The company is targeting non-GAAP adjusted earnings per share (EPS) of $5.08 for fiscal 2020 based on a $45 billion wafer fab equipment (WFE) market with increases in market share, gross margin, R&D investment and operating profit.
“Our markets are strong and getting stronger. New technology inflections like A.I. and big data will increase demand for high-performance semiconductor processing and storage,” said Gary Dickerson, president and CEO of Applied Materials. “With the industry’s broadest and most innovative technologies, Applied Materials helps accelerate customer roadmaps by enabling chips and displays to be built in entirely new ways.”
A.I. and big data are sparking a renaissance in chip design with new types of processors in development by a larger set of companies. More logic and DRAM capacity will be needed to process the increase in data, along with more NAND capacity for faster processing and storage. Based on this and the continued growth of silicon content in smartphones, Applied expects WFE spending in 2017 and 2018 combined to be $90 billion.
In Services, Applied expects to deliver compound annual growth of 15% for the next three years to reach $4.5 billion in revenue by 2020 driven by continued strong demand for its equipment, higher process complexity and greater demand for comprehensive service agreements. In Display, Applied expects 23% in compound annual growth over the same period, led by increases in consumer demand for larger, more life-like displays in the TV and mobile device markets.
Applied also announced a new share repurchase program authorizing up to an additional $3 billion in repurchases.