AMAT Reports Sluggish Display Equipment Revenue in Q418 and Outlooks Slowing Shipments in 1H19
February 18, 2019
Applied Materials (AMAT), a leading toolmaker for semiconductors and displays released their Q1, 2019 earnings results. The company has enjoyed strong revenue and earnings growth over the past few years due to the growth in the number of Gen 6 OLED fab and Gen 10.5 LCD fab capacity. In 2018, the growth reached a peak and now it is expected to drop as new fab commitments and equipment purchases are being delayed or cancelled due to significant excess capacity. AMAT will be impacted by the slower than expected equipment purchases for Gen 10.5 fabs and the cancellation of Foxconn’s Wisconsin and HKG’s Gen 10.5 fab. For OLEDs, Samsung has not committed to a timeframe on their huge A5 Gen 6, nor their QD/OLED hybrid Gen 8.5 nor has LG committed to their Gen 10.5. In China, here has been a marked slowdown in equipment purchases, as funding is taking longer than normal.
Here is CEO, Michael Sullivan’s comments about the effect of the display industry on AMAT:
AMAT mentioned of rigid OLED getting a foothold seems misplaced as even Samsung is rethinking the product line and AMAT’s comment that the initial flexible products are nearing release, refers to foldable, since flexible is already mainstream.