應用材料 (AMAT) 2017 Q2 法說會逐字稿

Good afternoon, everyone. I'm Mike Sullivan, Head of Investor Relations at Applied Materials. We appreciate you joining us for our second quarter of fiscal 2017 earnings call, which is being recorded. Joining me are Gary Dickerson, our President and CEO; and Bob Halliday, our Chief Financial Officer.

大家下午好。我是應用材料公司投資者關係主管麥克·沙利文。感謝您參加我們2017財年第二季財報電話會議，本次電話會議正在錄音。與我一同出席的有我們的總裁兼執行長 Gary Dickerson，以及我們的財務長 Bob Halliday。

Before we begin, let me remind you that today's call contains forward-looking statements, including those about Applied's current view of its industries, performance, product road map, share positions, revenue growth and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially and are not guarantees of future performance.

在開始之前，請允許我提醒各位，今天的電話會議包含前瞻性陳述，包括有關 Applied 目前對其所在行業、業績、產品路線圖、市場份額、收入增長和業務前景的看法。這些聲明存在風險與不確定性，可能導致實際結果與預期有重大差異，且不構成對未來績效的保證。

Information concerning these risks and uncertainties is contained in Applied's most recent Form 10-K and 8-K filings with the SEC. All forward-looking statements are based on management's estimates, projections and assumptions as of May 18, 2017, and Applied assumes no obligation to update them.

有關這些風險和不確定性的資訊包含在 Applied 向美國證券交易委員會提交的最新 10-K 表格和 8-K 表格文件中。所有前瞻性陳述均基於管理階層截至 2017 年 5 月 18 日的估計、預測和假設，Applied 公司不承擔更新這些陳述的義務。

Today's call also includes non-GAAP adjusted financial measures. Reconciliations to GAAP measures are contained in today's earnings press release and in our reconciliation slides, which are available on the Investor Relations page of our website at appliedmaterials.com.

今天的電話會議還包括非GAAP調整後的財務指標。與 GAAP 指標的調節表包含在今天的獲利新聞稿和我們的調節表幻燈片中，這些幻燈片可在我們網站 appliedmaterials.com 的投資者關係頁面上找到。

And now I'd like to turn the call over to Gary Dickerson.

現在我想把電話交給加里·迪克森。

Thanks, Mike. I'm very happy to report another record-breaking quarter for Applied Materials with the highest revenue and earnings in our history. We've now set earnings records for 4 quarters in a row, and as I look across the company, I see tremendous momentum. Our markets are strong and getting stronger and we're sustainably growing faster than these markets by expanding our served opportunity and gaining share.

謝謝你，麥克。我非常高興地宣布，應用材料公司又迎來了一個破紀錄的季度，營收和利潤均創歷史新高。我們已經連續四個季度創下獲利紀錄，縱觀整個公司，我看到了巨大的發展動能。我們的市場強勁且不斷增強，我們透過擴大服務機會和提高市場份額，實現了比這些市場更快的永續成長。

In today's call, I will provide our perspective on the factors driving the industry and our strategy for sustainable, profitable growth within this environment. I will then describe the key inflections and investments within our markets before concluding with updates on our major businesses. Bob will then provide additional detail about our performance and outlook.

在今天的電話會議中，我將闡述我們對推動產業發展的因素的看法，以及我們在這種環境下實現可持續、獲利成長的策略。接下來，我將介紹我們市場中的關鍵轉折點和投資，最後總結我們主要業務的最新進展。隨後，鮑伯將提供有關我們業績和前景的更多細節。

Let me start with the big picture. This is an incredibly exciting period for the electronics industry, with a broader set of drivers and a wider spectrum of companies making very large investments to advance semiconductor and display technology. In the past, PCs were the dominant factor in semiconductor demand. PCs drove the technology road map and enterprise refresh cycles drove industry upturns and downturns. More recently, global adoption of smartphones, combined with social media, have created a much more pervasive consumer demand, expanding the market and making it substantially less cyclical. Today, many new demand drivers are emerging that layer on top of traditional computing and mobility, technologies like the Internet of Things, big data and artificial intelligence are transforming industries, including transportation, health care, entertainment and manufacturing. The way these industries create value is increasingly dependent on capturing, transmitting, understanding and storing data. In turn, this means they are more and more reliant on advanced semiconductors. The impact for Applied is twofold. First, our markets are growing and becoming more stable. Second, this is a period of incredible innovation in logic, memory and display, and we are in a great position to provide the critical building blocks needed to move the industry forward.

讓我先從宏觀角度來談談。對於電子產業來說，這是一個令人無比興奮的時期，驅動因素更加多元化，越來越多的公司投入大量資金來推動半導體和顯示技術的發展。過去，個人電腦是半導體需求的主要驅動因素。個人電腦引領了技術發展路線圖，企業更新換代週期決定了產業的興衰。近年來，智慧型手機在全球的普及，加上社群媒體的興起，創造了更普遍的消費需求，擴大了市場規模，並使其週期性波動大大降低。如今，許多新的需求驅動因素正在湧現，它們疊加在傳統的運算和行動技術之上，物聯網、大數據和人工智慧等技術正在改變包括交通、醫療保健、娛樂和製造業在內的各個產業。這些產業創造價值的方式越來越依賴資料的取得、傳輸、理解和儲存。反過來，這意味著他們越來越依賴先進的半導體技術。對應用科技的影響是雙重的。首先，我們的市場正在成長並變得更加穩定。其次，這是邏輯、儲存和顯示領域創新蓬勃發展的時期，我們處於非常有利的位置，能夠提供推動產業發展所需的關鍵基礎模組。

At Applied, our strategy is to be the innovation leader in markets that are evolving faster than ever before. To do that, we fueled innovation by reallocating resources and significantly increasing our investment in new product development. Then, to drive repeatable success and accelerate the pace of learning, we've developed a unique operating system, our product development engine, and trained more than 10,000 employees how to use it. Across the organization, we're focused on delivering highly differentiated products and services that enable customers to build new devices and structures that were never possible before. I believe our innovation leadership is sustainable because of the breadth and depth of our capabilities. Our ability to combine unique competencies, technology and intellectual property, accelerates our innovation process and sets us apart from competitors.

在應用材料公司，我們的策略是成為瞬息萬變的市場中的創新領導者。為此，我們透過重新分配資源並大幅增加對新產品開發的投資來推動創新。為了推動可重複的成功並加快學習速度，我們開發了一個獨特的作業系統——我們的產品開發引擎，並培訓了超過 10,000 名員工如何使用它。整個組織致力於提供高度差異化的產品和服務，使客戶能夠建造以前從未實現過的新設備和結構。我相信，我們之所以能夠維持創新領先地位，是因為我們擁有廣泛而深入的能力。我們能夠將獨特的能力、技術和智慧財產權結合起來，這加快了我們的創新進程，使我們從競爭對手中脫穎而出。

Having provided this context, I'll now describe the major inflections and investments taking place within our markets. Sales of memory chips are at record levels, fueled by increasing content in smartphones to support better cameras and VR applications as well as the need for more and higher performance storage in data centers. Market fundamentals remain strong and as a result, we are seeing robust investment from our memory customers. We believe we will see double-digit growth in DRAM spending this year, and we expect NAND investment to be even stronger. Our view of 2018 and beyond is also positive for a number of reasons. The explosion of data storage requirements created by IoT, big data, AI and streaming video has only just begun. Data generation from new categories, such as Industry 4.0 and autonomous vehicles, can potentially dwarf existing applications within a few years. As 3D NAND bit density increases and cost per bit falls, new segments of the storage market are opening up for solid-state drives. And at the same time, the bit density increase from generation to generation is slower for 3D than it was for planar NAND. To compensate, the industry needs more wafer starts and greenfield capacity.

在交代了以上背景之後，我將介紹我們市場中正在發生的重大轉折點和投資。受智慧型手機中為支援更好的相機和虛擬實境應用而不斷增加的內容，以及資料中心對更多、更高效能儲存的需求的推動，儲存晶片的銷售量達到了創紀錄的水平。市場基本面依然強勁，因此，我們看到來自記憶體客戶的強勁投資。我們相信今年DRAM支出將實現兩位數成長，我們預計NAND投資將更加強勁。基於多種原因，我們對 2018 年及以後的前景也持樂觀態度。物聯網、大數據、人工智慧和串流媒體影片帶來的資料儲存需求爆炸性成長才剛開始。來自工業 4.0 和自動駕駛汽車等新興領域的數據產生量，可能在幾年內就遠遠超過現有應用的數據量。隨著 3D NAND 位元密度增加和每位元成本下降，固態硬碟正在開拓儲存市場的新領域。同時，3D NAND 的位元密度逐代成長速度比平面 NAND 慢。為了彌補這一不足，產業需要更多的晶圓生產啟動和新建產能。

In foundry, we're also seeing an acceleration of investment, both at the leading edge and in trailing geometries. In 2017, we expect investment in new leading edge capacity to make up about 60% of total foundry spending. This is driven by demand for more sophisticated smartphone processors as well as customers positioning to win the major inflections in high-performance computing and data centers that are needed to start unlocking the potential of AI. Within foundry, logic and DRAM, I'm increasingly excited about our opportunities in patterning. As these customers move to smaller chip geometries, all the layers in the device scale. A limited number of layers will move to EUV, but significantly more will move to multi-patterning. This means our patterning opportunity will expand considerably over the coming years. Applied is making significant investments to enable the patterning road map. We've already increased our patterning revenues more than 60% in the past year and still have significant room to grow.

在鑄造業，我們也看到投資正在加速成長，無論是尖端技術還是後續技術。2017 年，我們預計新型尖端產能的投資將佔晶圓代工總支出的 60% 左右。這是由於對更先進的智慧型手機處理器的需求，以及客戶為贏得高效能運算和資料中心領域重大轉折點而進行的佈局，而這些轉折點對於釋放人工智慧的潛力至關重要。在晶圓代工、邏輯電路和DRAM領域，我對我們在圖案化方面的機會越來越感到興奮。隨著這些客戶轉向更小的晶片尺寸，裝置中的所有層都會縮小。少數層將採用極紫外光刻技術，但更多的層將採用多重曝光技術。這意味著未來幾年我們的模式設計機會將大幅增加。應用材料公司正在進行大量投資，以實現其圖案化路線圖。過去一年，我們的圖案設計收入已經成長了 60% 以上，而且還有很大的成長空間。

Taking all these factors into consideration, we now believe that wafer fab equipment spending for the calendar year could be up about 15% relative to 2016, and our outlook for 2018 and beyond remains positive. Our expectations for the display market also continue to strengthen as a result of large inflections in both TV and mobile screen technology. Average TV sizes are expected to reach 44.5 inches in 2017, up 5 inches in the past 3 years. One of the key factors driving this growth is demand for large-format TVs, 60 inches and above. As customers optimize factories for these bigger screen sizes, they are investing in new Gen 10.5 capacity. In parallel, we see investment in mobile OLED getting stronger as confidence in the adoption rates of OLED technology increases. Recent forecasts indicate that 2/3 of new smartphones could have OLED displays by 2021 and screen manufacturers are accelerating their investment plans accordingly.

綜合考慮所有這些因素，我們現在認為，本年度晶圓製造設備支出可能比 2016 年增長約 15%，我們對 2018 年及以後的展望依然樂觀。由於電視和行動螢幕技術的巨大變革，我們對顯示器市場的預期也持續增強。預計到 2017 年，電視機的平均尺寸將達到 44.5 英寸，比過去 3 年增加了 5 英寸。推動這一成長的關鍵因素之一是對 60 吋及以上大尺寸電視的需求。隨著客戶優化工廠以適應這些更大的螢幕尺寸，他們正在投資新的第 10.5 代產能。同時，隨著人們對 OLED 技術普及率的信心增強，我們看到對行動 OLED 的投資也不斷增加。近期預測顯示，到 2021 年，三分之二的新智慧型手機可能採用 OLED 顯示屏，螢幕製造商也正在相應地加快投資計劃。

My final comments about the market environment relate to China, which is an important long-term growth opportunity for Applied. We believe 2017 spending will be slightly higher than last year. And based on the projects we're tracking, we expect to see a significant and steady investment ramp in both semiconductor and display beginning in 2018.

關於市場環境，我最後想談談中國，中國是應用材料公司重要的長期成長機會。我們認為2017年的支出將略高於去年。根據我們追蹤的項目，我們預計從 2018 年開始，半導體和顯示器領域的投資將出現顯著且穩定的成長。

I'll now provide updates on the performance and priorities for our major business groups. Overall, Applied gained 2 points of wafer fab equipment share in 2016 and based on the strength of our product portfolio, I believe will add to those gains over the next several years. In our leadership businesses, such as PVD, epi, implant and thermal processing, where we have strong share and highly differentiated products, we're extending our advantage. The available market for our leadership products is also growing, specifically in PVD and CMP. In PVD, we expect our available market to expand by more than 30% in 2017 as foundry customers adopt new interconnect technology for lower power devices. And the CMP market grew 40% in 2016 and is on track to grow another 20% this year, primarily driven by increasing steps in 3D NAND.

接下來，我將報告我們主要業務部門的業績和工作重點。總體而言，Applied 在 2016 年晶圓製造設備市佔率成長了 2 個百分點，基於我們強大的產品組合，我相信在未來幾年內將繼續成長。在我們擁有強大市場份額和高度差異化產品的領先業務領域，例如 PVD、外延、植入和熱處理，我們正在擴大我們的優勢。我們的領先產品在市場上的份額也在不斷增長，尤其是在 PVD ​​和 CMP 領域。在 PVD ​​領域，我們預計 2017 年可用市場將成長 30% 以上，因為代工廠客戶採用新的互連技術來製造低功耗裝置。2016 年 CMP 市場成長了 40%，預計今年還將成長 20%，這主要是由 3D NAND 製程的進步所推動的。

In our high-growth businesses, we are also outperforming our competitors in markets that are growing rapidly. In 2016, we gained about 5 points of share in conductor etch and 2 points in etch overall. This means that since 2012, we've won nearly 20 points of conductor share and 10 points of total etch share. These gains are driven by enabling technologies, like Sym3 and selective etch and new process steps. Our CVD business is also outpacing the market, gaining almost 6 points of market share in 2016. We have great momentum in these businesses and plenty of headroom to grow.

在我們高成長的業務領域，我們在快速成長的市場中也超越了競爭對手。2016 年，我們在導體蝕刻領域獲得了約 5 個百分點的市場份額，在整體蝕刻領域獲得了約 2 個百分點的市場份額。這意味著自 2012 年以來，我們在導體市場份額方面贏得了近 20 個百分點，在蝕刻總市場份額方面贏得了 10 個百分點。這些成果的取得得益於Sym3、選擇性蝕刻等先進技術以及新的製程步驟。我們的 CVD 業務也超過了市場平均水平，在 2016 年獲得了近 6 個百分點的市場份額。我們在這些業務領域發展勢頭強勁，並且還有很大的成長空間。

Service represents a stable and growing revenue stream for the company. On a year-on-year basis, we've now grown service revenues for 14 consecutive quarters and our compound rate of growth has been around 10% over the past 4 years. Our expanding portfolio of service solutions plays an increasingly important role for customers, helping them compress ramp times, improving device performance and yield and optimize output and operating costs. Because of this, I'm confident that we can continue to grow service at a similar pace.

服務業為公司帶來了穩定且不斷成長的收入來源。從年同比來看，我們的服務收入已經連續 14 個季度成長，過去 4 年的複合成長率約為 10%。我們不斷擴展的服務解決方案組合對客戶發揮越來越重要的作用，幫助他們縮短啟動時間，提高設備效能和良率，並優化產量和營運成本。正因為如此，我相信我們能夠繼續以類似的速度發展服務。

Another exciting growth opportunity for Applied is display. Since 2012, we've grown display revenues around 20% per year, and we have great momentum. This year, we're on track to book more than $2 billion of orders. Display technology and manufacturing is becoming increasingly complex and Applied is in a unique position to enable the road map. By leveraging our semiconductor experience and capabilities, we are delivering the innovative products our customers need to accelerate major technology transitions.

應用材料公司另一個令人興奮的成長機會是顯示器。自 2012 年以來，我們的顯示器收入每年增長約 20%，並且我們保持著強勁的成長勢頭。今年，我們預計將獲得超過20億美元的訂單。顯示技術和製造正變得越來越複雜，而應用材料公司擁有獨特的優勢來制定發展路線圖。憑藉我們在半導體領域的經驗和能力，我們正在提供客戶所需的創新產品，以加速重大技術轉型。

Before I hand the call over to Bob, let me quickly summarize. Q2 was another record-breaking quarter and 2017 is shaping up to be an outstanding year for Applied. Our markets are becoming even more attractive. They are growing sustainably and becoming less volatile. And Applied is playing a larger and more valuable role advancing the innovation road map. We have focused our strategy and investments to ensure that Applied is the innovation leader that consistently delivers highly differentiated products and services. As a result, we're raising the ceiling for our performance and potential. We're setting new records, growing our available market and gaining market share.

在把電話交給鮑伯之前，讓我快速總結一下。第二季再次打破紀錄，2017 年對 Applied 來說有望成為輝煌的一年。我們的市場正變得越來越有吸引力。它們正在實現可持續增長，波動性也越來越小。應用材料公司在推進創新路線圖方面發揮更大、更有價值的作用。我們已將策略和投資重點放在確保應用材料公司成為持續提供高度差異化產品和服務的創新領導者。因此，我們正在提高自身表現和潛力的上限。我們正在創造新的紀錄，擴大我們的目標市場，並不斷提升市場份額。

Now, let me hand the call over to Bob.

現在，我把電話交給鮑伯。

Thanks, Gary. Before going into the details of the quarter, I'll touch on 3 things that are sustainably better for Applied: one, our markets; two, our improving position in those markets, which is enabling stronger gross margin performance; and three, our profitability and free cash flow.

謝謝你，加里。在詳細介紹本季業績之前，我想先談談Applied公司持續改善的三個方面：第一，我們的市場；第二，我們在這些市場中不斷提升的地位，從而實現了更強勁的毛利率表現；第三，我們的盈利能力和自由現金流。

First, our markets are more attractive. We believe wafer fab equipment spending will be higher and less volatile for the foreseeable future. Display equipment spending also looks higher and more attractive, for Applied Materials in particular, because we're greatly increasing our served addressable market. Many of you have added valuable insights as to why WFE has become larger and less volatile. I believe it boils down to 3 things: one, the semiconductor market is growing and becoming more diverse; two, equipment intensity is increasing; and three, capital investment is measured and rational.

首先，我們的市場更具吸引力。我們認為，在可預見的未來，晶圓製造設備的支出將會更高，波動性也會更小。顯示設備支出看起來也更高、更有吸引力，尤其對於應用材料公司而言，因為我們正在大幅擴大我們服務的潛在市場。你們中的許多人對WFE規模變大、波動性降低的原因提出了寶貴的見解。我認為歸根結底有三點：第一，半導體市場正在成長並變得更加多樣化；第二，設備密集度正在提高；第三，資本投資是經過控制和理性的。

This better industry environment is sustainable. As Gary mentioned, the semiconductor industry we enable has also become larger, more diverse and more critical to big innovations in the global economy. Today, we're seeing the emergence of new silicon-rich devices needed to enable the Internet of Things, cloud data centers and artificial intelligence. Data is becoming more valuable and harnessing the value requires silicon. For Applied, this translates to higher demand for logic and memory capacity at both the leading edge and trailing geometries. I believe the industry has seen a new wave of sustainable growth with economic value creation that justifies the cost of investment.

這種更佳的產業環境是可持續的。正如 Gary 所提到的，我們所支持的半導體產業也變得更大、更多樣化，對全球經濟的重大創新也更加重要。如今，我們正在見證新型富矽設備的湧現，這些設備對於實現物聯網、雲端資料中心和人工智慧至關重要。數據正變得越來越有價值，而發揮這種價值需要矽晶片。對於應用材料公司而言，這意味著無論是前沿結構還是後沿結構，對邏輯和儲存容量的需求都會更高。我認為該產業迎來了一波新的永續成長浪潮，其創造的經濟價值足以證明投資成本的合理性。

Next, Applied's position in the markets is sustainably stronger. The changes we've made since 2013 in strategy, capital allocation and business systems like the product development engine, have given us our strongest product pipeline in many years. I've been invited to an industrials conference this month to explain how our products are enabling big changes in manufacturing that many people call Industry 4.0. Here is how I plan to summarize our contribution without going into all of the technology.

其次，Applied 在市場上的地位更加穩固。自 2013 年以來，我們在策略、資本配置和業務系統（如產品開發引擎）方面進行了變革，使我們擁有了多年來最強大的產品線。本月我受邀參加一個工業會議，向大家介紹我們的產品如何推動製造業發生巨大變革，許多人稱之為工業 4.0。以下是我計劃在不涉及所有技術細節的情況下，總結我們貢獻的方式。

Applied has a very strong overall business that can be separated into just 2 parts. First, we have our leadership semi equipment and services business, which together generate nearly 60% of our revenue. Our leadership semi businesses drive technologies that are critical to making transistors for data processing and networking. We've maintained steady growth and high share positions averaging about 70% because we bring unique value to our customers. Our services business is similar in that it is highly enabling to our customers and characterized by steady, profitable growth. We are deeply engaged with our logic and foundry customers to enable their advanced road maps with this part of our business. When you think about the big new chips used for artificial intelligence, think of Applied Materials.

Applied 的整體業務非常強大，可以分為兩個部分。首先，我們擁有領先的半自動設備和服務業務，這兩項業務加起來貢獻了我們近 60% 的收入。我們的領先半導體業務推動著對製造用於數據處理和網路的電晶體至關重要的技術發展。我們保持了穩定的成長和平均約 70% 的高市場份額，因為我們為客戶帶來了獨特的價值。我們的服務業務與之類似，它能大大幫助我們的客戶，並以穩定、獲利的成長為特色。我們與邏輯電路和晶圓代工客戶密切合作，利用我們業務的這一部分來支援他們的先進路線圖。提到用於人工智慧的新型大型晶片，就不得不提到應用材料公司。

Second, we have our high-growth businesses, which include etch and deposition used in 3D NAND and multi-patterning, along with inspection and display. Our high-growth businesses now represent about 40% of our revenue. We've made outsized investments in new and disruptive products in these areas to capitalize on the inflections we identified in 2013. Our high-growth semi businesses have been growing 40% faster than their markets and Applied's unique display equipment business is growing even faster.

其次，我們擁有高成長業務，包括用於 3D NAND 和多重圖案化的蝕刻和沈積技術，以及檢測和顯示技術。我們高成長業務目前約占我們營收的 40%。為了利用我們在 2013 年發現的轉捩點，我們對這些領域的新興顛覆性產品進行了巨額投資。我們高速成長的半導體業務的成長速度比市場平均快 40%，而 Applied 獨特的顯示設備業務的成長速度甚至更快。

Another way to measure Applied's stronger position in the markets is to consider the changes in our share by semiconductor device type. In 2012, our share in foundry was over 20%, but our share in logic, DRAM and NAND was under 15%. Today, we believe our share is at least 22% in all 4. In fact, we are the #1 equipment company by revenue in NAND, DRAM, logic and foundry. So regardless of the spending mix, Applied is well positioned.

衡量應用半導體在市場中更強勢地位的另一種方法是考慮我們按半導體裝置類型劃分的市場份額變化。2012 年，我們在晶圓代工領域的份額超過 20%，但在邏輯、DRAM 和 NAND 領域的份額不到 15%。今天，我們相信我們在所有這四個領域的市佔率至少達到 22%。事實上，以收入計算，我們在 NAND、DRAM、邏輯和晶圓代工領域都是排名第一的設備公司。因此，無論支出結構如何，Applied 都處於有利地位。

A great measure of the strength of our products, the value they bring to our customers and our execution as a company is gross margin expansion. Since 2013, we have increased our gross margins in our semi, services and display segments across virtually every business unit. In 2017, I believe we will deliver company non-GAAP gross margin of about 46%, which would be up by about 5 points versus 2012, and the company's best annual performance in a decade.

衡量我們產品實力、產品為客戶帶來的價值以及公司執行力的一個重要指標是毛利率的成長。自 2013 年以來，我們在半導體、服務和顯示器等各個業務部門的毛利率均有所提高，幾乎涵蓋所有業務單位。我相信，2017 年公司非 GAAP 毛利率將達到 46% 左右，比 2012 年增長約 5 個百分點，這將是公司十年來最好的年度業績。

Now I'll talk about how these changes are flowing through the income statement to enable stronger profitability and shareholder returns. Over the 2013 to 2016 period, we have grown the revenue line by 44%. When we compared 2017 to 2013, we can see revenue growth of 90%. This revenue growth demonstrates the compounding benefits of our share gains and new product penetrations across semi, services and display. For the year, we expect our top line growth, gross margin performance and disciplined R&D investment and spending to generate the highest non-GAAP operating margin of the past 17 years and free cash flow of 20% or more. The company has returned 100% of the free cash flow we generated over the past 5 years and stands committed to returning excess cash to our shareholders.

現在我將談談這些變化如何體現在損益表中，從而實現更高的獲利能力和股東回報。2013 年至 2016 年期間，我們的收入成長了 44%。將 2017 年與 2013 年進行比較，我們可以看到收入成長了 90%。這項營收成長體現了我們在半導體、服務和顯示器領域市場佔有率提升和新產品滲透帶來的複合效益。今年，我們預計營收成長、毛利率表現以及嚴格的研發投資和支出將帶來過去 17 年來最高的非 GAAP 營業利潤率和 20% 或以上的自由現金流。公司已將過去 5 年產生的自由現金流 100% 回饋給股東，並致力於將多餘的現金回饋給股東。

Next, I'll comment on our performance during Q2. As a reminder, we no longer report quarterly orders because we are focused on driving year-over-year growth in revenue and profitability. Quarter-to-quarter demand patterns can vary across our business. However, we have grown our revenue and non-GAAP EPS on a year-over-year basis in 14 of the past 15 quarters. In Q2, we grew company revenue by 45% year-over-year and increased non-GAAP gross margin by 3.6 points. Our non-GAAP operating expenses grew by only 14% over this period, and we continue to invest 2/3 of OpEx in R&D to fuel our product development engine. We set new company records in profitability as we increased non-GAAP operating profit by 110% year-over-year and non-GAAP earnings per share by 132% year-over-year.

接下來，我將對我們第二季的業績進行評價。再次提醒大家，我們不再公佈季度訂單，因為我們專注於推動營收和獲利能力的年成長。我們業務的各個環節的需求模式可能有季度差異。然而，在過去 15 個季度中，有 14 個季度我們的營收和非 GAAP 每股盈餘都實現了同比增長。第二季度，公司營收年增 45%，非 GAAP 毛利率提高了 3.6 個百分點。在此期間，我們的非GAAP營運費用僅增加了14%，我們繼續將營運支出的2/3投入研發，以推動我們的產品開發。我們創造了公司獲利能力的新紀錄，非GAAP營業利潤年增110%，非GAAP每股收益較去年同期成長132%。

Now I'll compare our Q2 segment performance to the same period last year. We grew semiconductor systems revenue by 51% to $2.4 billion and non-GAAP operating margin by 9.7 points. We grew services revenue by 14% to a record $724 million, and non-GAAP operating margin by 80 basis points. We more than doubled our display revenue to $391 million and increased non-GAAP operating margin by 4.9 points.

現在我將把我們第二季的業務表現與去年同期進行比較。我們的半導體系統收入成長了 51%，達到 24 億美元，非 GAAP 營業利潤率提高了 9.7 個百分點。我們的服務收入成長了 14%，達到創紀錄的 7.24 億美元，非 GAAP 營業利潤率提高了 80 個基點。我們的顯示器收入翻了一番多，達到 3.91 億美元，非 GAAP 營業利潤率提高了 4.9 個百分點。

Turning to the balance sheet. We grew cash from operations by 87% compared to the same period last year. We ended the quarter with $7.7 billion of cash and investments, and nearly half was onshore. This increase includes proceeds from $2.2 billion in debt raised in March to increase onshore liquidity. Soon after the end of the quarter, we used approximately $200 million of the offering to redeem our October 2017 notes. We returned $390 million to shareholders in the quarter, paying $108 million in dividend and using $282 million to repurchase 7 million shares of stock at an average price of $38.15.

接下來看一下資產負債表。與去年同期相比，我們的經營活動現金流增加了 87%。本季末，我們擁有 77 億美元的現金和投資，其中近一半在國內。此次成長包括3月籌集的22億美元債務所得，用於增加境內流動性。季度結束後不久，我們利用此次發行所得的約 2 億美元贖回了 2017 年 10 月的票據。本季我們向股東返還了 3.9 億美元，其中 1.08 億美元用於支付股息，2.82 億美元用於以平均每股 38.15 美元的價格回購 700 萬股股票。

Now, I'll provide our third quarter guidance. We expect overall revenue to be in the range of $3.6 billion to $3.75 billion. The midpoint would be up by 30% year-over-year. On a year-over-year basis, our semiconductor systems revenue should increase by about 41%. Services revenue should increase by about 13%. And display revenue should increase by about 27%. Non-GAAP gross margin should be approximately 46.5%. Non-GAAP operating expenses should be $665 million, plus or minus $10 million. Non-GAAP EPS should be in the range of $0.79 to $0.87, the midpoint of which would be up by 66% year-over-year.

現在，我將提供我們第三季的業績預期。我們預計總收入將在 36 億美元至 37.5 億美元之間。中點將比上年同期上漲30%。與去年同期相比，我們的半導體系統收入應該會成長約 41%。服務收入預計將成長約13%。顯示器收入預計將成長約 27%。非GAAP毛利率應約為46.5%。非GAAP營運費用應為6.65億美元，上下浮動1000萬美元。非GAAP每股盈餘應在0.79美元至0.87美元之間，其中數值將較上年同期成長66%。

Finally, to help you with your models, we project revenue in Corporate and Other to be around $15 million. We expect non-GAAP interest and other expenses of about $42 million and a non-GAAP tax rate of approximately 10.2%. And in the fourth quarter, we expect non-GAAP OpEx to be around $675 million. The projected increase is primarily targeted at R&D for new opportunities we are pursuing in emerging inflections.

最後，為了幫助您建立模型，我們預計企業及其他收入約為 1500 萬美元。我們預計非GAAP利息和其他費用約為4,200萬美元，非GAAP稅率約為10.2%。我們預計第四季非GAAP營運支出約為6.75億美元。預計成長的資金主要用於研發，以抓住新興機會。

To summarize: one, our markets are sustainably better than at any other time in the history of the company; two, our competitive position and execution is sustainably better, giving us a strong pipeline of new and disruptive products and gross margin expansion; three, this growth, combined with disciplined investment and spending, is generating higher free cash flow, and we are committed to returning the excess to our shareholders.

綜上所述：第一，我們的市場狀況持續優於公司歷史上的任何時期；第二，我們的競爭地位和執行力持續提升，為我們帶來了強大的新產品和顛覆性產品的儲備，並實現了毛利率的擴張；第三，這種增長，加上審慎的投資和支出，正在產生更高的自由現金流，我們致力於將多餘的資金返給股東。

Now, Mike, let's start the Q&A.

麥克，現在開始問答環節。

Thanks, Bob. (Operator Instructions) Let's please begin.

謝謝你，鮑伯。（操作說明）請開始。

(Operator Instructions) Our first question comes from the line of C.J. Muse of Evercore ISI.

（操作說明）我們的第一個問題來自 Evercore ISI 的 C.J. Muse。

I guess, question around sustainability. You're guiding WFE $40-plus billion here for '17. And curious, what gives you the confidence to be so upbeat looking into '18 and beyond? And I guess as part of that, would love to hear your thoughts in terms of the contributions from areas like AI and public cloud investments versus, I guess, more traditional areas like smartphone and PCs in the past.

我想，這應該是一個關於永續性的問題。你們正在為 2017 年 WFE 帶來超過 400 億美元的收入。我很好奇，是什麼讓你對2018年及以後如此樂觀自信？我想，作為其中的一部分，我很想聽聽您對人工智慧和公有雲投資等領域的貢獻與過去智慧型手機和個人電腦等更傳統領域相比的看法。

Sure. Let me see if I can try to give you context. I think context rather than a point answer is useful, give you context over time and context over breadth. So if you look at context, we thought back at Analyst Day last September that 2016 WFE would be about $33.7 billion. And in fact, it ended up a little over $35 billion. We thought at Analyst Day last year, this year would be $34.5 billion. And in fact, it's starting with a 4 number this year and it looks very healthy. So it's trending up. So then you say, well, where is it trending up? We're kind of up across the board. Earlier in the year, we thought it was kind of 5% up across the board. Now we think the whole thing is up 15%. We're seeing in DRAM, NAND, foundry. Tactically, we're seeing high utilization in all the fabs. We see no diminution of ordering patterns. We don't see double bookings or anything people might fear. So we see -- when you see strength across virtually every customer and virtually every device type, that goes to some root cause questions. So in my opinion, we are facing what we've been talking about for a while which is, there is more root cause demand drivers for devices. Now longer-term, those root drive cause factors are going to be things like cars and AR/VR. What we're seeing now is tactically more content in the phones. We see a lot more content in the phones around NAND, DRAM, and we also see strength within the processor side on both the cutting edge and the lagging edge. Lagging edge, again, this year, will be over 40% of device types. But the cutting edge is pretty strong, too. So we're seeing broadscale demand. My belief is in the intermediate-term, there's more content going in phones and more going into the big data centers, which are both driving us, which will help us. So then the question is, why is there more going in? We believe that there's, what I call broadly speaking, more applications for processor technology, more apps on top of it that are driving systemic demand. And I think, frankly, we're in the early innings of it. So if you ask me, okay, is the second half good? Yes, we're okay. If you ask me, is '18 good? Yes, I think it probably starts with a 4 again. It's pretty good. If you ask me long-term, which is what I spend a lot of time on, I see more root cause drivers for growth in semiconductor and silicon growth than I've seen in years, and I think it's sustainable.

當然。我試著給你解釋一下背景。我認為提供背景資訊比給出具體答案更有用，可以提供時間上的背景資訊和更廣闊的視角。所以，回顧去年九月的分析師日，我們當時認為 2016 年全球金融業營收約 337 億美元。事實上，最終金額略高於 350 億美元。我們在去年的分析師日上預測，今年的營收將達到 345 億美元。事實上，今年它的開局數字是 4，看起來非常健康。所以它呈上升趨勢。那你就會問，那麼，它的上升趨勢在哪裡呢？我們各項指標都基本上升了。今年早些時候，我們認為整體漲幅大概在 5% 左右。現在我們認為整體上漲了 15%。我們在DRAM、NAND、晶圓代工領域都看到了這一點。從戰術層面來看，所有晶圓廠的使用率都很高。我們沒有看到訂購模式減少的跡象。我們沒有發現重複預訂或其他任何人們可能擔心的情況。所以我們看到——當幾乎所有客戶和幾乎所有設備類型都表現出強勁勢頭時，這就引出了一些根本原因問題。所以在我看來，我們現在面臨的正是我們一直在討論的問題，那就是設備需求的根本原因驅動因素更多了。從長遠來看，這些根本驅動因素將是汽車和擴增實境/虛擬實境等事物。我們現在看到的是手機上的內容在戰術上增加。我們看到手機中圍繞 NAND、DRAM 的內容越來越多，而且在處理器方面，無論是尖端技術還是落後技術，都展現出了強大的實力。今年，落後型設備將再次佔據設備類型的 40% 以上。但其尖端技術也相當強大。所以我們看到的是大規模的需求。我認為，從中長期來看，手機中的內容會越來越多，大數據中心也會容納更多的內容，這兩者都在推動我們發展，也將對我們有所幫助。那麼問題來了，為什麼還有更多資金流入？我們認為，從廣義上講，處理器技術還有更多應用，基於此技術的應用越來越多，這些應用正在推動系統性需求。坦白說，我認為我們還處於起步階段。所以如果你問我，好吧，下半場好不好看？是的，我們沒事。依我看，2018 年算好嗎？是的，我想它可能又是以 4 開頭的。還不錯。如果從長遠來看（這也是我花了很多時間研究的），我認為半導體和矽行業成長的根本驅動因素比過去幾年都多，而且我認為這是可持續的。

And C.J., this is Gary. If you look out over time, what drove our business in the past were the enterprise and PC upgrade cycles, then it moved to mobile, social media, very pervasive and driven by holiday season new products, where all of the consumer electronics companies had to have those products ready for Christmas or Chinese New Year. And if you go forward, you talked about AI and the importance of capturing, transmitting, understanding and storing data is really going to disrupt big industries: transportation, health care, entertainment, manufacturing. And when you look at AI chips, almost every week, somebody's announcing a new AI chip, that it's at the -- logic devices that are at the physical limits of how big they can build those chips because there's so much value in these changes that are happening in these major industries. And of course, that's great for us. If you're building these big logic chips, you need better transistors, you need much better interconnect technology and you also need more memory, which is materials-enabled and another area that's in the sweet spot for Applied Materials. So longer-term, these inflections really create even more sustainability in terms of our markets going forward.

C.J.，這位是加里。回顧過去，我們業務的驅動力過去是企業和 PC 的升級週期，後來轉向行動和社交媒體，這些領域非常普遍，並且受到假日季新產品的推動，所有消費電子公司都必須在聖誕節或中國新年之前準備好這些產品。展望未來，您談到了人工智慧以及擷取、傳輸、理解和儲存資料的重要性，這確實將顛覆大型產業：交通運輸、醫療保健、娛樂、製造業。當你觀察人工智慧晶片時，幾乎每週都有人宣布推出新的人工智慧晶片，這些晶片的邏輯元件已經達到了物理極限，因為這些主要產業正在發生的變革蘊含著巨大的價值。當然，這對我們來說是件好事。如果你要製造這些大型邏輯晶片，你需要更好的晶體管，你需要更好的互連技術，你還需要更多的內存，而內存的開發取決於材料，這也是應用材料公司擅長的另一個領域。從長遠來看，這些轉折點確實為我們未來的市場創造了更大的永續性。

Our next question comes from Harlan Sur of JPMorgan.

我們的下一個問題來自摩根大通的哈蘭‧蘇爾。

On the China domestic semiconductor market and the outlook there, especially as we think about looking into 2018, I think conservatively, we're tracking 3 to 4 domestic foundry programs and about 4 to 5 memory programs. Foundry, obviously, is a bit more mature. Memory, we're kind of early innings, like Phase 1 kind of development. But especially on sort of memory in China, and we get this question a lot from investors which is, is the team starting to get pipeline visibility into some of these programs actually starting to fire the confidence level that these programs are going to contribute to potentially a growth outlook for 2018? Love to get your views here.

關於中國國內半導體市場及其前景，特別是當我們展望 2018 年時，保守估計，我們正在追蹤 3 到 4 個國內晶圓代工項目和 4 到 5 個記憶體項目。顯然，Foundry 的發展歷程要成熟一些。記憶力方面，我們還處於早期階段，就像是第一階段的發展。但尤其是在中國市場，我們經常收到投資者提出的這個問題，那就是，團隊是否開始對其中一些項目有了更清晰的了解，從而真正開始提升人們對這些項目將為 2018 年的成長前景做出貢獻的信心？很想聽聽大家的看法。

Yes, thanks for the question. China's one of our strongest regions for both semiconductor and display, very deep customer relationships. And what we're looking at for 2017, if we compare to '15, it's about 2x growth in our semiconductor business, 50% growth in service, 50% in display. And the business is really driven by a couple of different strategic factors. One is, there's a big gap between supply and demand and there's this large drive to try to close that gap, and then also building a secure supply chain. When we look into 2018, what we're seeing right now is that the overall wafer fab equipment spending could be meaningfully up, more than $1 billion, maybe $1.5 billion from '17 to '18 and the domestic part of that increase is also up a meaningful amount in 2018. I don't know, Bob, if you want to add anything else?

是的，謝謝你的提問。中國是我們半導體和顯示器業務最強勁的地區之一，我們與客戶建立了非常深厚的合作關係。展望 2017 年，與 2015 年相比，我們的半導體業務將成長約 2 倍，服務業務成長 50%，顯示器業務成長 50%。而這項業務的真正驅動力是幾個不同的策略因素。一方面，供需之間存在巨大差距，因此各方都在努力縮小這一差距，另一方面，也努力建立安全的供應鏈。展望 2018 年，我們目前看到的是，晶圓製造設備總支出可能會大幅成長，從 2017 年到 2018 年可能超過 10 億美元，甚至可能達到 15 億美元，而且 2018 年國內部分的成長幅度也相當可觀。鮑勃，我不知道你是否還有什麼要補充的？

Yes, I think that's pretty accurate. And if you ask us to look longer-term, we see the domestic -- we see the total going up basically every year and the domestic part, in particular, going up every year.

是的，我覺得很準確。如果讓我們從更長遠的角度來看，我們看到國內市場——我們看到整體市場基本上每年都在成長，尤其是國內市場部分，每年都在成長。

Our next question comes from Timothy Arcuri of Cowen and Company.

我們的下一個問題來自 Cowen and Company 的 Timothy Arcuri。

Bob, I actually have 2 questions. Number one, just on the recent debt raise. I know you paid down $200 million of debt with that money. But I'm surprised that there's not kind of a new capital return that was announced with that. So I guess that's my first question. And then I wanted to also ask about SSG in the back half of the year because if I run the numbers on the calendar first half of the year, you're sort of annualizing to like $42 billion WFE, roughly. And if we're going to be at $40 billion for the year, then that would sort of say that the back half has to be down like roughly 10%. So I'm wondering if that math's right.

鮑勃，我其實有兩個問題。第一，僅就最近的債務融資而言。我知道你用那筆錢還了2億美元的債務。但令我驚訝的是，並沒有同時宣布新的資本回報計畫。所以，我想這就是我的第一個問題。然後我還想問一下下半年的SSG狀況，因為如果我把上半年的數據按日曆計算，年化後大約是420億美元（以世界財政預算執行）。如果今年的收入要達到 400 億美元，那就意味著下半年的收入必須下降約 10%。所以我想知道這個計算結果是否正確。

Yes, 2 complicated questions. The first one, we raised money, frankly, from an opportunistic point of view and, frankly, a shareholder perspective. So if you look it, we raised $2.2 billion, now we had to repay $2 billion -- $200 million, so it's about $2 billion net. And it was about 50% of it was 10-year money, about 50% was 30-year money. And the 10% money, maybe like 3.3% and 4.3%, okay? So the average rate's about 3.8%. So basically what we'll bring in to our capital structure is long-term debt at low rates, that's pseudo-equity at low cost of capital. So that's pretty attractive. The second thing we're doing is many people believe that there'll be some type of tax policy change this year or next, which will ease and facilitate the return of cash from overseas locations. Well, we're kind of hedging our bets. We're not sure about the timing and we want to stay committed to shareholder returns and keep our tax structure in place until there are any substantive changes. So I think this raise, if anything, was to continue to support meaningful returns of capital to investors. And as we said on the call, we've returned over 100% over the last 5 years. In this past quarter, the total was over $380 million, I think, between dividends and buybacks. So I think we are very committed to shareholder returns. We will hit the model, which is shrinking the share count. And if we get more line of sight to what's going to happen on the tax policy, then we'll react more effectively and more efficiently to how to maximize those shareholder returns. In terms of the -- how's the year look, we gave in the call a few data points. One, we said that our revenues in '17 fiscal year versus '13 were going to be up 90%. So you can see, we're going to have a good year. So our take on it is the year is a good year. Our take on it is the year is continuing to strengthen throughout the year. Our take on it is that we're going to gain share this year. So it's going to be a really good year for us. And that's just semi. Display, we're going to do well, too. We believe those drivers that drive the market and our share continue for a number of years. So is the number a $40 billion number or north of a $40 billion number? All we want to say now here in early May is it starts with a 4. It's up significantly from last year and it strengthened all year.

是的，這是兩個複雜的問題。坦白說，我們籌集第一筆資金是出於投機取巧和股東利益的考量。所以你看，我們籌集了 22 億美元，現在我們不得不償還 20 億美元——也就是 2 億美元，所以淨額大約是 20 億美元。其中約 50% 為 10 年期貸款，約 50% 為 30 年期貸款。那10%的錢，可能只有3.3%到4.3%，好嗎？所以平均利率約 3.8%。所以，基本上，我們將引入資本結構中的是低利率的長期債務，相當於低成本的股權融資。所以這很有吸引力。我們正在做的第二件事是，許多人認為今年或明年將會出現某種稅收政策變化，這將簡化和促進從海外匯回現金。嗯，我們算是採取了對沖策略。我們目前還不確定具體時間，我們希望繼續致力於股東回報，並在出現任何實質變化之前保持現有的稅收結構。所以我認為，這次融資的目的，如果說有什麼意義的話，就是為了繼續支持投資人獲得有意義的資本回報。正如我們在電話會議上所說，過去 5 年我們的回報率超過 100%。我認為，上個季度，股利和股票回購總額超過 3.8 億美元。所以我認為我們非常重視股東回報。我們將採用這種模式，即減少股份數量。如果我們能更清楚地了解稅收政策的走向，那麼我們就能更有效、更有效率地應對如何最大化股東回報的問題。至於今年的整體情況如何，我們在電話會議中提供了一些數據點。第一，我們曾表示，2017 財年的營收將比 2013 財年成長 90%。所以你看，我們今年會是個好年。所以我們認為今年是個好年。我們的看法是，今年情勢將持續改善。我們的看法是，今年我們將獲得市場份額。所以今年對我們來說將會是非常好的一年。而這只是半成品。展示方面，我們也會做得很好。我們相信，推動市場和我們市場份額成長的這些因素將在未來幾年內持續存在。所以這個數字是 400 億美元，還是超過 400 億美元？我們現在五月初只想說，它以4開頭。它比去年大幅成長，而且全年都在走強。

(Operator Instructions)

（操作說明）

Our next question comes from Farhan Ahmad of Crédit Suisse.

下一個問題來自瑞士信貸的法爾漢·艾哈邁德。

My question is, you've already talked about it quite a bit. Generally, just wondering if you guys have done any sort of analysis if one particular segment would benefit more than the other in terms of logic, NAND or foundry?

我的問題是，你已經談了很多次了。一般來說，我只是想知道你們是否做過任何分析，以確定在邏輯電路、NAND 快閃記憶體或晶圓代工方面，哪個特定領域會比其他領域受益更多？

Go ahead.

前進。

I think relative to AI, as I mentioned earlier, you see announcements almost every week of new logic AI chips going to the physical limits of the reticle field, so the physical limits or the ability of the semiconductor companies to build those chips. So a tremendous amount of transistors, vias, interconnect technology, all of that is in the sweet spot for Applied Materials. Our Transistor and Interconnect Group, all of those different products, epi, PVD, CMP, thermal processing, implant, are really unique and very strong positions for Applied Materials. So that growth is really exactly aligned with the products that we have in logic and in foundry and give us really a great growth opportunity. The other part of it's the materials enabled memory scaling. More and more you're seeing devices going from 2 dimensions to 3 dimensions. And as they're going to 3 dimensions, really, the ability to scale the performance and also the cost is all about new materials, new deposition, epi, new etch technology, selective removal, all of those areas. And personally, I'm increasingly optimistic that we have very innovative, highly differentiated new technologies that will not only enable further scaling in 3D NAND technology, but also enable new memory technologies. Our position there is very, very strong. The relationships and the engagements that we have with customers are broader and deeper than we've ever had in the past.

我認為就人工智慧而言，正如我之前提到的，幾乎每週都會有關於新型邏輯人工智慧晶片的公告，這些晶片已經達到了光刻技術的物理極限，也就是半導體公司製造這些晶片的能力極限。因此，大量的電晶體、通孔、互連技術，所有這些都正處於應用材料公司的優勢領域。我們的電晶體和互連事業部，包括外延、PVD、CMP、熱處理、離子注入等各種不同的產品，都是應用材料公司非常獨特且實力雄厚的領域。因此，這種成長與我們在邏輯和代工領域的產品完全一致，並為我們提供了巨大的成長機會。另一方面，材料的應用也實現了記憶體擴展。越來越多的設備正從二維發展到三維。隨著它們向三維發展，真正提升性能和降低成本的能力取決於新材料、新沉積、外延、新蝕刻技術、選擇性去除以及所有這些領域。就我個人而言，我越來越樂觀地認為，我們擁有非常創新、高度差異化的新技術，這些技術不僅能夠進一步擴展 3D NAND 技術，而且還能夠催生新的儲存技術。我們在那裡的地位非常非常穩固。我們與客戶的關係和互動比以往任何時候都更加廣泛和深入。

Our next question comes from Atif Malik of Citi.

我們的下一個問題來自花旗銀行的阿提夫·馬利克。

I have a question on the display product. So at the Analyst Day last year, you guys talked about expanding the TAM on the display products from 15% to 30%, 40% over the next 2 years. Just curious, how are your engagements going with those new display products so far?

我有一個關於展示產品的問題。所以在去年的分析師日上，你們談到了在未來兩年內將顯示產品的潛在市場規模從 15% 擴大到 30%、40%。我很好奇，到目前為止，你們的新展示產品使用情況如何？

So we have very broad and deep relationships with all the leading companies in display and also the leading consumer electronics companies that are using those displays. So we're in a really great position to enable these new technologies. And as customers are moving forward with new display technology, it increases our total available market and puts us in a good position to continue to grow that business. If you look at display overall, you really have 2 big drivers. One is the strong organic LED for mobile opportunity, and that is broadening out to a large number of customers, and also, the increased adoption of larger TV screens. So both of those are driving our business. As I said earlier, we have very strong and deep relationships with leading customers, and we are focused on the biggest technology challenges. If you look at all of those customers that want to get into the growing mobile OLED market, we're focused on the major technology challenges that enable those customers to build those kinds of devices. We're not ready to announce any specific opportunities at this point in time but we will later this year.

因此，我們與所有領先的顯示器公司以及使用這些顯示器的領先消費性電子公司都建立了非常廣泛和深入的合作關係。因此，我們處於非常有利的地位，可以推動這些新技術的發展。隨著客戶不斷採用新的顯示技術，我們的總市場規模不斷擴大，這使我們能夠更好地發展這項業務。從整體來看，顯示器主要有兩個驅動因素。一是行動端強大的有機發光二極體 (OLED) 技術帶來的機遇，這項技術正在惠及大量客戶；二是更大尺寸電視螢幕的普及。所以這兩方面都在推動我們的業務發展。正如我之前所說，我們與領先的客戶建立了非常牢固和深入的關係，並且我們專注於應對最大的技術挑戰。如果你看看所有那些想要進入不斷成長的行動 OLED 市場的客戶，我們會發現我們專注於能夠幫助這些客戶製造這類設備的主要技術挑戰。目前我們還不方便公佈任何具體的機會，但今年稍後我們會公佈。

Our next question comes from Krish Sankar of Bank of America Merrill Lynch.

下一個問題來自美國銀行美林證券的克里什桑卡爾。

The question I had was with WFE running at $40 billion, $40 plus billion this year and next year, where do you think 3D NAND WFE is within that? And if the prices for NAND roll over, will the reality of economics kick in and 3D NAND makers scale back their CapEx. Or do you think demand is strong enough to continue investing in capacity for the next 2 to 4 years?

我的問題是，WFE 市場規模今年和明年都將達到 400 億美元以上，您認為 3D NAND WFE 在其中處於什麼位置？如果 NAND 的價格持續下跌，經濟現實是否會發揮作用，3D NAND 製造商是否會縮減資本支出？或者您認為未來 2 到 4 年的需求是否足夠強勁，足以支持繼續投資產能？

Sure. So the question was, is 3D NAND going to keep expanding? Is that -- yes. So let me take a shot at that. So 3D NAND spending is up this year. It was up again last year. If you look at it, there's about 1.6 million wafer starts in the world of 3D NAND -- NAND in total. By the end of this year, they will convert at 750,000 wafer starts per month. So there's still a fair amount that's going to convert. I think that the vast majority that's going to convert over time because 3D performs better than 2D. I think what also helps memory in general, particularly NAND, is that more and more customers' customers are starting to swap out 3D NAND over time for hard disk drives. So overall demand for memory is going up. The share of NAND far -- versus hard disk drive will trend up, and 3D will be the NAND of choice versus 2D. So they're early in the build-out, 750,000. They got to get to 1.6 million. And we think that the installed capacity is going to go up over time because of this demand. Then if you look at greenfield versus refresh, we're kind of agnostic, frankly. So if you look at the cost of doing a greenfield 3D NAND factory, we do well. In fact, we're gaining share at virtually every product, I believe. If you look at transition [one] 3D to a higher level of 3D, the revenue opportunity for us is about the same.

當然。所以問題是，3D NAND 會繼續發展壯大嗎？是的。那我就來試著回答一下。所以今年3D NAND的支出有所增加。去年它又出現了。如果你看一下，你會發現 3D NAND 領域大約有 160 萬片晶圓開工——NAND 總量也是如此。到今年年底，他們的晶圓開工量將達到每月 75 萬片。所以，仍然有相當一部分會轉化成其他類型。我認為隨著時間的推移，絕大多數人都會轉變觀念，因為 3D 的效果比 2D 好。我認為，對整個記憶體產業（尤其是 NAND 記憶體）發展有利的一點是，越來越多的客戶的客戶開始逐漸用硬碟取代 3D NAND 記憶體。因此，對記憶體的整體需求正在上升。NAND快閃記憶體相對於硬碟的份額將呈上升趨勢，3D NAND快閃記憶體將成為相對於2D NAND快閃記憶體的首選。所以他們還處於建設初期，75萬。他們必須達到160萬。我們認為，由於這種需求，裝置容量會隨著時間的推移而增加。那麼，如果從零開始建構新系統還是進行系統更新，坦白說，我們對此持中立態度。因此，如果從新建一座 3D NAND 工廠的成本來看，我們做得很好。事實上，我相信我們在幾乎所有產品上的市佔率都在成長。如果從 3D 過渡到更高層次的 3D，我們的收入機會大致相同。

Our next question comes from Stephen Chin of UBS.

我們的下一個問題來自瑞銀集團的Stephen Chin。

Just a follow-up question on the higher outlook for wafer fab equipment spending. What customer type is driving that big increase in your WFE? And do you think this $40 billion number is the new normalized level for WFE and not a peak?

關於晶圓製造設備支出前景樂觀的問題，還有一個後續問題。導致貴公司 WFE 大幅成長的客戶類型為何？你認為400億美元是WFE新的正常水平，而不是高峰嗎？

Yes, it was seen across the board. We're seeing it at NAND, DRAM and foundry. Logic's kind of flattish. We're seeing it at almost every customer, I think, too. So it's very broad. And when you get that broad, it's not, hey, they're timing DRAM, they're putting more DRAM in a PC. The root cause is broader than that because it's across a wide range of device types of customers. So then you say, what are the applications driving? We do think it's more and more about more applications for your PC and your data center and stuff like that. So it does start to see this AI stuff, deep learning. Can I point exactly how much is AI? No. But it's across the board we're seeing this, right? So then in terms of the number, those are, I called earlier, I think this year begins with a 4. But I'm not saying it's 40, frankly. It's a good number, and I think next year's a good number. So I actually think the new normal is 40 plus. I think what I worry about internally at the company, that we don't plan more for the upside than downside. I think there's more opportunity on the upside than the downside.

是的，這種情況普遍存在。我們在NAND快閃記憶體、DRAM和晶圓代工領域都看到了這種情況。邏輯有點扁平化。我認為，我們幾乎在每個客戶身上都能看到這種情況。所以它的範圍非常廣泛。當範圍擴大到這種程度時，就不是說，嘿，他們在調整DRAM的時序，而是說他們在PC中加入了更多的DRAM。根本原因比這更廣泛，因為它涉及各種設備類型的客戶。那麼，你會問，這些應用程式在驅動什麼？我們認為，這越來越關乎適用於您的個人電腦、資料中心等等的應用程式。所以它開始關注人工智慧、深度學習這些東西了。我能具體說明一下人工智慧的價值嗎？不。但我們普遍看到的是這種情況，對吧？所以就數字而言，我之前說過，我認為今年是以 4 開頭的。但坦白說，我並不是說它是 40。這是一個不錯的數字，我認為明年也是一個不錯的數字。所以我認為新的常態是40歲以上。我認為我擔心的是，公司內部我們對上漲前景的規劃沒有更多地考慮下跌前景。我認為上漲的機會大於下跌的機會。

I think, one thing I'd add to that is that I think everybody is seeing a large increase in the amount of data and also the value of the data. If you look at deep learning, the amount of data that you process is going to go up. Right now, a lot of data's thrown away. So you've got an increase in the amount of data, and then the amount of data that's processed is also going to increase. So both of those factors make me personally pretty bullish about the memory business long-term. And certainly, that's also what we're hearing from our customers.

我認為，我還要補充一點，那就是大家都看到了數據量和數據價值的大幅成長。如果你研究深度學習，你會發現你需要處理的資料量將會增加。現在，很多數據都被丟棄了。因此，資料量增加了，那麼處理的資料量也會增加。因此，這兩個因素都讓我個人對記憶體產業的長期前景相當看好。當然，我們的客戶也表達了同樣的看法。

Our next question comes from Romit Shah of Nomura.

我們的下一個問題來自野村證券的羅米特·沙阿。

I did notice that display revenues were a little light in the quarter and that margins were down about 5 points. Can you talk about that, Bob? Is that just short-term noise? And last quarter, you gave a target for display. I think it was up -- for 2017, up 50%. Do you still feel good about that?

我注意到本季顯示器營收略顯疲軟，利潤率下降了約 5 個百分點。鮑勃，你能談談這件事嗎？這只是短期噪音嗎？上個季度，你們給了一個展示目標。我認為是上漲了——2017 年上漲了 50%。現在還覺得那樣做可以嗎？

Yes, we do. It's just timing and it's just logistical. Display's going to have a really good year. The underlying market dynamics are very strong for both TVs and mobile. And our position's really good. So I think display is strongly -- a lot of opportunity. And then we have a product cycle that we've discussed coming onboard later in the year. So I'm bullish on display, and I think I wouldn't read too much in these quarterly numbers. In terms of the numbers we set last quarter, yes, we'll hit those. Yes.

是的，我們有。只是時機和後勤上的問題。顯示器市場今年將會迎來非常好的一年。電視和行動裝置的潛在市場動態都非常強勁。我們的處境非常好。所以我認為展示業蘊藏著巨大的機會。然後，我們還有一個產品週期，我們討論過將在今年稍後推出。所以我對展銷會持樂觀態度，我認為不應該過度閱讀這些季度數據。就我們上季設定的目標而言，是的，我們將實現這些目標。是的。

Our next question comes from Toshiya Hari of Goldman Sachs.

下一個問題來自高盛的 Toshiya Hari。

Bob, I had a question on gross margins. You guys showed nice upside in the quarter. And just wondering what the drivers were here. In the past, I think you pointed to outsized growth and things like etch and display that were headwinds to the business. The recent improvement, is that a function of that headwind abating? Or is that a combination of mix shift and also fundamental and sustainable improvements across the board?

鮑勃，我有個關於毛利率的問題。你們本季展現出了不錯的上升勢頭。我只是好奇這些司機是做什麼的。過去，我認為你曾指出過超乎尋常的成長以及蝕刻和顯示等技術對業務造成的不利影響。最近的改善是因為逆風減弱所致？或者說，這是產品結構轉變以及各方面根本性和永續性改進的結合？

Yes. If you look at a company like Applied, the gross margin improvement or change is a function primarily of 2 things and one third thing that's a little smaller. One is execution and second is mix and the third, which is a little smaller, is absorption with volume, right? So if you look at execution, that's really 3 things: how you're executing cost reduction; how you're executing on new product development; and how you're executing in terms of field execution. So if you go look at it, this year, we're up a lot. We're up over a couple -- I don't know, several points. And if you look at it, I would say that the improvement -- we have underlying improved execution. So that this year, we're up about almost, what, 3 points? So if you look at it this year, execution is trending up and that'll continue on for a while. I think every year, we'll get better. Now we are benefiting from pretty good mix shifts. It's been a good year for our products in the TIG family, PVD, epi, things like that. And so it's helped a little bit. And absorption's helped a little bit this year. It's a pretty big year. It's over 40 and we're gaining share. But I would say that the overall gross margin performance of the company will trend up over time, but this year was helped a little bit by volume and by mix. But I would say I'm still positively upward bound on margins. So if you go -- if we have to redo a model in Analyst Day, I'd probably lean in on a higher WFE and higher margins.

是的。如果你觀察像 Applied 這樣的公司，你會發現毛利率的改善或變化主要取決於兩件事，還有一個影響較小的第三件事。一是執行，二是混合，三是吸收和音量，這三者的重要性稍低一些，對吧？所以，從執行層面來看，實際上有三件事：如何執行成本削減；如何執行新產品開發；以及如何執行現場執行。所以如果你去看一下，你會發現今年我們漲幅很大。我們領先好幾分——我不知道，好幾分吧。如果你仔細分析，我會說，進步在於──我們實現了根本的執行力提升。所以今年我們領先了大約，多少？ 3 分？所以從今年的情況來看，執行力呈現上升趨勢，而且這種趨勢還會持續一段時間。我認為我們每年都會進步。現在我們正受益於相當不錯的產品組合調整。對於我們的TIG焊接、PVD焊接、外延焊等產品來說，今年是個好年。所以這多少有點幫助。今年吸收情況也略有改善。今年意義非凡。已經超過40歲了，而且我們的市佔率正在成長。但我認為，公司的整體毛利率表現會隨著時間的推移而呈上升趨勢，但今年銷量和產品組合的最佳化在一定程度上幫助了毛利率的成長。但我認為我的利潤率仍然有上升空間。所以，如果——如果我們在分析師日必須重新做一個模型，我可能會傾向於更高的WFE和更高的利潤率。

Our next question comes from Joe Moore of Morgan Stanley.

下一個問題來自摩根士丹利的喬·摩爾。

I wanted to follow up on some of the questions on the upward revision in WFE, particularly with regards to memory. We look at sort of memory cash flows and make some assumptions that there's just an algorithmic percentage of that peak cash flow that gets spent, which is probably more negative than what you guys are describing that there are sort of people who are looking at the current situation and deciding that they need more supply. I mean, I guess it's more semantics, I guess. But how do you characterize when you see the upward revision that we've seen in just a 6-month window? How much of that is just because prices are better, companies have cash flow and they use it to improve their competitive position versus something that's more sort of structural and dynamic? How do you interpret it as the more structural aspect versus just better pricing?

我想就 WFE 的向上修訂提出一些問題，特別是關於記憶方面的問題。我們觀察一些記憶現金流，並做出一些假設，即峰值現金流中只有一定比例會被花掉，這可能比你們所描述的情況更糟糕，即有些人審視當前形勢後決定需要更多供應。我的意思是，我想這更多的是語意上的問題吧。但是，在短短 6 個月內出現如此大的上調幅度，您該如何描述呢？其中有多少是因為價格更優惠、公司現金流充裕並利用這些優勢來提升自身競爭力，又有多少是因為結構性和動態性因素的影響？您如何解讀這是結構性因素還是只是價格更優惠？

We look at a few things. Yes, we dug into this ourselves, too. We looked at what's driving this data. We looked at some cosmic data. So we looked at the stuff like how much data is captured out there. And we capture -- it was like 8 zettabytes of data was captured in 2016, I think, close to 25 zettabytes of data in 2020, and then it goes to like 45 zettabytes of data. So more and more data has been captured. It's gone up a lot, even in your homes, your cars, your industry, your companies. Then we look at the transmission, processing, source of that data we talked about. So when we started to look at root cause, we've seen a lot of this stuff, right? So then you go look at what's going on more close to planet Earth. And so we looked at this and we said, well, what's going on with NAND and DRAM? We split them up. DRAM's up but it's the still not through the roof. It's pretty good but still kind of restrained because a fair amount of these budgets' being spent on NAND. So DRAM price is good. NAND price is good. Supply and demand's okay. So the DRAM, I would say, has probably got a little more upside than downside, frankly, in '18 because this year hasn't been through the roof. It's up from what we thought earlier in the year. And then if you look at NAND, they're selling all the 3D NAND they can build. So it's still pretty good, and I do think it goes to this longer-term trends data in NAND. So then if you look at -- the final thing is, you say, well, how come you guys were low early in the year? And I think it goes to 2 root causes, which, frankly, inflict all of us. One is, I think we're a little bit a prisoner of past thinking. We say, okay, it can only go so high. But it goes to what Gary said earlier. There's different fundamental demand drivers. At a simple level, it was, hey, use these PCs. Then we agreed, okay, in 2010, mobile's coming in. And then -- but now you got all this big data stuff in content, which is going up. That's what's really happened last year. So it's content in the phones, content in the data centers, right? And so when you start to look, what were we inflicted with? We were saying, oh, we're going to roll over. But maybe there's real demand drivers here, number one. And number two, sometimes we listen too closely to our customers on a tactical basis. They have to give us good demand forecast for kind of 6 months out so we could build the tools. Beyond that 6 months, maybe they're a little conservative of what they say to us for various reasons. So I think there are tactical reasons why we're a little too conservative. And I think there are data that shows it's not overbought now, and there are longer-term reasons that make you think this is very sustainable.

我們來看幾個方面。是的，我們也對此進行了深入研究。我們分析了驅動這些數據的因素。我們研究了一些宇宙數據。所以我們研究了諸如目前收集到的資料量之類的問題。我們捕獲的資料量——2016 年大約是 8 澤字節，2020 年接近 25 澤字節，然後就達到了 45 澤字節。因此，越來越多的數據被收集到。它已經大幅上漲，甚至在你的家中、你的汽車、你的產業、你的公司也是如此。然後我們來看看我們剛才討論的資料的傳輸、處理和來源。所以當我們開始探究根本原因時，我們發現了很多這樣的情況，對吧？所以，接下來你就要看看離地球更近的地方發生了什麼事。於是我們研究了一下，然後說，NAND 和 DRAM 到底發生了什麼事？我們把他們分開了。DRAM 容量有所提升，但還沒有達到峰值。雖然還不錯，但仍然有些保守，因為相當一部分預算都花在了 NAND 快閃記憶體上。所以DRAM價格不錯。NAND快閃記憶體價格不錯。供需關係正常。所以坦白說，我認為 DRAM 在 2018 年的上漲空間可能比下跌空間更大，因為今年的價格並沒有飆升。這比我們年初的預期要高。然後，如果你看看 NAND，他們正在銷售所有能生產的 3D NAND。所以情況仍然相當不錯，而且我認為這與 NAND 的長期趨勢數據有關。那麼，如果你看一下──最後一點是，你會問，為什麼你們年初的時候排名很低？我認為這歸根結底有兩個根本原因，坦白說，這兩個原因影響著我們所有人。我覺得，我們在某種程度上受到了過去思維方式的束縛。我們說，好吧，它只能漲到這麼高。但這跟加里之前說的有關。存在不同的根本需求驅動因素。簡單來說，就是：嘿，用這些電腦。然後我們一致認為，好吧，2010年，行動網路時代即將來臨。然後——但現在內容領域出現了所有這些大數據，而且這個數字還在不斷增長。這就是去年實際發生的事情。所以，內容一部分在手機裡，一部分在資料中心裡，對吧？所以當你開始檢視時，我們究竟遭受了什麼？我們當時說，哦，我們要翻身了。但或許這裡有真正的需求驅動因素，這是第一點。第二，有時我們在戰術層面上過度關注客戶的意見。他們需要給我們未來大約 6 個月的準確需求預測，以便我們能夠開發相應的工具。超過這六個月之後，出於各種原因，他們可能對我們說話會比較保守。所以我認為我們採取過於保守的策略是有原因的。我認為有數據顯示目前並未過度買入，而且從長遠來看，也有理由認為這種趨勢是可持續的。

Our next question comes from Patrick Ho of Stifel.

我們的下一個問題來自 Stifel 公司的 Patrick Ho。

Gary or Bob, in terms of the display business for you guys, we do see the longer-term trends of OLED. Can you give a little bit of qualitative commentary on the LCD side of things, how you're benefiting this year as TV sizes do grow larger? Is this also one of those sustainable trends? Or is this just going to be a 1-year or 1.5-year phenomenon as the industry transitions on that front?

Gary 或 Bob，就你們的顯示器業務而言，我們確實看到了 OLED 的長期發展趨勢。您能否就液晶電視方面做一些定性評論，談談隨著電視尺寸越來越大，今年您從中獲得了哪些好處？這也是永續發展趨勢之一嗎？或者這只是產業轉型過程中持續 1 年或 1.5 年的現象？

Yes, I'll start and Gary can jump in. Although Gary's TV aging is a little obsolete at his home base, but I'll start. So if you go look at this year, we're going to be strong in both TVs and mobile. TVs are largely LCD. Mobile is -- the spending is largely for OLED, okay? So if you look at the 2 drivers, in OLED, it's conversion of the phones, which we've talked about. My estimate is likely early in '18, about 37%, 38% of the phones, there'll be capacity to make them OLED even though the demand is there. We think it will be about 55%, as we said earlier in kind of 2020. I think it is 67%, 2021. So really, OLED phone displays is kind of supply constrained, to be honest with you. So that's very sustainable. I think it'll keep going up beyond 67% is my opinion, too, in 2021. I remember everything, we got backlog kind of ships 6 to 9 months later. So you had extra length on the revenue. Then if you go to TVs, what's really driving the TVs is the big TVs. So we said at Analyst Day that through 2020, I think it was, we are tracking 7 Gen 10.5 fabs. We're now up to 9. And so -- and those -- that equipment's just starting to ship, okay? And those fabs, on average, spend more than a Gen 8.5. I think they spend about $2.2 billion where it's like $1.2 billion, I think, on a Gen 8.5. So this big TV stuff's got legs for a while. And the capital intensity for these bigger fabs is good and our position's real good.

好的，我先開始，加里可以接著說。雖然加里家裡的電視有點過時了，但我還是會開始看。所以，展望今年，我們在電視和行動裝置領域都將表現出色。電視機多是液晶電視。行動裝置的支出主要集中在OLED螢幕上，懂嗎？所以，如果你看一下 OLED 中的兩個驅動因素，那就是手機的轉換，我們已經討論過了。我估計到 2018 年初，大約 37% 到 38% 的手機將具備 OLED 螢幕的產能，即使市場需求已經存在。我們認為大概會是 55%，就像我們在 2020 年早些時候說的那樣。我認為是 67%，2021 年。說實話，OLED手機顯示器的供應確實比較有限。所以這非常可持續。我認為2021年這個數字還會繼續上升，超過67%。我記得所有的事情，我們積壓了一些船隻，大概過了 6 到 9 個月才交付。所以你的收入部分有額外的篇幅。然後，如果你看看電視，真正推動電視發展的是大尺寸電視。因此，我們在分析師日上表示，到 2020 年，我們將追蹤 7 個第 10.5 代晶圓廠。現在已經達到 9 台了。而且——那些——那些設備才剛開始出貨，好嗎？而這些晶圓廠平均花費的時間比第 8.5 代還要多。我認為他們在第八代半主機上花費了大約 22 億美元，而第八代半主機則花費了大約 12 億美元。所以，這種大型電視節目還會持續一段時間。這些大型晶圓廠的資本密集度很好，我們的處境非常有利。

Our next question comes from Weston Twigg of Pacific Crest Securities.

我們的下一個問題來自太平洋證券公司的韋斯頓·特威格。

You mentioned earlier on the call regarding bit density and 3D NAND from generation to generation being slower than the planar NAND conversion. So just wondering, could you give us an idea on how much more fab capacity might be needed annually to drive, say, 40% bit growth and what the incremental opportunity can be for AMAT?

您之前在電話會議中提到過位元密度和 3D NAND 的世代轉換速度比平面 NAND 慢。所以我想問一下，為了實現例如 40% 的比特成長，每年可能需要增加多少晶圓廠產能？ AMAT 又能從中獲得多少增量機會？

Sure. Some of this goes to what I said earlier. So we see, and I think we're a little bit on the low side sometimes, that NAND bit growth is going to be probably in the high 30s or something like that. Now last year was much higher. If you look at content in phones, it was up like -- the data we got from an outside service provider was 57%. So there are indications that we're on the low side on some of these things. Plus we're not sure we've captured all the movement to hard disk drives. So I'd say I'm more on the over camp in that number than the under. So then if you go look at it, as I said earlier, the 750,000 wafer starts by the end of this year, we think that they're going to have to continue to spend in dollars, WFE content, similar to this year for a number of years. Now if they spend on greenfield or they spend on conversions, we're kind of agnostic from a revenue point of view. But we think the total spending is similar to this year for a number of years.

當然。這其中有些內容和我之前說的有關。所以我們看到，而且我認為我們有時估計得有點低，NAND 位元的成長可能在 30 多位左右。去年的數值要高得多。如果你看一下手機中的內容，它就上升了——我們從外部服務提供者獲得的數據是 57%。所以有跡象表明，我們在某些​​方面處於較低水平。此外，我們也不確定是否已經捕捉到所有向硬碟傳輸的資料。所以我覺得我更傾向於大數而不是小數。所以，如果你去看一下，正如我之前所說，75萬片晶圓的生產計劃從今年年底開始，我們認為他們將不得不繼續以美元的形式在晶圓前端組件（WFE）內容上投入與今年類似的資金，這種情況會持續好幾年。現在，無論他們是投資新建項目還是投資現有項目，從收入的角度來看，我們都持中立態度。但我們認為總支出與今年的情況類似，這種情況將持續數年。

Our next question comes from Craig Ellis of B. Riley.

我們的下一個問題來自 B. Riley 公司的 Craig Ellis。

I wanted to follow up on the comments that you had, Bob, that there was some project-related R&D spending in the outlooks numbers. The question is, to what extent is that more of a near-term micro opportunity that the company is using versus something that may be more longer-term and structural, either because you're viewing the market opportunity differently over the next few years and are chasing some additional existing SAM or as you look at different opportunities, chasing some new SAM that's emerged over the last 3 to 6 months?

鮑勃，我想就你之前提到的展望數據中包含一些與專案相關的研發支出進行後續說明。問題是，該公司利用的究竟是近期的小機會，還是更長期、更具結構性的機會？是因為您對未來幾年的市場機會有不同的看法，並正在追逐一些現有的額外銷售和市場機會，還是因為您正在尋找不同的機會，並正在追逐過去 3 到 6 個月中出現的新銷售和市場機會？

Yes. I think increasing the R&D spend was a wise decision, frankly. I think that when we showed you the model -- if you go back to 2013 when I first got here, we showed the first model. Our base case model was kind of a $30 billion base case. And then we did a $33.5 billion. Last year, it was $34.5 billion, I think. If I had to do a base case model for the industry, it's probably -- it's going to be north of that. I don't want to presell Analyst Day in September, but it's obviously north of that. The second thing is our position's a lot stronger. We used to be 18% of WFE, and I think last year, we were like 22% or something. We're still going up. Our model is to hit the 25.5%, we're comfortable with that. So if you look at Applied and then display, the magnitude of the change is big or bigger. It was an $8 billion spending environment when we set up, and now it's kind of twice that. Our product pipeline's good. So I think the wise decision is to continue to invest in the opportunities. Now customers are coming to us more and more because we've become even more innovative than we were. So if you look at the range of products we're doing, the innovation in terms of the pipeline, really good. So we're getting lots of pull from customers to develop new products. They're taking more and more demo tools from us. We're getting more and more applications. So I think it's money well spent. I think it'll probably trend up. If you look at the model, probably a little bit of risk that the OpEx is higher than the model, but OpEx as a percentage of sales is down 10 points from 2013 by the end of this year. If you look at operating margins, they're up significantly and will probably beat the model. The upside's lower than the downside on the revenue gross margin, operating margins in the model.

是的。坦白說，我認為增加研發投入是個明智的決定。我認為，當我們向您展示模型時——如果您回顧一下我剛來這裡的 2013 年，我們展示了第一個模型。我們的基本車型設定為 300 億美元。然後我們又賺了335億美元。我記得去年是345億美元。如果讓我為這個行業做一個基準模型，那很可能——它會高於這個數字。我不想提前預告九月份的分析師日，但顯然它比那重要得多。第二點是，我們的地位更加穩固了。我們以前佔 WFE 的 18%，我想去年我們大概佔了 22% 左右。我們仍在上升。我們的模型目標是達到 25.5%，我們對此感到滿意。所以，如果你查看 Applied，然後進行顯示，你會發現變化的幅度很大或更大。我們創立公司時，市場支出為 80 億美元，現在差不多是當時的兩倍。我們的產品線運作良好。所以我認為明智的做法是繼續投資這些機會。現在，越來越多的顧客慕名而來，因為我們變得比以前更具創新性了。所以，如果你看看我們正在開發的產品範圍，以及我們在產品線方面的創新，你會發現真的非常出色。因此，我們從客戶那裡獲得了大量開發新產品的需求。他們正在從我們這裡奪走越來越多的演示工具。我們收到的申請越來越多。所以我認為這筆錢花得很值得。我認為它可能會呈上升趨勢。從模型來看，營運支出可能略高於模型預測值，但到今年底，營運支出佔銷售額的百分比將比 2013 年下降 10 個百分點。如果看營業利潤率，就會發現它們大幅成長，而且很可能會超過預期。模型中，營收毛利率和營業利益率的上漲空間低於下跌空間。

In terms of where we're focused, the strategy for us has been inflection-focused innovation. There are really big inflections that are happening at 10- and 7-nanometer. When you're building these AI chips that are as big as the physical limits, there are a lot of technology challenges. We talked about PVD growing this last year to enable the interconnect -- new interconnect technology for lower-power devices. You've got high-performance memory chips also where the PVD is growing for us. And in the -- and the memory area, the ability to scale 3D NAND, is there big technical challenges there for our customers. And it's really all about etch, deposition. We've got very innovative new materials. The etch area, we've grown our market share significantly over the last few years. Great products, some of the best products I've ever seen in my life. Sym3 is the fastest-growing product in the history of the company. The Selectra product, where we have 1,000 to 1 selectivity. These are enabling customers to build devices that were never possible before and build them in different ways, scale these new technologies, build the logic devices at the physical limits or -- and the same thing is true in display. For organic LED mobile displays, there are technology challenges that are facing customers that want to ramp new factories for those new types of devices. So for me, personally, we've -- I look at Applied Materials, our competencies, technologies, talent, is really unbelievable and sets us apart from any other company. And we're really in a sweet spot of all of these major inflections. So we've certainly moved a lot of money within the company over the last few years. The OpEx as a percentage of revenue has been going down. But we're going to invest to enable these inflections and drive sustainable growth for the company. The opportunities for us have never been better.

就我們的關注重點而言，我們的策略是以轉捩點為中心的創新。在 10 奈米和 7 奈米處，確實存在著很大的轉折點。當你製造出體積接近物理極限的人工智慧晶片時，會面臨許多技術挑戰。我們討論了 PVD ​​技術在去年的發展，以實現互連——一種用於低功耗設備的新型互連技術。我們這裡也有高效能的記憶體晶片，PVD 技術也在不斷發展。在儲存領域，3D NAND 的擴展能力對我們的客戶來說是一個巨大的技術挑戰。其實這一切都與蝕刻和沈積有關。我們擁有非常創新的新材料。在蝕刻領域，我們在過去幾年內市佔率顯著成長。非常棒的產品，是我這輩子見過的最好的產品之一。Sym3 是公司史上成長速度最快的產品。Selectra 產品具有 1,000 比 1 的選擇性。這些技術使客戶能夠製造以前不可能製造的設備，並以不同的方式製造這些設備，擴展這些新技術，在物理極限處製造邏輯裝置——顯示器也是如此。對於有機發光二極體 (OLED) 行動顯示器而言，希望為這類新型設備建立新工廠的客戶面臨技術挑戰。所以就我個人而言，我審視應用材料公司，我們的能力、技術和人才真的令人難以置信，這使我們與其他任何公司都截然不同。我們現在正處於所有這些重大轉折點的最佳時期。所以，在過去幾年裡，我們公司內部確實進行了大量資金轉移。營運支出佔收入的比例一直在下降。但我們將進行投資，以促成這些轉折點，並推動公司的永續成長。我們面臨的機會從未如此好。

Our next question comes from Edwin Mok of Needham.

我們的下一個問題來自尼德姆的埃德溫·莫克。

Just want to circle back on China. You guys mentioned you expect a pretty significant pickup in spending in China in 2018. Maybe if I -- we focus on the memory side. We've seen like some of these customer announce pretty aggressive road map for the 3D NAND technology. Just wondering, is this bigger spending in '18 predicated on those customer hitting those targets or rolling out those devices and if they have issues rolling out the devices that delay the spending that you expect in '18?

想再談談中國。你們提到預計2018年中國消費支出將出現相當大的成長。或許我可以──我們專注於記憶方面。我們看到一些客戶公佈了相當積極的 3D NAND 技術發展路線圖。我想知道，2018 年更大的支出是否取決於這些客戶是否達到目標或推出這些設備，以及如果他們在推出設備方面遇到問題，是否會延遲您預期的 2018 年支出？

We have a range of forecasts for China. So as I said earlier, it's one of our strongest regions in both semiconductor and display. We have very, very deep relationships with many of these customers. Right now, what we believe for 2018 is that the business will be up meaningfully from 2017. But frankly, that's also at the most likely and low risk end of the forecast. There's a higher range there that would be going up at a much faster pace. We're looking at early indicators for all of those new projects, but I think right now, we're pretty confident that the increase in China in 2018 will happen. Maybe it's $1 billion, $1.5 billion in terms of total wafer fab equipment. So that we have pretty high confidence in terms of the engagements or the information we're getting from all of those customers. There is upside potential, but that's our current view.

我們對中國經濟有多種預測。正如我之前所說，這是我們在半導體和顯示器領域最強大的地區之一。我們與其中許多客戶都建立了非常非常深厚的關係。目前我們認為，2018 年的業務將比 2017 年有顯著成長。但坦白說，這也只是預測中最有可能發生且風險最低的情況。那裡還有更高的範圍，而且上漲速度會更快。我們正在觀察所有這些新項目的早期指標，但我認為目前我們相當有信心，2018 年中國的成長將會發生。或許是價值 10 億美元，或是 15 億美元的晶圓製造設備。因此，我們對從所有這些客戶那裡獲得的互動或資訊都相當有信心。雖然有上漲潛力，但這只是我們目前的看法。

Our next question comes from Sidney Ho of Deutsche Bank.

下一個問題來自德意志銀行的何世傑。

Going back to the question on capital returns, your free cash flow as a percentage of revenue has come up quite a bit over the past 5 years. I think it was averaging like 15%, and now it was more like 20%-plus. Your dividend yield has come down quite a bit as well just because your stock has done so well. But with the long-term debt you raised recently, I know you explained that earlier in the call, but just curious, are there any changes to your philosophy in capital returns? I guess specifically, why not raise your dividend and maybe spend a little less on buybacks and -- given dividend hasn't gone up for a number of years? Or are you saving some dry powder for future M&A?

回到資本回報的問題，在過去 5 年裡，自由現金流佔收入的百分比經常被提及。我認為之前平均大概是 15%，現在已經超過 20% 了。由於您的股票表現非常出色，您的股息殖利率也大幅下降了。但關於您最近籌集的長期債務，我知道您在之前的電話會議中已經解釋過了，但我只是好奇，您在資本回報方面的理念是否有任何變化？具體來說，為什麼不提高股息，減少一些股票回購支出呢？畢竟股息已經好幾年沒有成長了。還是你是在為未來的併購活動積蓄資金？

I think we'll probably -- I think we'll continue to return -- the total of all cash to investors will be very, very healthy. I think that the mix will probably morph over time to dividends. We haven't made a firm commitment but I think it will happen. I think the 2 things that I'm kind of watching is, one, I think I'd like to see tax policy because dividend's a firm, fixed commitment. As soon as you make it, then you got to hit it every quarter. And you really have to lean into where you're going to end up, what's your end stake, because people look at the yield, not what -- did you raise it $0.02 a quarter. So we have to commit to a dividend increase over time that gets to effective yield. And with the stock going up, that cash commitment has gone up. So I'm willing to do that, but I'd like to see clarity on the tax policy before I make that fixed commitment to an increase in yield.

我認為我們可能會——我認為我們會繼續——向投資者返還的現金總額將非常非常健康。我認為隨著時間的推移，這種組合可能會演變成分紅。我們還沒有做出最終承諾，但我認為這件事會發生。我覺得我主要關注兩件事，第一，我想看看稅收政策，因為股利是一項確定的、固定的承諾。一旦你成功了，你就必須每節都命中目標。你真的需要認真考慮你的最終目標是什麼，你的最終利益是什麼，因為人們關注的是收益率，而不是——你每季是否提高了 0.02 美元。因此，我們必須承諾隨著時間的推移提高股息，以達到實際收益率。隨著股價上漲，現金投入也隨之增加。所以我願意這樣做，但在我做出提高收益率的固定承諾之前，我希望看到稅收政策的明確性。

Thanks, Sydney, for the question. And [Latiff], time check. I just want to see if there's anyone in the queue still.

謝謝悉尼的提問。還有[拉蒂夫]，時間檢查。我只是想看看是否還有人在排隊。

Yes, sir, we do have one more question in queue.

是的，先生，我們還有一個問題待處理。

Okay. Thank you. We'll take that question and then we'll bring it back to me. Thanks.

好的。謝謝。我們會把這個問題記下來，然後再回饋給我。謝謝。

That question comes from Harlan Sur of JPMorgan.

這個問題來自摩根大通的哈蘭‧蘇爾。

You guys talked a lot about some of the trends driving logic and foundry, AI, deep learning, VR, data center. And it's interesting because these drivers have some of the biggest chip sizes in the industry, right? In videos, the latest deep learning chip has 18 billion transistors on a single piece of silicon. Broadcom's latest data center switching chip has like 7 billion transistors. These are huge chips, right? My point is that each of these units is consuming more silicon but they're also requiring more leading-edge complex manufacturing. So this is great for capital intensity trends. It's great for equipment business. But frankly, it's a nightmare from a yield perspective. So help us understand the trends you're seeing in your metrology and inspection business and how you guys are helping your customers improve yields. You guys gained share in this segment last year. How do you think this segment grows relative to your overall semi systems business this year?

你們談了很多關於邏輯和晶圓製造、人工智慧、深度學習、虛擬實境、資料中心等發展趨勢。有趣的是，這些驅動晶片擁有業內最大的晶片尺寸之一，對吧？影片顯示，最新的深度學習晶片在一塊矽片上整合了 180 億個電晶體。博通公司最新推出的資料中心交換晶片擁有約70億個電晶體。這些晶片體積很大，對吧？我的觀點是，這些單元雖然消耗的矽更多，但它們也需要更先進的複雜製造流程。所以這對資本密集趨勢來說是個好消息。這對設備產業來說非常棒。但坦白說，從產量角度來看，這簡直是一場惡夢。請幫助我們了解您在計量和檢測業務中觀察到的趨勢，以及您如何幫助客戶提高產量。你們去年在這個細分市場獲得了市場份額。您認為今年該業務板塊相對於貴公司整體半導體系統業務的成長情況如何？

Okay. Thanks for the question, Harlan. Yes. Again, on the large logic chips that you talked about, we actually had the NVIDIA CEO here just a few months ago. And one of the questions was, really, what does all of this mean to us? And he talked about physical, the chip's as big as they can physically build them. And actually, he also said, a million times more memory. So all of those things are obviously positive for Applied Materials. In the inspection share, we're -- or inspection business, we're growing a significant amount. We had record revenue in '16. We're on track for record revenue in '17. And if you look at our e-beam business, which is our largest part of PDC, which includes e-beam inspection, e-beam review and CD-SEM, we're going to be up in '17 more than 50% versus '15. We have very, very strong technology position with world-class electron optics and very strong customer pull for e-beam products in logic, foundry and repeat orders for the PROVision in memory with some large customers. So very, very strong position. We have great technology, very strong customer pull, and we believe that we're going to continue the growth that we've seen over the last couple of years in our PDC business.

好的。謝謝你的提問，哈蘭。是的。再說一遍，關於你提到的大型邏輯晶片，我們幾個月前確實邀請過英偉達的執行長來這裡。其中一個問題是，這一切對我們來說究竟意味著什麼？他還談到了物理方面，晶片的尺寸已經達到了物理上能夠製造的最大尺寸。而且他還說，實際上，記憶體容量是原來的一百萬倍。所以所有這些顯然對應用材料公司來說都是利好消息。在檢驗業務領域，我們的市佔率正在顯著成長。2016年我們的營收創下了歷史新高。我們預計在 2017 年創下營收紀錄。如果你看看我們的電子束業務，這是我們PDC最大的組成部分，包括電子束檢測、電子束複核和CD-SEM，那麼我們2017年的業務量將比2015年增長50%以上。我們在技術上擁有非常非常強大的優勢，擁有世界一流的電子光學技術，並且在邏輯電路、代工製造以及記憶體 PROVision 的重複訂單方面，擁有非常強大的客戶需求，其中一些客戶規模很大。所以，地位非常非常穩固。我們擁有強大的技術、非常強勁的客戶需求，我們相信，我們將繼續保持過去幾年在PDC業務方面所取得的成長勢頭。

Great. Well, thanks, Harlan, for the question. And Bob, would you like to add anything else before we close the call today?

偉大的。謝謝你的提問，哈蘭。鮑勃，在今天的電話會議結束之前，你還有什麼要補充的嗎？

Sure. Thanks, Mike. One of Gary's favorite expressions around here is innovation's about connecting the dots. Let me see if I connect a few dots that I -- we believe and I hope you heard today. One, we believe the wafer fab equipment market is sustainably higher and less volatile. Also, display is higher, and for Applied, it's sustainably a better market because there are more technology inflections and because we're growing our served market. Second, Applied's position in the market is sustainably stronger. And we are executing better and better. And third, we're generating more free cash flow and returning the excess to our shareholders. Speaking of free cash flow, one of your own interesting note comparing Applied Materials to some of the top names in the industrial sector. Relative to the average of the companies, Applied has higher revenue and profit growth along with higher ROIC and free cash flow margins. Compared to these companies, I believe we're being discounted for being more cyclical even as we become demonstrably less cyclical. I believe that over time, we'll be viewed and valued in a new way. So thank you for your time today. And we look forward to seeing many of you in person over the next few weeks.

當然。謝謝你，麥克。加里最喜歡說的一句話是：創新就是把各點連結起來。讓我看看我能否把今天我們認為並且希望你們也聽到的幾個要點連結起來。第一，我們認為晶圓製造設備市場將持續保持在較高水平，波動性也會降低。此外，顯示器價格更高，對於應用材料公司而言，這是一個更永續的更好市場，因為技術變革更多，而且我們正在擴大服務市場。其次，Applied 在市場上的地位更加穩固。我們的執行力也越來越強。第三，我們正在創造更多自由現金流，並將多餘的資金回饋給股東。說到自由現金流，您自己有一篇很有意思的文章，將應用材料公司與工業領域的一些頂尖公司進行了比較。與公司平均值相比，Applied 的營收和利潤成長更高，同時其投資報酬率和自由現金流利潤率也更高。與這些公司相比，我認為我們因為週期性更強而被低估了，儘管我們已經明顯地降低了週期性。我相信隨著時間的推移，我們會以全新的方式被看待和重視。非常感謝您今天抽出時間。我們期待在接下來的幾週內與大家見面。

Well, great. Thanks, Bob. And we'd like to thank everybody for joining us this afternoon. A replay of the call is going to be available on the website beginning at 5 p.m. Pacific Time today. And we thank you for your continued interest in Applied Materials.

太好了。謝謝你，鮑伯。感謝各位今天下午蒞臨。本次電話會議的錄音回放將於下午5點開始在網站上提供。今天太平洋時間。感謝您一直以來對應用材料公司的關注。

Ladies and gentlemen, you may disconnect your lines at this time. Have a wonderful day.

女士們、先生們，現在可以斷開線路了。祝您有美好的一天。