01—Abstract
Summary
Summary of the 10-K filed December 10, 2010. Cited figures are marked; the original filing is the authoritative source.
Applied Materials Inc. (AMAT) demonstrated a significant recovery in fiscal year 2010, with net sales increasing by 90% to $9.55 billiona, up from $5.01 billion in fiscal year 2009.
This rebound was driven by a strong resurgence in demand across its core semiconductor and display equipment segments, reflecting a broader economic recovery. The company saw a substantial increase in new orders, more than doubling to $10.25 billionb, indicating robust future sales potential. Despite the positive top-line growth, the company faced challenges in its Energy and Environmental Solutions segment, particularly with its thin-film solar business, leading to significant restructuring charges and inventory write-downs.
The acquisition of Semitool in late 2009 strengthened its Silicon Systems Group. Applied Materials continues to invest heavily in R&D, focusing on next-generation chip technologies like 22nm and below designs, and advanced packaging solutions like through-silicon vias (TSVs).
02—Key points
Key Highlights
- Net sales surged 90% year-over-year to $9.55 billion in FY2010, recovering strongly from the prior year's downturn.
- New orders more than doubled to $10.25 billion, signaling a robust demand pipeline for semiconductor equipment.
- The Silicon Systems Group (SSG) segment experienced a significant rebound, with net sales increasing by 171% to $5.30 billion.
- The company acquired Semitool Inc. in December 2009, enhancing its offerings in electrochemical plating and wafer surface preparation for advanced packaging.
- Applied Materials continued its commitment to innovation with substantial R&D investments, focusing on emerging technologies like 22nm chip designs and 3D ICs.
- Restructuring charges of $486 million impacted the Energy and Environmental Solutions segment, largely due to challenges in the thin-film solar market.
- The company maintained a strong financial position, with cash, cash equivalents, and investments increasing to $3.89 billion, while repurchasing $350 million in stock.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Applied Materials kept $0.10.
- Revenue$9.55B100.0%
- Cost of revenue−$5.83B61.1%
- Gross profit$3.71B38.9%
- Operating costs−$2.33B24.4%
- Operating income$1.38B14.5%
- Interest, other & tax−$446.0M4.7%
- Net income$938.0M9.8%
Where FY2010 revenue went
$9.55B- Cost of revenue: $5.83B, 61% of revenue
- Net income: $938.0M, 9.8% of revenue
- R&D: $1.14B, 12% of revenue
- SG&A: $942.0M, 9.9% of revenue
- Other operating costs: $246.0M, 2.6% of revenue
- Interest, other & tax: $446.0M, 4.7% of revenue
Kept 9.8% as net incomeNet income $938.0M · 9.8%Other operating costs $246.0M · 2.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed December 10, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $9.55B$5.01B | +90.4% |
| Cost of Revenue | $5.83B$3.58B | +62.8% |
| Gross Profit | $3.71B$1.43B | +159.6% |
| R&D Expenses | $1.14B$934.00M | +22.4% |
| SG&A Expenses | $942.00M$735.00M | +28.2% |
| Operating Expenses | $2.33B$1.82B | +27.7% |
| Operating Income | $1.38B-$394.00M | +451.3% |
| Interest Expense | $21.00M$21.00M | 0.0% |
| Net Income | $938.00M-$305.00M | +407.5% |
| EPS (Basic) | $0.70$-0.23 | +404.3% |
| EPS (Diluted) | $0.70$-0.23 | +404.3% |
| Shares Outstanding (Basic) | 1.34B1.33B | +0.5% |
| Shares Outstanding (Diluted) | 1.35B1.33B | +1.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of Applied Materials' financial recovery in fiscal year 2010?
The primary driver was the significant increase in demand for semiconductor manufacturing equipment, fueled by a broader economic recovery and increased capital spending by semiconductor manufacturers, particularly in memory and foundry segments. The display segment also contributed to the rebound.
What challenges did Applied Materials face in fiscal year 2010?
The company faced significant challenges in its Energy and Environmental Solutions segment, specifically within its thin-film solar business. This led to restructuring actions, including workforce reductions and inventory write-downs totaling $486 million, due to adverse market conditions.
How did the acquisition of Semitool impact the company?
The acquisition of Semitool, a leader in electrochemical plating and wafer surface preparation, significantly strengthened Applied Materials' Silicon Systems Group segment, particularly its offerings for advanced chip packaging solutions like through-silicon vias (TSVs).
What is the company's focus for research and development (R&D)?
Applied Materials is heavily investing in R&D to support next-generation technologies. Key areas include enabling chip designs for 22nm and below geometries, high-k/metal gate technologies, double patterning, and advanced packaging solutions like through-silicon vias (TSVs) for 3D ICs.
06—Continue