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Applied Materials

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About Applied Materials

Today, semiconductor manufacturing; tomorrow, the world -- of alternative energy sources. Applied Materials is, by far, the world's largest maker of semiconductor production equipment. With the acquisition of Applied Films, the company moved into the market for equipment used in making solar power cells. Applied's machines vie for supremacy in many – more... segments of the chip-making process, including deposition (layering film on wafers), etching (removing portions of chip material to allow precise construction of circuits), and semiconductor metrology and inspection equipment. About 70% of Applied's sales come from the Asia/Pacific region, with China leading the way at nearly a quarter.

Leading customers for Applied's chip making equipment -- which include Samsung Electronics (12% of sales), Intel (10%), Taiwan Semiconductor Manufacturing Company (10%), Advanced Micro Devices, and Freescale Semiconductor -- are increasingly moving manufacturing plants to countries in Asia where labor costs are lower. In order to be closer to its customers, Applied Materials has established R&D, support, and manufacturing facilities outside the US, with primary offices in China, Germany, India, Israel, Italy, Singapore, South Korea, Switzerland, and Taiwan. The company also outsources certain of its manufacturing and supply chain functions to third parties that are located in the US, India, China, South Korea, and Malaysia, among other countries.

Applied does more than make equipment for manufacturing semiconductors, though its silicon systems group segment is the foundation of the company and its largest segment at 51% of sales. Equipment used to make solar cells is part of the company's energy and environmental solutions segment (19% of sales), which also makes coating systems for flexible electronics and and equipment used to manufacture energy-efficient glass. Applied global services is the company's second largest segment with 23% of sales; that unit makes a range of products that includes spare parts, services, legacy products, and remanufactured equipment, all of which is intended to improve efficiency and lower costs by reducing the environmental impact of its customers' factories. As part of its much smaller display segment (7%), Applied makes equipment used to manufacture liquid-crystal displays (LCDs) for TVs, PCs, touch panels, and video-enabled devices.

As semiconductors are incorporated into more and more products -- from kitchen appliances to cars and TVs -- demand for ever-smaller and more complex chips grows. Just as quickly, chip-making machinery becomes obsolete, which can be good news for Applied's sales. To keep up with the chip industry's constant drive toward smaller circuits, larger wafers, and new technologies such as copper interconnects, Applied relies heavily R&D efforts. The company spends more than 10% of sales on R&D each year.

A down cycle in the highly cyclical semiconductor manufacturing industry -- combined with the global economic downturn and tight credit markets in 2008 and 2009 -- caused Applied's sales to plummet by more than a third in fiscal 2009. The following year, Applied saw a significant increase in demand across its semiconductor, display, and crystalline-silicon (c-Si) solar PV product lines, as chip makers invested in next-generation equipment. Only its thin-film solar products (specifically the integrated SunFab system) saw sales fall with lack of demand.

Overall sales in fiscal 2011 were up 10% to $10.5 billion, a record for annual sales, and net income increased 105% to $1.9 billion. In spite of a decline in orders for the year, Applied's sales rose on increased investment in c-Si solar equipment and higher spares and refurbished equipment sales. Higher sales and lower operating expenses, offset by increased interest and other expenses and restructuring charges, were responsible for the increase in profits. Geographically sales were up 65% in China.

Applied has used a combination of acquisitions and internal development to bolster its moves into the few areas of chip manufacturing -- such as atomic layer deposition and ion implantation -- where it wasn't already a major player. In 2011 Applied bought Varian Semiconductor Equipment Associates (VSEA) in a transaction valued at about $4.2 billion. Globally, VSEA is the leading manufacturer of ion implantation equipment, used by chip makers to alter the electrical properties of integrated circuits. Combined, the companies offer a broad portfolio of products used in transistor formation, a critical step in making faster and more energy-efficient chips for mobile applications. Ion implant technology also has potential to expand into adjacent markets such as solar, display, and LED components. VSEA operates as a business unit within Applied's Silicon Systems Group.

Applied has continued to refine its product offerings. In 2010 the company restructured its energy and environmental solutions unit, opting to discontinue selling integrated SunFab products though it continues to offer individual tools for thin-film solar manufacturing. It will focus on c-Si solar and other energy products including LED lighting technology. – less

Applied Materials Employer Reviews

Big data Solution Architect (Current Employee), Santa Clara, CAFebruary 8, 2015
Logistics and Planning Manager (Former Employee), Santa Clara, CAJanuary 29, 2015
Applications Engineer (Former Employee), Santa Clara, CAJanuary 19, 2015
IIS Administrator (Former Employee), Santa Clara, CAJanuary 8, 2015
Packaging , Data Base, Oracle , Customer Service (Former Employee), Austin, TXJanuary 7, 2015

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