|AMAT CC: mega-trends driving robust WFE spend stronger than 6 months ago...|
ASML told us over a decade ago Litho would be a bigger slice of the bigger pie.
With HMI eScan1000 and Cymer NXE & EXE, the SEMI Index is becoming the ASML Index.
Would not be surprised to hear 300 watts has already be achieved.
All the Leading Edge guys throwing simply yuge bucks at EUV. For good reason.
EVERYTHING MUST shrink and move closer to The Logic.
Q - StacyRasgon
Thank you. Thank you. Now, Gary in this format I’d like to stay away from the near term stuff. Today just given what's going on, I'm not sure I'm going to be able to avoid it. But before we go down that rabbit hole, I do want to start higher level and more open ended. I mean, again, consistent with some of my earlier comments, near term cyclicality and virus aside, I mean the structural attractiveness of the semi cap industry has, at least to my eyes, greatly improved over the last decade plus. I mean, the contributions and value that the sector is adding to semis especially as Moore’s Law gets ever more difficult to be growing every year. Cyclicality is still there, but it seems to be reduced. The semi cap companies are now profitable I believe -- well, very profitable I believe even at the trough of the cycle. The magnitude is very big or bigger. I mean even trough levels of WFE spend today seem to be decently above where the historical peaks sat. So I was just hoping you could give us just a minute or two of your thoughts on where you kind of see semi cap is broadly, kind of obviously you've been in the industry for a long, long time, where you see it going? And at least at the high level for the moment, how you think AMAT fits into that story?
Well, thanks. Thanks for the question, Stacy. So, we look at this near-term challenge that we're facing. Technology is going to transform every industry and we see that every day in this current situation. E-commerce certainly has been accelerated. I have 10 year old twins, a little boy, little girl. They get up every morning and do their remote school, their remote learning, every -- again, all of these changes are going to be the most profound that we've ever seen over the next decade. And it's all accelerating in this current environment. And I can talk later about how Applied and how we will work different going forward based on technology. But if you go back over many years, you went from mainframe to PC, PC to mobile social media with a camera and computer in your pocket. And now we have AI big data transforming every aspect of our lives, a trillion connected devices over the next decade and generating all of that data, storing, processing, connecting all of that data, biggest opportunity of our lifetimes. At the same time, you talked about Moore's Law slowing down. I think it's very evident. You look at the rate of technology transitions are much longer and much more difficult. And our customers care about performance, power, area, cost and time. So PPACAT as the big driver. And when you think about the infrastructure for these trillion connected devices on the edge or the cloud and the power and performance that you need to enable that future data economy, you cannot scale what exists today. You have to innovate. And the innovation is not going to be just shrinking in two dimensions. Again, you'll see many, many people talking about new architectures, new device architectures, new structures, new ways to shrink, new ways to connect devices together, new materials.
Those five drivers you see repeated by a number of different people in enabling the future and Applied is in the best position we've ever been in because we have the broadest portfolio to create, shape, modify, analyze and connect structures and devices. So our relationships with our customers have never been better. You have the biggest inflection of our lifetimes at the same time that you can't scale what exists today and enable that future. So that's a tremendous, tremendous driver for us. We've talked about the next few quarters and this year seeing strong double-digit growth. So even in this current environment, applied is extremely well positioned. And I would say over the long-term, we've never been in a better position than where we're at today. I don't know, Dan, if you want to add anything to that.
Yes, I couldn't agree more. Gary. The megatrends that are shaping semis and by implication, semi cap equipment industry are firmly intact, and I would argue they are even stronger today than they were maybe six months ago. And as you take a look at what's happening, work from home, school from home. Companies are thinking about how they're going to optimize their operational footprint and flexibility, how they're going to build that into the system. When you think about localization of supply chains, whether it's geopolitical or COVID related, localization of supply chains, There is going to be a stronger demand for automation and intelligence into those supply chains. And all of those come together, I think, to make those megatrends that shape our industry even stronger today than they were six months ago. So I couldn't agree more with where Gary is going and the opportunity set in front of us. It's never looked this good.