Applied Materials CEO: Chip Expansion Cycle to Last Several More Years
Claire Weston
Applied Materials CEO Gary Dickerson says major customers have shared equipment-demand outlooks stretching beyond two years, with some giving directional forecasts through 2030 — a sign the AI-driven semiconductor investment cycle may run far longer than the market assumed.
Why are customers committing so far ahead?
Dickerson says the company has "extremely clear" visibility on the next eight quarters, with three-year forecasts growing more precise.
This means → major chipmakers are not speculating; their own expansion plans are locked in, and they need equipment suppliers to prepare in parallel.
The customer list spans TSMC, Samsung, Intel, SK Hynix, Micron, and Kioxia — virtually every leading-edge manufacturer on the planet.
Why has packaging become the fastest-growing segment?
Dickerson calls advanced chip packaging one of the fastest-growing segments in the entire semiconductor industry; Applied Materials expects the business to grow 50% this year.
In plain terms = shrinking circuits used to be the main path to faster chips, but that path is hitting physical limits. The industry is shifting to connecting multiple chips into a single system — and packaging is the technology that makes that possible.
In his words: "How you connect compute components together … will be one of the most exciting, fastest-growing segments."
How fast is the global semiconductor market really growing?
The global semiconductor market is forecast to surpass $1.5 trillion for the first time in 2026 — roughly four years ahead of earlier projections.
This means → massive AI-infrastructure spending plus rising memory prices have compressed the industry's growth timeline dramatically.
According to WSTS, the market is expected to climb past $1.9 trillion by 2027.
China revenue is falling — how worried is Applied Materials?
China accounted for 30% of fiscal 2025 revenue, down from 37% the prior year — a visible drop, yet Dickerson says he is "not overly concerned."
This reflects the fact that Applied Materials' China customers sit mainly in mature-process segments — connected devices, telecom, auto, power sensors — not leading-edge chips, so they fall largely outside the tightest export controls.
Put simply = over 80% of the company's growth comes from cutting-edge equipment. The declining China share barely touches the growth engine.
Can this expansion cycle really last?
Applied Materials is ramping capacity aggressively, recently opening a $500 million production facility in Singapore.
Dickerson acknowledges the U.S. semiconductor reshoring trend but stresses that sustained investment in talent, energy, water, and materials infrastructure is still required.
This means → whether customers' long-range demand visibility actually converts into orders will be the real test of this cycle's durability — visibility is not the same as commitment.
Content is for reference only, not financial advice.