Digitalisation to help drive Applied Materials' Singapore operations

Singapore

ABOUT half of Nasdaq-listed Applied Materials' semiconductor output comes from its advanced manufacturing operations in Singapore alone.

And rising industry digitalisation is sure to help fuel demand for the device, said Brian Tan, the company's vice-president for China and South-east Asia.

Pharmaceuticals and transport are some sectors where he sees potential growth amid larger amounts of data and higher computer processing needs. This is on top of demand for handsets and smart devices, which Mr Tan expects will stay "a very strong foundational piece" for the industry.

He did concede : "It may not be as easy as just a straight-line projection at this point in time, because much of the growth that we are seeing - many of these technologies today, and the capacity - is actually shared over many platforms."

Still, he said: "When you talk about revenue mix, I think a lot of these new areas are key drivers. One can imagine that applications or the capacity going into these areas will grow over time."

Mr Tan added: "One of the few inflections is going to be around packaging. Just to give you a sense, we make the equipment that makes the chip, but once the chip is made, it's important to package it in a form factor that could go into a TV or an iPhone.

"That final step, packaging, it's a critical inflection that's enabling all this growth. . . I'm happy to share that all of the packaging research and development is done out of Singapore today."

Applied Materials reported net income of US$3.43 billion in 2017 on sales of US$14.5 billion - up from US$1.72 billion in income the year before - with Samsung Electronics and Taiwan Semiconductor Manufacturing among its top customers.

"All three of our major business segments - semiconductor, display and service - remain on track to deliver strong double-digit growth in fiscal 2018 as per our latest earnings result," he said. The latest second-quarter results showed earnings up by 37 per cent on the previous year, to US$1.13 billion for the three months to April 29.

"I think the recent market is going to be very strong," Mr Tan said, adding that Applied Materials expects the overall wafer fabrication equipment market to be worth US$90 billion to US$100 billion through end-2019. "That's a good spike, and we think that's just the beginning of a new generation."

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Amendment note: An earlier version of this story incorrectly said that Applied Materials' order book value is US$90 billion to US$100 billion. Applied Materials has since corrected its statement and said that those figures refer to the overall wafer fabrication equipment market. The article above has been revised to reflect this.