Applied Materials Delivers Strong FY 2022 Numbers including Picosun ALD

Semiconductor equipment maker Applied Materials has reported strong earnings for FY 2022 (ended October 30). Total sales revenue increased 12% YoY to $25.78 billion despite supply chain shortages, geopolitical and macroeconomic headwinds, and softening consumer demand.

LINK: https://ir.appliedmaterials.com/

The company’s uniquely enabling technology and growing installed base will be its key growth drivers as chipmakers accelerate ramping up of new process nodes in R&D for high-volume manufacturing.

Key developments in FY 2022

• Applied Materials acquired Picosun, a Finland-based innovator in atomic layer deposition (ALD) technology. This acquisition broadens Applied’s product portfolio and puts it in a great position to capture a large portion of the specialty semiconductor market in the coming years.
• Collaboration with the Institute of Microelectronics (IME), a research institute under Singapore’s Agency for Science, Technology and Research (A*STAR). IME’s strategic R&D capabilities complement well Applied’s expertise in advanced packaging solutions and will accelerate material, equipment and process technology solutions for hybrid bonding and other emerging, 3D chip integration technologies.
• Introduced new Ioniq™ PVD system to solve wiring resistance challenges of 2D scaling. This new integrated solution offers a significant reduction in electrical resistance, which has become a critical bottleneck to further improvements in chip performance and power.

Financial highlights

• Semiconductor Systems revenue increased 15% YoY in FY 2022 to $18,797 million on account of strong orders as customers continued to invest in next-generation technology.
• Applied Materials’ service revenue increased 11% YoY in FY 2022 to $5,543 million, accounting for 21% of the annual net revenue.
• Display and Adjacent Markets revenue decreased 19% YoY in FY 2022 to $ 1,331 million.
• Non-GAAP gross margin was at 46.6% in FY 2022.
• Non-GAAP operating profit grew by over 7% to $7.86 billion.
• Non-GAAP EPS increased nearly 13% to $7.70.
• Total ending backlog increased 62% to $19 billion with Semiconductor Systems backlog increasing 90% to nearly $12.7 billion and services backlog increasing 30% to over $5.6 billion.
• The company generated about $5.4 billion in operating cash flow and over $4.6 billion in free cash flow.
• The company’s installed base grew 8% YoY in FY 2022.
• The number of tools under comprehensive, long-term service contracts grew 16% YoY with the over 90% renewal rate for these agreements demonstrating the value customers see in subscription services.
• New export regulations for US semiconductor technology sold in China reduced Semiconductor Systems and AGS fourth quarter revenue by approximately $280 million.