Applied Materials Faces China Headwinds But Sees Growth Ahead in US and Europe
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China remains Applied Materials' largest region at 27% of revenue in 2023, but growth slowed to -0.1% amid geopolitical risks. Q4 showed strong 121.6% growth in China sales, but expected to moderate.
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Robust revenue growth seen in US at 29.1% and Europe at 28.6% in 2023, outperforming all other regions. Driven by fab expansions by Samsung, TSMC, Intel.
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Project 15.9% total revenue growth in 2024, accelerating to 19.9% by 2026, fueled by faster expansion in US and Europe. But conservative -1.9% China growth outlook.
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Lost top spot in semiconductor equipment market share to ASML in 2023, but maintained 2nd place. Market share forecast to strengthen to 22% by 2026 on R&D focus.
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Potential downside risk if faces US sanctions for allegedly evading export controls to China. But valuations still attractive with 13% upside.