Applied Materials


Applied Materials, Inc. is an American corporation that supplies equipment, services and software for the manufacture of semiconductor chips for electronics, flat panel displays for computers, smartphones and televisions, and solar products. The company also supplies equipment to produce coatings for flexible electronics, packaging and other applications. The company is headquartered in Santa Clara, California, in Silicon Valley.

History

Founded in 1967 by Michael A. McNeilly and others, Applied Materials went public in 1972. In subsequent years, the company diversified, until James C. Morgan became CEO in 1976 and returned the company's focus to its core business of semiconductor manufacturing equipment. By 1978, sales increased by 17%.
In 1984, Applied Materials became the first U.S. semiconductor equipment manufacturer to open its own technology center in Japan and the first semiconductor equipment company to operate a service center in China. In 1987, Applied introduced a CVD machine called the Precision 5000, which differed from existing machines by incorporating diverse processes into a single machine that had multiple process chambers.
In 1992, the corporation settled a lawsuit with three former employees for an estimated $600,000. The suit complained that the employees were driven out of the company after complaining about the courses Applied Scholastics had been hired to teach there.
In 1993, the Applied Materials' Precision 5000 was inducted into the Smithsonian Institution's permanent collection of Information Age technology.
In November 1996, Applied Materials acquired two Israeli companies for an aggregate amount of $285 million. Opal Technologies and Orbot Instruments for $175 million and $110 million in cash, respectively. Orbot produces systems for inspecting patterned silicon wafers for yield enhancement during the semiconductor manufacturing process, as well as systems for inspecting masks used during the patterning process. Opal develops and manufactures high-speed metrology systems used by semiconductor manufacturers to verify critical dimensions during the production of integrated circuits.
In 2000, Etec Systems, Inc. was purchased.
On June 27, 2001, Applied acquired Israeli company Oramir Semiconductor Equipment Ltd., a supplier of laser cleaning technologies for semiconductor wafers, in a purchase business combination for $21 million in cash.
In January 2008, Applied Materials purchased an Italian company Baccini, a designer of tools used in manufacturing solar cells.
In 2009, Applied Materials opened its Solar Technology Center—the world's largest commercial solar energy research and development facility in Xi'an, China.
Applied Materials' acquisition of Semitool Inc. was completed in December 2009.
Applied Materials announced its acquisition of Varian Semiconductor in May 2011.
Applied Materials announced its merger with Tokyo Electron on September 24, 2013. If approved by government regulators, the combined company, to be called Eteris, would be the world's largest supplier of semiconductor processing equipment, with a total market value of more than $30 billion.
But on April 27, 2015, Applied Materials announced that its merger with Tokyo Electron has been scrapped due to antitrust concerns and fears of dominating the semiconductor equipment industry.
Applied Materials is named among FORTUNE World's Most Admired Companies in 2018.
In 2019, Applied Materials bought semiconductor equipment manufacturer Kokusai Electric Corporation from private equity firm KKR, for $2.2 billion.

Finances

For the fiscal year 2018, Applied Materials reported earnings of US$3.313 billion, with an annual revenue of US$17.253 billion, a 33.3% increase over the previous fiscal cycle. Applied Materials market capitalization was valued at over US$36.6 billion in November 2018.
YearRevenue
in mil. US$		Net income
in mil. US$
20056,9921,210
20069,1671,517
20079,7351,710
20088,129961
20095,014−305
20109,549938
201110,5171,926
20128,719109
20137,509256
20149,0721,072
20159,6591,377
201610,8251,721
201714,5373,434
201817,2533,313

Organization

Applied is organized into three major business sectors: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. Applied Materials also operates a venture investing arm called Applied Ventures.

Semiconductor Systems

The company develops and manufactures equipment used in the wafer fabrication steps of creating a semiconductor device, including atomic layer deposition, chemical vapor deposition, physical vapor deposition, rapid thermal processing, chemical mechanical polishing, etch, ion implantation and wafer inspection. The company acquired Semitool for this group in late 2009. In 2019, Applied Materials agreed to buy semiconductor manufacturer Kokusai for $2.2 Billion.

Applied Global Services

The Applied Global Services group offers equipment installation support and warranty extended support, as well as maintenance support. AGS also offers new and refurbished equipment, as well as upgrades and enhancements for installed base equipment. This sector also includes automation software for manufacturing environments.

Display and Adjacent Markets

AGS combined an existing business unit with the display business of Applied Films Corporation, acquired in mid-2006.
The manufacturing process for TFT LCDs, commonly employed in computer monitors and televisions, is similar to that employed for integrated circuits. In cleanroom environments both TFT-LCD and integrated circuit production use photolithography, chemical and physical vapor deposition, and testing.

Energy and Environmental Solutions (former sector)

In 2006, the company acquired Applied Films, a glass coating and web coating business. Also in 2006, Applied announced it was entering the solar manufacturing equipment business. The solar, glass and web businesses were organized into the company's Energy and Environmental Solutions sector.
In 2007, Applied announced the Applied SunFab thin film photovoltaic module production line, with single or tandem junction capability. SunFab applies silicon thin film layers to glass substrate that then produce electricity when exposed to sunlight. In 2009, the company's SunFab line was certified by the International Electrotechnical Commission. In 2010, Applied announced that it was abandoning the thin film market and closing down their SunFab division. Also in 2007, the company acquired privately held, Switzerland-based HCT Shaping Systems SA, a specialist in wafer sawing tools for both solar and semiconductor wafer manufacture, paying approximately $475 million.
In 2008, Applied acquired privately held, Italy-based Baccini SpA for $330M, company that worked in the metallization steps of solar cell manufacturing. The company was listed at the top of VLSI Research's list of supplier of photovoltaic manufacturing equipment for 2008, with sales of $797M.
Since July 2016 this sector is no longer reported separately. Remaining solar business activities have been included in "Corporate and Others".

Facilities

Applied operates in many locations globally, including in Europe, Japan, North America, Israel, China, Italy, India, Korea, Southeast Asia and Taiwan. Applied moved into its Bowers Avenue headquarters in Santa Clara, CA, in 1974.

Management