アプライド・マテリアルズ（AMAT）2026年度第3四半期決算説明会：売上高は91億ドルに達する

要点

• アプライド・マテリアルズの2026年会計年度第3四半期の売上高は、先端ファウンドリ/ロジック、DRAM、アドバンスト・パッケージングにおけるAI関連需要に牽引され、過去最高の91億ドルとなり、前四半期比で15%増、前年同期比で25%増を記録しました。
• Non-GAAP EPSは過去最高の3.50ドルに達し（前年同期比41%増）、Non-GAAP営業利益率は330ベーシスポイント拡大して過去最高の34.0%となりました。
• セミコンダクター・システムズ部門の売上高は前年同期比27%増の過去最高となる70億ドルに達しました。HBMパッケージングを含むDRAM売上高は52%増となり、過去最高水準を記録しました。
• 経営陣は2026年（暦年）の成長見通しを再び上方修正しました。セミコンダクター・システムズ部門の成長率は、従来掲げていた30%以上という水準を上回ると見込んでおり、アプライド・マテリアルズ全体としても市場全体の成長ペースを上回ると予想しています。
• 第4四半期の売上高は102億5,000万ドル（±5億ドル）（前年同期比51%増）、Non-GAAP EPSは4.02ドル（±0.20ドル）（同85%増）と予想されています。
• 顧客からはローリング方式による詳細な8四半期予測が提示されており、戦略的な協議の一部は2030年にまで及んでいます。経営陣は2027年も引き続き強力な成長の年になると見込んでいるものの、クリーンルームの確保状況が装置出荷の主な制約要因になると指摘しました。

主要財務データ

アプライド・マテリアルズは当四半期、8億6,000万ドルを株主に還元しました。これには配当金4億2,000万ドルと自社株買い4億4,000万ドルが含まれます。自社株買いの承認残高は128億ドルとなっており、引き続きフリー・キャッシュフローの80%〜100%に相当する還元を目標としています。

事業および業績動向

AI需要がセミコンダクター・システムズの成長を牽引

GAA（Gated-All-Around）およびFinFET技術に向けた能力増強が、ファウンドリ/ロジック部門の過去最高の売上高を支えました。DRAM売上高は52%増加し、顧客のクリーンルーム拡張に伴い、経営陣は2026年後半に一段の大幅増を見込んでいます。

アプライド・マテリアルズは、PVD、CVD、エピタキシーを含む成膜技術、材料改質、エッチングおよびCMP、プロセス診断・制御の各分野で四半期売上高の過去最高を記録しました。経営陣は、先端ファウンドリ/ロジック、DRAM、アドバンスト・パッケージングが、2026年および2027年の前工程（ウエハファブ）装置市場の成長の約80%を占めると見込んでいます。

アドバンスト・パッケージングの売上高は、2026年に70%以上成長すると予想されています。同社はHBM、3Dチップレット積層、パネルレベル・パッケージング、ハイブリッド・ボンディングでの強みを強調しました。また、経営陣はプロセス診断・制御の売上高も2026年に50%以上増加すると見込んでいます。

サービス事業の成長が加速

アプライド・グローバル・サービス（AGS）は、サブスクリプションの伸びと堅調なパーツ取引需要を反映し、過去最高となる18億ドルの売上高を計上しました。モニタリング、診断、予測分析を行う同社独自のAI搭載ソフトウェア機能には、3万7,000台以上のプロセスチャンバーが接続されています。

経営陣はAGSの売上高が2026年に20%以上拡大すると予想しており、10%台半ばの持続可能な長期年間成長目標を維持しています。ファブの立ち上げを支援するため、当四半期中に1,000人以上のカスタマーサポートエンジニアが増員されました。

生産能力投資と地域別需要

アプライド・マテリアルズは第3四半期、グローバルな製造およびAGSカスタマーサポート部門で1,500人以上の従業員を増員しました。シンガポールの新拠点をはじめとする製造拠点の拡張を経て、同社は2028年までに四半期あたりのシステム生産能力を現在から倍増させる準備を進めています。経営陣は、これが生産能力の目標であり、2028年の売上高予測ではないことを強調しました。

中国市場は、セミコンダクター・システムズとAGSを合わせた売上高の26%を占めました。経営陣は現在、28ナノメートルファウンドリ/ロジック投資に牽引され、2026年に中国での売上高が増加すると予想しています。また、パワー半導体やフォトニクスなどの分野の好調や稼働率の改善に伴い、ICAPS売上高も2026年と2027年の両年で成長すると見込んでいます。

業績予想（ガイダンス）

経営陣は、主にディスプレイ事業を反映した「その他売上高」が、2027年まで平均で四半期あたり約4億ドルになると見込んでいます。また、グローバル最低課税の影響を吸収するため、2027年のNon-GAAP税率は約13%になると予想しています。

2027年会計年度第1四半期は14週間となります。経営陣によると、追加の1週間はサービス売上高に対して概ね比例して寄与するものの、装置計画は引き続き主に四半期単位で行われるとのことです。営業費用は前四半期比で通常よりも大きめの増加が見込まれています。

リスクと注視点

• クリーンルームの制約：経営陣は、顧客側で利用可能なクリーンルームスペースの確保状況が、2027年の装置出荷成長を決定づける主要要因であると指摘しました。
• 立ち上げコスト：製造およびカスタマーサポート要員の採用が短期的には売上総利益率の押し下げ要因となっています。経営陣は、売上規模の拡大に伴い利益率は段階的に改善すると見込んでいます。
• 事業構成（ビジネスミックス）：利益率の低いディスプレイ事業の前四半期比での成長が、第4四半期の全社売上総利益率のガイダンスが50.4%とほぼ横ばいに留まる一因となっています。
• 生産能力の拡張実行：アプライド・マテリアルズは製造能力を拡大するとともに、サプライヤーと長期的な要求事項の調整を進めており、サプライチェーンの実行力の重要性が高まっています。
• NAND需要：経営陣は、2027年のNAND装置投資の成長が、先端ロジック、DRAM、アドバンスト・パッケージングよりも緩やかになると予想しています。主要顧客の取り組みは、追加のウエハ投入よりも、主に層数のアップグレードに重点が置かれたままとなっています。

アナリスト質疑応答の主なポイント

• 成長見通し：経営陣は、セミコンダクター・システムズ部門の成長率が、従来の2026年（暦年）見通しである30%超を上回る見込みであると語りました。第1四半期のガイダンス提示は控えましたが、同四半期も前四半期比で成長し、2027年も再び強力な年になると見込んでいます。
• 売上総利益率：価値に基づく価格設定（バリューベース・プライシング）が、3年間で全社の売上総利益率を約300ベーシスポイント押し上げる要因となりました。立ち上げコストや事業構成の影響で短期的には緩やかなペースにとどまるものの、経営陣は更なる改善を期待しています。
• 需要の見通し（可視性）：大口顧客からは、詳細な8四半期の予測とリードタイムの長い注文書が提供されています。アプライド・マテリアルズは最大の顧客層との間で約5年間のロードマップの可視性を得ており、技術的な協業関係はそれを超える期間に及ぶこともあります。
• DRAMにおけるポジション：経営陣は、CMOS周辺ロジック、エピタキシー、HBMパッケージング、成膜、導電膜エッチング、eビーム技術に支えられ、DRAMの力強い成長が2027年にかけて続くと予想しています。
• アドバンスト・パッケージング：経営陣は、2027年にパネルレベル・パッケージングの売上高が大幅に増加し、その後も更なる拡大が続くと見込んでいます。ハイブリッド・ボンディングも長期的に重要な成長ドライバーになると期待されています。
• サービス事業の収益性：AI機能を搭載したサービス製品、納入実績（インスツールベース）の拡大、ファブ稼働率の向上により、AGSの利益率が下支えされています。経営陣はサービスの売上総利益率が時間の経過とともに改善すると見込んでいますが、具体的な長期的目標の提示は避けました。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Welcome to the Applied Materials Third Quarter of Fiscal 2026 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Mike Sullivan, Corporate Vice President of Investor Relations. Please go ahead.

Michael Sullivan

Good afternoon, everyone, and thank you for joining today's call. With me are Gary Dickerson, our President and CEO; and Brice Hill, our Chief Financial Officer.

Before we begin, I'd like to remind you that today's call includes forward-looking statements, which are subject to risks and uncertainties that could cause our actual results to differ. Information concerning these risks and uncertainties is discussed in our most recent Form 10-Q and other filings with the SEC.

Today's call also includes non-GAAP financial measures. Reconciliations to GAAP measures can be found in today's earnings press release and in our quarterly earnings materials, which are available on our website at ir.appliedmaterials.com.

In addition, any comments regarding calendar 2026 refer to Q2 of this fiscal year through Q1 of fiscal 2027, which will be a 14-week quarter.

Next, I'd like to remind you about our 2 special events during SemiConwest. On Monday afternoon, October 12, we will host an unveiling of the new EPIC Center in Silicon Valley, California. And on Tuesday morning, October 13, we hope you'll join Gary, Brice and our business unit leaders for our investor breakfast presentation at the Yerba Buena Center in San Francisco. You can join us in person or on a live webcast.

And with that introduction, I'd now like to turn the call over to Gary Dickerson.

Gary Dickerson

Thank you, Mike. In our third fiscal quarter of 2026, Applied Materials delivered another set of record-breaking results, including the highest quarter-on-quarter revenue growth in the company's history. The rapid global build-out of AI infrastructure combined with Applied's leadership positions in the most enabling and highest value technologies for AI computing provides the company with an exceptionally strong foundation for multiyear revenue and profit growth. As 2026 has progressed, customers have found new ways to address clean room space constraints and significantly increased their demand for tool deliveries. In the past three months, we have again made upward revisions to our revenue growth forecast for the year, and we are confident we will grow faster than the overall market.

As AI computing drives unprecedented demand for semiconductors, there is a large gap between demand and supply for advanced chips. To ensure our supply chain and field teams can support their ramp, our largest customers are giving us longer-term commitments and rolling 8-quarter forecasts. This increased demand visibility gives us high confidence that 2027 will be another strong growth year for Applied Materials. As customers move quickly to bring new fab capacity online, while simultaneously optimizing yield and output of their existing production facilities, we also see strong incremental demand for our advanced service solutions.

In my prepared remarks, I will share my views on how AI is resizing and reshaping the semiconductor industry and its ability to realize the value of advanced technology. I will describe the increasing value applied to delivering to our customers by accelerating their technology road maps, optimizing existing production capacity and helping ramp new fabs faster. And I'll provide a brief update on our EPIC strategy as we prepare to start operations in our new EPIC Center in Silicon Valley.

As I have said before, I strongly believe that AI is the biggest and most consequential technology inflection of our lifetimes. While we are still in the early innings of deployment, AI is reshaping the global economy and becoming fundamental to the relative competitiveness of companies. What I am seeing at Applied Materials is a great case study in AI's real-world impact. Our investments in AI are on track to deliver compelling returns by accelerating our revenue growth and operating profit margins. In R&D and services, we are using AI to create highly differentiated products, significantly speed up product development time lines and create valuable new service solutions for customers. In operations, supply chain and our corporate functions, AI is helping us ramp faster, drive meaningful improvements in productivity and scale our revenue significantly faster than our head count.

Beyond Applied, we see similar trends playing out across a wide variety of industries. As the performance and cost of AI computing improves, many new applications will become technically viable and economically attractive. These expansive opportunities for value creation are fueling an intense global competition for AI leadership, which can be described as two concurrent races. The first race is for technology leadership. AI data center returns are determined by the number of tokens generated per second and the total cost of ownership, which is dominated by energy consumption. Improvements in token per second per watt are primarily driven by innovations in semiconductor devices and systems. This can be seen in the value of the semiconductor and semiconductor equipment industries are generating from their most advanced technologies.

The second raise is for capacity as demand for advanced semiconductors to support AI infrastructure scaling far exceeds supply. As a result, chipmakers are intensely focused on increasing output and yields of their existing factories while rapidly building new ones. For Applied, the technology race and the capacity race are fueling new opportunities to create and capture value. In the race for technology leadership, leading edge foundry logic, DRAM and advanced packaging have the greatest impact on AI computing performance, power efficiency and cost. Together, we expect these areas to represent around 80% of wafer fab equipment growth in 2026 and 2027. These three areas are also where Applied has strong leadership positions, where we identified key AI inflections early, and where we've shifted our investments to build an innovative pipeline of next-generation solutions.

In the past quarter alone, we have announced six new products, including our Centura Prime Epitaxy system, designed specifically for high-performance DRAM, producer Avila that enables higher performance and higher layer count high-bandwidth memory, Nokota VMAX, our next-generation plating system and Opta Quad CMP for advanced packaging and two new e-beam systems also for advanced packaging that expand on our e-beam leadership in the front end.

Advanced packaging is one of the most important areas for AI compute innovation, and we see very strong multiyear growth for Applied. Applied as the overall leader in this market with strong positions in high bandwidth memory and 3D chiplet stacking, and we now expect our overall packaging revenues to grow more than 70% in calendar 2026. We are also well positioned for future packaging inflections as the industry moves to new architectures and larger-sized panel formats. We have built a broad portfolio of next-generation technologies for panel, including digital lithography, deposition, etch and e-beam review.

In the global race to add semiconductor manufacturing capacity, our customers' ability to increase yield and output in their existing production fabs is incredibly valuable. This creates expanded opportunities for Applied to deliver new innovations in three key areas: Services, process diagnostics and control, and new products that increase wafer output per area of fab space. Our advanced service solutions enable customers to better optimize performance of their high-volume manufacturing operations. We already have more than 37,000 chambers in the field connected to our proprietary AIX software capabilities and use AI-powered monitoring, diagnostics and predictive analytics. Our advanced services are delivering yield improvements for customers and helping us drive higher growth rates in applied global services. We now expect AGS to grow more than 20% in calendar 2026 and to deliver a sustainable long-term annual growth rate in the mid-teens.

Our metrology and inspection product portfolio is also enabling customers to accelerate fab yields and output improvements. The most advanced logic and DRAM devices require more e-beam steps that can provide sub-nanometer resolution for high aspect ratio structures. Applied has unique e-beam technology and is the leader in this growing market. In parallel, we are introducing new optical inspection products, which enable us to increase application share in these markets as well. As a result, we expect to grow our process diagnostics and control business more than 50% in calendar 2026, and we have a strong pipeline of new products that will fuel growth in 2027 and beyond.

Finally, we are developing a new portfolio of output innovation products that increase the wafers that can be processed per square foot of clean room space. One example is our new Epitaxy system for DRAM that not only increases device performance, but also uses 20% less clean room space than our earlier products. We have multiple output innovation products in qualification at customer sites that will provide significant increases in output per unit area. With incredibly strong customer pull for next-generation technology and unprecedented demand for semiconductor manufacturing capacity, the value of time to market has never been greater.

Our EPIC strategy is designed to increase innovation and commercialization velocity by creating earlier and deeper engagements with our customers and partners and co-locating key innovators. For chip makers, EPIC provides much earlier access to Applied's new product innovations that are at the foundation of future AI compute architectures. The output from Epic will be more mature technology that can deliver high yields faster in volume manufacturing. For Applied, EPIC co-innovation programs will enable us to be designed in to new chip and packaging architecture inflections, increased R&D productivity and value sharing and provide better multi-node visibility to guide our investments and resource allocation.

Since our last earnings call, we announced that Broadcom will join EPIC as an innovation partner to accelerate the development of advanced chip packaging technologies for next-generation AI systems. We also signed EPIC partnership agreements with screen and UC Berkeley. This brings our total number of announced EPIC engagements to 11, spanning system companies, leading chip makers top research universities and innovation partners. The center pet of our EPIC platform is our brand-new EPIC Center in Silicon Valley. We will move the first R&D tool into the clean room next week and we are on track to start operations in the coming months.

Before I hand over to Bryce, let me briefly summarize. Demand for advanced semiconductors and semiconductor equipment continues to strengthen, and as customers find new ways to address clean room space constraints, we see higher demand for 2026 tool deliveries. With support from our supply chain, we have again increased our expectations for 2026 revenue, and we are confident we will grow faster than the overall market this calendar year.

In the race for AI technology leadership, leading-edge family logic, DRAM and advanced packaging have the greatest impact on AI computing performance, power efficiency and cost. These are areas where Applied has strong leadership positions and an innovative pipeline of next-generation solutions, supporting strong revenue and margin growth in 2027 and beyond. And we're working closely with our customers to optimize yield, outputs and fab ramp times with valuable new innovations in services, process diagnostics and control and output innovation products.

Brice, over to you.

Brice Hill

Thanks, Gary. I'm pleased to share that Applied delivered another quarter of double-digit sequential and year-over-year growth in revenue, operating profit and non-GAAP earnings per share. Fiscal Q3 also marks our 13th consecutive quarter of year-over-year gross margin expansion, which demonstrates how we are benefiting from the tremendous value our products and services bring to our customers and the entire AI ecosystem.

Our fiscal Q4 guidance demonstrates continued strong year-over-year momentum. And in the second half of the calendar year, we expect particularly strong growth in DRAM as well as leading-edge foundry logic and the advanced packaging for both. On today's call, I'll update you on the [indiscernible] environment, discuss how we're scaling our operations for continued growth, demonstrate how value creation is expanding our gross margins, summarize our Q3 results and provide our Q4 guidance. Over the past quarter, the demand outlook has strengthened across all the leading indicators we track. Cloud service providers continue to increase their investments in AI infrastructure. Importantly, many of these companies are already generating positive returns on their investments. And so are their enterprise customers, including Applied.

As Gary described, we are accelerating the pace of new product development, increasing revenue and generating new efficiencies in our support functions. In fact, G&A as a percentage of operating expenses has declined to the lowest level in our history.

Turning to our direct customers. Most leading-edge logic and DRAM fabs are running at full capacity. Utilization levels are rising across the board, including an ICAP where we see strong demand in AI-related markets like power and optical chips. As a result, our customers have announced more than 10 new fab projects just this quarter. Customers continue to give us longer visibility than we've ever had with some conversations now extending to 2030. These communications are valuable to our company and our own supply chain partners who are scaling with us to support our customers' growth forecast. During the quarter, we officially opened our newest manufacturing center in Singapore and combined with other expansions worldwide have nearly doubled our manufacturing space over the past several years. Based on the longer-term demand signals from our customers, we are now taking this further hiring and training new manufacturing and customer support teams so that we have the capacity to double our quarterly system output from current levels by 2028.

In fact, we add more than 1,500 people this quarter in worldwide manufacturing and AGS customer support. We are also planning our next manufacturing capacity expansion, ensuring we have the option to support further increases in demand by 2030.

Next, I'll discuss value creation and sharing. Applied is delivering value to our customers in the AI ecosystem in more ways than ever before. We've increased R&D every year since Gary joined the company in 2012. And the investments have broadened from equipment innovations to materials engineering solutions that result in better chips. More recently, we've significantly increased R&D and advanced packaging innovations that enable better systems supplementing our R&D with two small acquisitions. And today, we're increasing investments in technologies that enable better fab economics as we accelerate ramps and boost output and yields. All of these technologies will be put to work at the EPIC center, where we will co-innovate with our customers and partners to accelerate the AI road map.

In short, we've broadened our focus from making better equipment to enabling better chips and systems for AI and better fab returns for our customers. These investments have made us a more valuable partner to our customers and enabled us to share in the value we create. Three years ago, we implemented a systematic approach to value-based pricing. And today, you can see the benefits reflected in our strong revenue growth and gross margins which have increased to over 50% for the company and over 55% in semiconductor systems. We have higher pricing and margins in both new and existing products. At the same time, we remain focused on cost improvements and use them aggressively to help offset higher input costs. As we look at the many opportunities we have to further increase the value of chips, systems and fabs, we are confident we will continue to expand gross margins.

Next, I'll summarize our Q3 results. We generated record revenue of $9.1 billion, up 15% sequentially and 25% year-over-year. Non-GAAP gross margin increased to 50.4%, up 40 basis points sequentially and 150 basis points year-over-year. Non-GAAP operating margin expanded to a record 34%, up 190 basis points sequentially and 330 basis points year-over-year. And we delivered record non-GAAP earnings per share of $3.50, which is up 22% sequentially and 41% year-over-year. Last quarter, I discussed our focus on increasing operating leverage. We grew revenue much faster than spending in Q3 on both a sequential and a year-over-year basis and drove OpEx as a percentage of revenue to the lowest level in nearly 4 years.

Turning to the segments. Semiconductor Systems delivered record revenue of $7 billion, which is up 18% sequentially and 27% year-over-year. The revenue mix was similar to last quarter as capacity additions and gate all around and FinFET, drove record foundry/logic revenue. DRAM revenue, which includes HBM packaging, grew by 52% year-over-year to record levels. As we look ahead to the second half of the calendar year, we expect a very significant increase in DRAM revenues as our customers begin to expand clean room capacity. Looking to our individual materials engineering business units, we had record revenues and deposition in Q3, including in PVD, CVD and epitaxy, which is one of our fastest-growing businesses this year. In materials modification, we had record sales in thermals and treatments. In materials removal, we had record revenue in both etch and CMP. We also had records in process diagnostics and control, which is growing faster than our overall systems business this year. Segment non-GAAP gross margin increased 190 basis points year-over-year to 55.4%. Non-GAAP operating profit increased 45% year-over-year to a record $2.7 billion.

Applied Global Services delivered record revenue of $1.8 billion, which was up 22% year-over-year reflecting both subscription services growth and high transactional parts demand. Ramp readiness is a major priority, and the team added more than 1,000 customer support engineers. AGS is using AI and warehouse automation to grow as efficiently as possible, which is reflected in strong gross margin of 35.6%, up 180 basis points year-over-year and operating margin of 30.1%, up 280 basis points year-over-year.

From a regional perspective, China represented 26% of our semiconductor systems plus AGS revenue. We now expect our China revenue to increase this calendar year, led by investments in 28-nanometer foundry logic, where Applied has strong technology differentiation and share. Other revenue of $294 million was in line with our expectations. We generated record operating cash flow of over $3 billion. Capital expenditures were $707 million, resulting in free cash flow of $2.3 billion. We distributed $860 million to shareholders, including $420 million in dividends and $440 million in stock repurchases. We have $12.8 billion remaining in our share buyback authorization and continue to expect to distribute 80% to 100% of free cash flow to shareholders.

Now I'll share our guidance for Q4. We expect company revenue of $10.25 billion, plus or minus $500 million, which is up 51% year-over-year. We expect non-GAAP EPS of $4.02 plus or minus $0.20, which is up 85% year-over-year. Within this outlook, we expect Semiconductor Systems revenue of around $7.9 billion, up 62% year-over-year, AGS revenue of about $1.84 billion, up 22% year-over-year and other revenue of around $510 million, composed primarily of display revenue. I've said previously that our display business includes new products that could help us drive higher quarterly revenue in future periods. For modeling purposes, we now expect other revenue to be approximately $400 million per quarter on average through 2027.

We expect non-GAAP gross margin to be approximately 50.4% in Q4, up 230 basis points year-over-year. And we expect non-GAAP operating expenses of around $1.58 billion. As a reminder, Q1 of fiscal 2027 will be a 14-week quarter which will result in a higher than average step-up in our Q1 operating expenses. Finally, we are modeling a non-GAAP tax rate of around 11% and and a tax rate of around 13% in 2027 as we absorb the effect of the global minimum tax.

In summary, the rapid adoption of AI that we've been investing for is driving strong growth and record revenue and profitability for Applied Materials. We are enabling better chips, systems and fab returns and systematically sharing in the value we create. We see continued record performance in the second half of the calendar year with a sizable increase in DRAM and leading-edge foundry logic revenue. Based on the unprecedented visibility we're receiving from our customers, we expect another strong record year in 2027 and are making substantial investments to be able to ramp to higher levels beyond next year.

Now Mike, let's begin the Q&A session.

Michael Sullivan

Thanks, Brice. [Operator Instructions] Operator, let's please begin.

Operator

[Operator Instructions] And our first question for today comes from the line of C.J. Muse from Cantor Fitzgerald.

質疑応答

Christopher Muse

Quarter ago, you quantified semi-systems growth of 30-plus percent. Curious if there's kind of a framework for thinking about what the growth outlook looks like now, given your positive commentary. And is there any sort of framework that we should be thinking about into calendar '27?

Brice Hill

Hi, C.J., it's Brice. Thanks for the question. So our key comments there and the way that we're seeing the business is that demand strengthened again during the quarter. We see new projects being added by our customers on factory side. We see CapEx forecast going up by our customers, and we see strong CapEx from the cloud service providers all and out. So the mid -- the greater than 30% that we highlighted last quarter, we're saying now that it's greater than that at this point. We don't want to guide our out Q1 at this point. So that's as much information that we're providing. But when we look into 2027, we expect this whole demand function led by AI to continue. So we're saying '27 at this point, we expect another strong year.

Gary Dickerson

Yes, C.J., this is Gary. I would add just that the fastest-growing parts of the market are the leading-edge foundry logic, DRAM and advanced packaging. We said that's around 80% of the growth in wafer fab equipment spending this year, and then we'll see a similar profile in '27. Those are the fastest-growing parts of the market. Those are areas where we have clear leadership and really well positioned going forward. So as you said, we increased greater than 20% is what we said year-over-year in February, then greater than 30% in May. And now we think stronger than that, going forward. And so demand in all the conversations with the customers is very strong. And what we're hearing from customers with these 8-quarter rolling forecast is very strong multiyear demand. I really want to thank our supply chain teams and operations teams. They're doing a great job in responding. But again, customers are being very creative in how they're able to expand space and take tools earlier. Our teams are reacting very quickly, and we're in a strong position to outperform this year.

Brice Hill

So strong environment, C.J., and we also highlighted that we expect to gain share during the year.

Christopher Muse

Very helpful. And I guess as a follow-up on gross margin, you talked about value-based pricing. And I think we've heard from most companies around anything expedited service new tools. But you talked about like-for-like pricing pushing higher. So could you speak maybe directly to that, and how we should be thinking about the implications to your overall gross margins as we proceed into fiscal '27 and beyond?

Brice Hill

Sure. So over the last three years, approximately 300 basis points increase in our company level gross margins. One driver for that was our value-based pricing that we do for every single tool. So the issue C.J. was when we came through COVID, supply chain crisis, cost of inputs went up, we found ourselves needing to reprice every tool. So we put that value-based process in place. And that's what we do is examine the value of every single tool and put a new price on every single tool. And we think that's required in an environment where the input cost change constantly. And then looking forward, we expect to be able to continue to improve our gross margins. We're already over 55% for our -- at the semi systems level and value-based pricing will continue to be a part of that.

Gary Dickerson

Yes. C.J., I would add that I think our ability to create value for customers has never been stronger. This race to bring new AI architectures to market is what every one of our single customers is focused on. Applied has the most enabling technologies, as I said, in the fastest-growing parts of the market. So we have a tremendous opportunity for creating value there. And I also talked about yield and output innovation. So all of our customers, they are racing to be first to market with these new architectures and then also ramping as fast as possible optimizing yield and output. So that puts us in a position where our products are extremely valuable. Our services are also more valuable. That's driving the greater than 20% service growth that we're seeing. We talked also about greater than 50% growth in our PDC business that also is related to yield optimization. And then our pipeline of new products is also very strong, and all of those have higher margins, and that will give us a tailwind going forward.

Operator

And our next question comes from the line of Vivek Aria from Bank of America Securities.

Vivek Arya

So Gary, many of your memory customers are saying that they have 3- to 5-year long-term agreements with good visibility into units and pricing? I know you mentioned you have 8 quarters of visibility. But as you look at your customers who are signing up for a greater level of alignment with their end customers. How is that kind of translating into your longer-term visibility beyond these 8 quarters?

Brice Hill

Yes. I can start on that, [indiscernible], it's Bryce. So what we have from customers, of course, the large customers, we actually have visibility to the road map. So we have a perspective on probably 5 years of visibility for our largest customers. we asked them for the detail at a detailed level for the 8 quarters that we've been speaking about, so we can aggregate that and get it to our supply chain. And other things that have changed, we get longer lead time POs from our customers so that the details are agreed from a longer lead time perspective. And then we also have some charges that have moved into this environment like cancellation charges and expedite charges that help will -- that help navigate the environment. So there's been a number of changes, and I think visibility is significantly increased from prior periods.

Gary Dickerson

Yes, Vivek, this is Gary. Certainly, everybody can see that there is a gap between supply and demand, DRAM, especially with AI as we're expanding from training to inference to a genetic AI to physical memory demand continues to go higher, and I'd say especially DRAM. DRAM this is going to be a very strong growth year for Applied, more second half weighted in terms of our DRAM growth, but very strong growth in DRAM. And I think, as you know, we've expanded our DRAM share significantly over the last several years, and we continue to 'see strong growth in our DRAM business going into 27. And as you said, as we're in all of these conversations with customers, they're talking about multiyear growth and significant demand that we're increasing our capacity to meet -- and then for us, relative to our position in DRAM, we are the #1 process equipment provider in DRAM. We're the leader in the CMOS periphery logic to upgrade transistors for higher performance and power including, I talked earlier on the call about very strong epi growth, HBM packaging. We're the leader in materials deposition for wiring and patterning, conductor etch e-beam technologies, and we're in deep partnerships with customers also for future DRAM architectures, innovations in 6 F squared, 4 S squared, and we're very well positioned for 3D DRAM in the future. So I have high confidence that we're going to continue to drive significant growth and gain share in this segment.

Vivek Arya

Got it. Form a -- follow up, one more on gross margins. If I go back from calendar '21 to '25, your gross margins and those of your U.S. peer were about the same. In fact, Applied was slightly ahead. But in the near term, they are about 150 basis points higher. So I understand mix for every company is different. But I'm curious how come the gross margins were so aligned in those 5 years, yet they are kind of lagging a little bit. So just what's the prospect rise for expanding gross margins to more of this industry level going forward?

Brice Hill

Yes, Vivek, I don't know if I have a great reason to think about comparisons. But from our perspective, we've made tremendous progress from a gross margin advancement. We talked about our value pricing and really it's the portfolio. The portfolio continues to strengthen as we target the R&D and the collaborations with our customers at the most valuable inflection solutions that need to be developed. And so the pricing really is just demonstrating the value of that portfolio. And yes, we expect to be able to continue that. Of course, we have some other elements in our portfolio like the display business that we've talked about when that grows faster, that has a different effect on the corporate gross margin. So the portfolios are different between the two companies, but we expect to be able to continue to improve our gross margin and grow the value over time.

Gary Dickerson

Yes. again, I would also add, we have been driving margin growth, pretty significant margin growth. We talked about 13 consecutive quarters of year-over-year growth. 90 basis points in our semi business in the last year. And I have high confidence we're going to continue to drive margins higher, continuing the growth that we've seen over the last few years.

Operator

And our next question comes from the Stacy Rasgon from Bernstein Research.

Stacy Rasgon

I have one more on gross margins as well. And look, I feel a little bad harping on it because they're actually really good. They're well over 50%, and they are coming in higher than you had expected. But I'm just wondering, you are guiding them flat at these current levels, at least in the near term on a pretty sizable revenue increase in just given all the commentary around portfolio and pricing and everything, I was just a little surprised. Why is it? Is that just a function of the display business growing sequentially just mix between the businesses? Or is there something else going on in the near term?

Brice Hill

Hi, Stacy, Brice. Yes, thanks for pointing out the growth in display is certainly a factor in the recipe. But really, it's just a ramp headwinds as with the growth, we're ramping a lot of customer service engineers. We have a lot of resources that we're adding in the semi business. And so yes, we get the benefit of strong segment mix with semi growing so strongly and we get the benefit of more volume. But we do have some ramp costs that are in the forecast. So we feel good about in our guided quarter, we feel good about having a flattish margin at the company level. And then like we said, as you look longer term, we'll expect to be able to continue to grow the margin.

Stacy Rasgon

Got it. So I guess to follow up on that then. So if there's ramp costs now, I guess how long do those last? Are you still ramping up more engineers and other costs like into subsequent quarters? Or are you all in this quarter? And then as we think about the pace of that expansion, like what does it look like? I think you talked about last quarter thinking about something like 10 bps or something sequentially kind of going forward. Is that still the trajectory or given some of the other drivers, do you think it can come in better than that?

Brice Hill

No, I think the continued pace of improvement, we called that slow in the past. I think slow improvement is the right way to think about it. We do expect to improve it over the longer horizon. So I think we will continue to add employees over the next few quarters, but I think that headwind will recede as the revenues continue to grow.

Operator

our next question comes from the line of Timothy Arcuri from UBS.

Timothy Arcuri

Brice, I want to go back to the systems guidance for the year. So you said up more than 30 last call, things have gotten better since then. But even if you go 40%, that implies a pretty big decel, into December. So you go from 18% in July to 12% in October to then 6% in January, and that gets you to like 40%. And Lam was talking about WFE being up like 38%. So if you're going to outgrow you have to be at least 40%, if you believe their numbers. So would you commit to be to growing systems 40% or more?

Brice Hill

Hi, Tim, thanks for the question. We are committing that we expect to outgrow. We think that's already happened so far this year, and we expect to have that happen. Wherever we land from a growth perspective as we get through the year. And I think you've got the dynamics right. We first guided greater than 20%. We raised that after customers added clean room projects. We raised it to greater than 30%, and we're saying it's even higher now. And so yes, we'll expect -- we're not giving that number because we're not guiding that out quarter, but those are the right dynamics. I guess in the last I guess the last thing I'll add there is we do expect sequential growth in our Q1, the calendar Q4, but not guiding that at this point.

Timothy Arcuri

Okay, Brice. And then maybe asked a different way. So the comment about manufacturing capacity doubling. So should I just take that kind of face value and so you're shipping roughly your revenue in roughly $7 billion in the July quarter. So at a value does that mean that sometime during calendar '28, you'd be revenue at $14 billion, or is it more newer than that?

Brice Hill

It is more nuanced. I think you should take it explicitly. It's capacity. So it's not a revenue forecast for 2028. What we have to do with long lead investments like clean room is make sure we have the clean room in place with a profitable business or any demand forecast demand reality in that environment. And so we're just communicating because partially we're communicating to our suppliers also we're putting the capacity in place to be able to support a wide range of output requirements in 2028. And as far as that goes the years after also. So no, it's not a revenue forecast, but yes, it's giving you an indication of what we will be prepared for.

Operator

And our next question comes from the line of Krish Sankar from TD Cowen.

Sreekrishnan Sankarnarayanan

I just want to follow up on Tim's question. Gary, or Brice, it seems like your customer conversation seems to have shifted from annual price discussions to basically delivering and meeting requirements basically time to market with a two-year visibility. I'm just wondering, does you give you some freedom on pricing? Or does it add more burden on expenses on prepping up your capacity underspend the supply chains at the upcoming ramp. And if a visibility of 2 years, why not give a Jan quarter [indiscernible] the outlook? And then I have a follow-up.

Brice Hill

Hi, Krish, yes. The customers definitely -- especially the large customers, we've got very strong visibility. And you're right, they are becoming more and more interested in scheduled delivery and hitting the schedules, which is why they're collaborating, cooperating on specificity of the orders and the 8-quarter visibility that we're also sharing with our suppliers. So I think that dynamic has improved the situation for us in the planning environment dramatically from the prior year. So I think all those things are true. I guess that's our perspective at this point.

Sreekrishnan Sankarnarayanan

Got you. Got you. And then maybe, Brice, think in your prepared comments, you kind of spoke about certain customers giving you visibility into 2030. I'm just curious, are those connotations about technology, or is that still about capacity to scale up and meet that demand?

Brice Hill

Well, yes, it's definitely about technology. So especially with the large customers for mature customers. We know the fab projects that are on the road map. We know the technology that's planned and even if it's a new technology, we have a perspective of our positions in those technology. So we do have the ability to plan in a detailed manner for 5 years. And then what happens at the 8 quarter out is we get very specific about the node and the tool types that need to be built so that we can pass that information along to the suppliers. And we do have...

Gary Dickerson

Yes, Krish, we are -- I mean many of those conversations with the CEOs of our largest customers. And for sure, they're giving us visibly detailed visibility for the 8 quarters, but even beyond that, I think they have communicated they see strong multiyear demand in their business. And so they're wanting us to be ready to support that demand. And as you know, it takes time for us to get the supply chain ready to support those levels. So we are getting the visibility relative to capacity needs beyond the 8 quarters. On the technology, I would say that those discussions go out maybe 10 years in the future because Applied is the most enabling for those key architecture inflections. We have the most broad, the most connected, the most unique portfolio to enable the new transistors, the wiring, the DRAM architectures, new packaging architectures and it takes time to bring those innovations to market. So Applied is unique in the portfolio we have. We have the most enabling technologies. If you looked at the top or technologies you need to enable these new architectures. Applied has, by far, the majority of those technologies. And so very deep co-innovation relationships with customers where we're cocreating those architectures. So that technology visibility goes beyond 5 years in these deep co-innovation relationships with the customers.

Operator

And our next question comes from the line of Harlan Sur from JPMorgan.

Harlan Sur

The team previously guided your global ICAP business to be flat to slightly this year. Outside of China, I mean, we are seeing a strong cyclical recovery in automotive, industrial, for your analog power microcontroller customers right? They are also articulating an environment of tight supply as well. Utilizations are rising meaningfully, Brice, as you articulated. But are these global customers also starting to pick up their spending? And do you see your total ICAP's business growing this year?

Brice Hill

Harlan, thanks for the question. So I'll start here. Yes, in pointing this out, we do see a change in the ICAP dynamic. So you called out the increasing utilization across those customers. That's a positive. Our view of China is that it will grow this year, and it will grow next year. That's a big part of our ICAP portfolio. And we do think that ICAPs overall will grow this year and will grow next year. So the digestion we're hopeful that the digestion that we've talked about on the equipment side in the past is expiring, and we can return to growth. And then specifically, for our non-China customers as we look into next year, we think there'll be positive growth for those customers. We see bright spots in power and photonics in other areas. So it's looking much more positive than it has the last couple of years.

Harlan Sur

I appreciate the color there. And another quarter of strong revenue growth and growth in operating margin profitability in AGS, right? 30% operating margins, I think that's the highest level, I think, in two years. Plus your incremental gross margins, I think for the last couple of quarters have been low above 40%. So strong and also have been delivering strong incremental operating margins as well. I know the team has historically thought that they could drive AGS operating margins longer term into the low 30% range. But on your strong incremental margin profile, could we see gross margins approaching the 40% range and operating margins in the mid-30s as AGS revenues continue to scale higher advanced services becomes a bigger part of the mix kind of over the long term?

Brice Hill

Yes. Thanks, Harlan. So I think not different from the semi business. We do expect that we have the opportunity to improve gross margins over time in the services business. And what's happening there is that solutions like the information solutions that come from AI are allowing us to develop new products and be more efficient in the services that we're providing. That combined with the growing installed base gives us good growth there. And then this year, we had the benefit of significant increase in utilization, which grows the spares business more quickly than in prior years. So that helps us from a gross margin perspective. That -- from that point, you can only grow to 100% utilization once. So that sort of slows down. But we do expect we'll be able to improve gross margins over time in the services business.

Gary Dickerson

Yes, Harlan, I would add that I would add that for customers right now, optimizing output and yield is incredibly important in a supply-constrained environment, and that's going to go on for some period of time. So the value of services that optimize yield is incredibly valuable. And the good news is we have a lot of new innovations there. We talked about over 37,000 chambers connected to our AX servers. We have AI-enabled applications for preventative maintenance or chamber matching. Those are incredibly valuable services that will drive our top line growth, our service contract growth faster and also enable us to capture value more quickly. So actually, I am more positive on growth in the AGS business, both top line and bottom line than I've ever been.

Operator

And our next question comes from the line of Blayne Curtis from Jefferies.

Blayne Curtis

I want to ask on NAND. It doubled in the quarter, obviously, off a small base. Just curious what you're seeing in that market. And then you did mention it in October. I'm assuming maybe that's a small dollar that's why you didn't call it out, but is it continuing to grow?

Brice Hill

Hi, Blayne. Yes, good growth in NAND this year from a percentage perspective, small base, like you say, but we think this year is a strong year of growth for NAND. As we look forward, into our next year, we think the dynamic is that really that AI dynamic that we've called out before and Gary mentioned earlier, leading-edge logic and DRAM and advanced packaging will be the fast growers. ICAP should return to growth for us, NAND to grow but will be the slower grower in the out year.

Blayne Curtis

And then, Brice, maybe on CapEx. You talked about the expansion of spending for 2030. I don't know if that's going to hit now. I'm just kind of curious if you can comment on what you expect OpEx to be in October? And then just any perspective next year? I think EPIC rolls off. So I think the prior was that it would go down. But now with the strength in the business, I'm just curious how you're thinking about that spend.

Brice Hill

Yes, that's a great question because you're right, on the strength of the business, of course, we have more additions that we want to do. This is a CapEx comment. We want to -- we will be putting equipment inside EPIC as well as other investments. So what I would say about CapEx, it will still be a year that's higher than normal, but it will decline as a percentage of revenue as we go into 2017. So that's our perspective at this point.

Operator

And our next question comes from the line of Jim Schneider from Goldman Sachs.

James Schneider

I was wondering if you can maybe comment, given the strength you're seeing across your focus areas. As you look into fiscal '27 or calendar '27, when you care to rank order where you see the incremental strength between foundry/logic, DRAM spending in advanced packaging?

Brice Hill

Yes. Jim, this is Brice, I'll start. We actually don't distinguish between them. We think the system-level pull that AI provides is similar across those different end markets. So I wouldn't call the difference enough to distinguish between them. So it will be strong for leading logic. It will be strong for DRAM. It will be strong for advanced packaging. And what's new for us now is that we also think that ICAP will grow next year. So that's another difference from our previous 90 days.

Gary Dickerson

Yes, Jim, thanks for the question. Yes, I think we talked earlier about 80% of WFE growth in those three segments in '26. And we see a similar profile, maybe even a better profile. But right now, we'd say similar profile in '27. Those three segments, as Brice talked about, we see those as the fastest-growing segments in '26 and '27 and frankly, over the next several years.

James Schneider

That's helpful. And then just given the first half versus second half dynamic we're seeing in calendar '26. Is there any reason why in calendar '27, you wouldn't see an accelerating growth rate for overall revenue. Is there anything you see on the horizon that would give you pause?

Brice Hill

I think a lot of people asked Jim about what is governing growth. I think as you move into the longer term, what governs growth is clean room from our perspective. So customers continue to add clean room projects. That's why we raised our forecast this year. Some of those will add incremental clean room space next year. And of course, it gets larger as the out years come into into focus because those projects usually take a number of years. But anyway, I think it will be the availability of clean room at a high level that will determine what we can all ship next year.

Operator

And our next question comes from the line of Mehdi Hosseini from Susquehanna International.

Mehdi Hosseini

Yes. I just have a couple of follow-up for Gary. Forget about the near-term trend, but I want to better understand how you're thinking about your targeted revenue, gross and operating margin for a scenario where WFE will be $150 billion to $175 billion. Any color would be great.

Gary Dickerson

Hi, Mehdi, thanks for the question. Yes, I think when we have the October investor event, we'll give more color relative to growth rates. What I would say is that if I look at the setup relative to compute demand going forward. We see this as a strong multiyear growth driver and the fastest-growing segments market, what we talked about earlier, the most valuable parts of the market leading-edge foundry logic, DRAM, advanced packaging. We're #1, and we're positioned to gain share going forward in those segments. So I think top line growth, we have a number of really great drivers that will enable us to outperform in '26, and we look at very strong growth going forward. And I also believe that really across the board, the value that we're delivering is also increasing. We are -- we do have the most unique connected portfolio that's creating tremendous value for our customers, for new chip and packaging architectures, that puts us in a good position to continue to drive our margins higher going forward. And I mentioned earlier about the innovations and yield and output. And as you can imagine, Mehdi, every single customer, they're focused on getting as many chips out per square meter as they possibly can. So that increases the value of our service business, and we're bringing innovation that really directly address those areas of focus for our customers. So I think relative to the top line growth, bottom line growth, I'm very optimistic. But we'll give more color, Mehdi, when we have our October investor meeting.

Brice Hill

I'll add -- I'll just do one add, Mehdi. You're really describing this year and scenarios that people are talking about for this year. So I think we're giving you the ingredients for that with a greater than 20% services business for the calendar year, something higher than greater than 30% for the semi business. We talked about our gross margin outlook. We give you the display item. And then whatever that WFE number is, we've said we expect to gain share. So I think you have the ingredients needed to have a perspective on that.

Mehdi Hosseini

Got it. Just a quick follow-up. I think your NAND has been relatively the smallest part of your semi and I think it's a reflection of more of an upgrade going on within the NAND than wafer capacity add. When do you think the industry would actually start adding some with the capacity to offset some of these losses due to increased migration to a [ 300-layer ] account.

Brice Hill

Hi, Mehdi. Yes, so for the dynamic here, I think we've described in the past is wafer starts continue to decline in NAND. So the projects you see are for upgrades, as you described, to get more layers. We expect the environment to continue the same dynamic for the next few years. The one place that will be different is new projects in China, I believe. But for the larger customers, it's mostly increased space to afford those upgrades in layers that you described.

Michael Sullivan

Yes. Thanks, Mehdi. And operator, we have time for one more question, please.

Operator

Then our final question for today comes from the line of Srini Pajjuri from Royal Bank of Canada.

Srinivas Pajjuri

Gary, a couple of questions on the technology front. You talked about panel-level packaging. And just curious as to when do you see panel-level packaging becoming mainstream. And compared to your current position in advanced packaging, what sort of opportunities do you see in that market? And then also, if you can touch on hybrid bonding. It seems like that's finally happening and what sort of opportunities you're seeing in the market?

Gary Dickerson

Yes. Thanks for the question. So as I talked about earlier on the call, packaging is one of the most important areas in the industry relative to improving AI compute performance and power, multichip connectivity value the data, huge focus for all of our existing customers and new customers that are innovating with new architecture. So over 70% growth this year. We have, by far and away, the strongest portfolio of technologies. We've also talked about acquisitions that we've done here recently that add to our strength in packaging. So I have very high confidence that we will continue to drive significant growth over many years in packaging. Relative to new substrates, all of our customers are really focused on connecting as many logic and memory chips together at the highest performance and power as they can. And so we're in deep co-innovation relationships with companies, and there is a race for all of these companies to drive these new architectures to market because there's so much value in performance and power. So I look at that as a great opportunity when we model our share of those new architectures, we have a great opportunity to grow our share. We have new capabilities that will expand our available market as those new architectures are adopted. And I don't want to give a specific forecast relative to timing. But what I would say is that we will see a pretty significant growth in next year. in our panel revenue. And certainly, it's going to ramp a fair amount after that going forward. But our position there are stronger. And then relative to hybrid bonding, hybrid bonding is a way that every every customer, whether it's leading edge, [ oundrylogic ] or DRAM or high bandwidth memory, they're all wanting to shorten the wiring length to improve the performance and power. So it's a very important inflection for all of our customers. Again, Applied has strong technology in hybrid bonding. We have also very big business in the adjacent steps around the hybrid bonding, we have the only integrated R&D facility, working with our customers to enable those new architectures for packaging. So this will be a meaningful growth driver over time in addition to all the other technologies that we have in advanced paging. So I'm very optimistic over 70% growth this year and very strong growth in '27 and going forward.

Srinivas Pajjuri

Then one quick follow-up for Brice. Brice, I understand you don't want to give us F Q1 guidance, but you did call out that it's a 14-week quarter. I'm just wondering what sort of impact, if any, that will have on your revenue sequentially.

Brice Hill

Sure. What we've seen in prior years when we had a 14th week in the quarter was you get close to a ratable performance on the services side of the business and not so much on the equipment side, most of the planning is done at a quarterly basis on the equipment side. So yes. And then from a spending perspective, as you might imagine, everybody wants to be paid. And so most of the spending will occur in the quarter. Thanks, Srini.

Michael Sullivan

So thank you, Srini, for your questions. And Brice, would you like to get a little summary before we close the call.

Brice Hill

Thanks, Mike. We're excited that Applied's unique portfolio and strategy are enabling us to grow faster than the market and increase margins. We look forward to an even stronger second half and to seeing many of you at our upcoming events. I'll be attending Citi conference in New York, and Gary will be at the Goldman Conference in San Francisco. The whole team looks forward to seeing you at the EPIC Center in October and giving you our longer-term outlook at our investor breakfast at SEMICON West. Mike, please go ahead and close the call.

Michael Sullivan

All right. Well, thank you, Brice, and we'd like to thank everybody for joining us today. A replay of today's call is going to be available on the IR page of our website by 5:00 Pacific Time, and we'd really like to thank you for your continued interest in Applied Materials.

Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.