Applied Materials is a US company founded in 1967 by Michael A. McNeilly and headquartered in Santa Clara, California. The company supplies equipment, services and software for the manufacture of semiconductor chips, flat-panel displays and other materials-engineering solutions. According to Wikipedia, Applied Materials is, by revenue, the second-largest supplier of semiconductor manufacturing equipment worldwide, behind the Dutch company ASML. The chief executive is Gary Dickerson; the chairman is Thomas J. Iannotti.
Importance for AI
Without Applied Materials' process equipment, modern chips could not be made: it is used to deposit, etch and modify materials on the wafer, layer by layer. Commenting on fiscal 2025 results, CEO Gary Dickerson said AI-driven demand was fueling substantial investment in advanced semiconductors and wafer fab equipment, and that Applied Materials had delivered its sixth consecutive year of growth. This anchors the company deep in the supply chain that makes modern AI accelerators possible.
Business segments
Applied Materials reports in three segments. Semiconductor Systems, its equipment-sales business, contributed about $20.8 billion in fiscal 2025, roughly 73% of total revenue of $28.37 billion. Applied Global Services (AGS), which bundles service, spare parts and automation software for the installed equipment base, generated a record $6.39 billion, about 22% of revenue. The smaller Display and Adjacent Markets segment, covering equipment for flat-panel display manufacturing, grew by roughly 20% over the same period.
Products and technology
One concrete example of its technology is the Centura Sculpta patterning system, introduced in 2023: it replaces part of the EUV double-patterning process by reshaping a single EUV pattern instead of splitting it across two masks. According to Applied Materials, this lowers design complexity and the risk of alignment errors; the company quantified potential savings in capital cost, manufacturing cost per wafer, and energy and water use. Beyond this, Applied Materials' equipment covers the classic process steps of deposition, etch, ion implantation and metrology.
Competition
In the semiconductor-equipment market, Applied Materials' main competitors are ASML, Lam Research, Tokyo Electron and KLA Corporation. A planned 2013 merger with Tokyo Electron was abandoned in 2015 over antitrust concerns. Unlike market leader ASML, which specializes in lithography systems, Applied Materials covers a broader range of process steps.
Key figures
For fiscal year 2025, which ended on October 26, 2025, Applied Materials reported record revenue of $28.37 billion, net income of about $7.0 billion, and R&D spending of $3.57 billion; non-GAAP free cash flow was $5.70 billion. The company employs about 36,500 people. In mid-July 2026, market capitalization stood at roughly $463 billion on a share price of about $584. The shares trade on Nasdaq under the ticker AMAT.
Service as a stabilizing factor
Besides selling equipment, Applied Materials earns recurring, comparatively more stable revenue from service, spare parts and software over the long service life of its installed base. New-equipment sales are closely tied to chipmakers' investment cycles and are therefore prone to fluctuation; the service business partly offsets this. Over the long term, the company benefits from the fact that powerful AI chips require advanced manufacturing steps, while the industry remains shaped by technological change, competition and geopolitical conditions such as US export rules toward China.
This profile is a neutral description and is not investment advice.