor manufacturing capabilities, aiming to reduce foreign dependency and promote innovation [31]. Group 5: Industry Trends - The semiconductor materials industry is expected to experience accelerated domestic substitution, with a focus on technological breakthroughs and expanding application scenarios [33]. - By 2028, the domestic production rate of third-generation semiconductor materials is anticipated to exceed 50%, indicating a significant shift towards local manufacturing [134]. Group 6: Key Players and Innovations - Major players in the semiconductor materials sector include companies like TCL Technology, North Huachuang, and Sanan Optoelectronics, which are leading in various segments [101][102]. - Innovations in materials such as silicon carbide substrates and advanced packaging technologies are driving the industry's growth and competitiveness [96][100].

Group 1: A-Share Market Performance - The A-share market continues to show strong upward momentum, with the Shanghai Composite Index breaking through the previous high of 3674 points, reaching a nearly four-year high [1] - A total of 2733 stocks rose, with 100 stocks hitting the daily limit, while 2458 stocks declined [1] - The total trading volume for the Shanghai and Shenzhen markets reached 2.15 trillion yuan, an increase of 269.4 billion yuan from the previous trading day, marking a return to above 2 trillion yuan after 114 trading days [1] Group 2: AI Industry Chain Stocks - AI industry chain stocks experienced significant gains, with companies like Guangku Technology and Robotech hitting the daily limit of 20%, while Xinyi Sheng rose over 15% and Zhongji Xuchuang nearly 12% [2] - Industrial Fulian reported a revenue of 360.76 billion yuan for the first half of 2025, a year-on-year increase of 35.58%, and a net profit of 12.11 billion yuan, up 38.61% year-on-year [2] - The company attributes its growth to breakthroughs in large models and generative AI, predicting a surge in demand for high-end AI servers driven by increased capital expenditure from major North American cloud service providers [2] Group 3: Industrial Fulian's Business Performance - Industrial Fulian is enhancing its collaboration with top tech companies in North America and Asia-Pacific, showing strong growth in core business profitability and order volume [3] - The company reported over 50% growth in overall server revenue in Q2, with cloud service provider server revenue increasing over 150% and AI server revenue up over 60% year-on-year [3] - The GB200 series products are ramping up production with improving yield rates and increasing shipment volumes [3] Group 4: Litigation of Yitang Co., Ltd. - Yitang Co., Ltd. has filed a lawsuit against Applied Materials for 99.99 million yuan, claiming infringement of trade secrets related to plasma sources and wafer surface treatment technologies [4] - The company alleges that Applied Materials illegally obtained and used its core technology and disclosed it through a patent application in China [4] - Yitang emphasizes its commitment to original research and the protection of intellectual property rights, stating that the lawsuit will not significantly impact its operations [6] Group 5: Control Change in Ruixin Technology - Ruixin Technology announced a change in control, with Huangshan Kaitou Lingtou Investment Co., Ltd. becoming the new controlling shareholder after acquiring 40.3 million shares, representing 24.22% of the total share capital [7] - The previous shareholders agreed to relinquish their voting rights and not seek control of the company [7] - Ruixin Technology specializes in electrical automation equipment components and automotive lightweight and thermal management systems [7]

Core Viewpoint - The article discusses the lawsuit filed by Yitang Co., a domestic semiconductor equipment manufacturer, against Applied Materials (AMAT) for allegedly misappropriating its core technology secrets related to plasma sources and wafer surface treatment [2][5]. Group 1: Lawsuit Details - Yitang Co. has filed a lawsuit in the Beijing Intellectual Property Court against AMAT for illegally obtaining and using its core technology secrets, which were disclosed in a patent application in China [2][6]. - The company is seeking a total compensation of 99.99 million yuan for economic losses and reasonable expenses related to the infringement [2][5]. - The lawsuit aims to protect the intellectual property rights of innovators and maintain the company's legal rights without significantly impacting its operations [5]. Group 2: Technology and Market Position - Yitang Co. specializes in high-concentration, stable, and uniform plasma technology, which is crucial for its semiconductor processing equipment, including dry stripping, dry etching, and surface treatment [5][6]. - The company claims to possess leading original technology capabilities in this field and has relevant trade secrets [5]. - Applied Materials, founded in 1967, is the second-largest semiconductor equipment supplier globally, with projected revenues exceeding $25 billion in 2024, following ASML [6].