Applied Materials (AMAT) 10-K risk factor changes: FY2024 vs FY2023

We are a supplier to the global semiconductor and display and related industries, which historically have been cyclical and are subject to volatility [removed: and sudden changes] in customer demand.

Factors that impact demand for our products and services include technology inflections and advances in fabrication processes, new and emerging technologies and market drivers, [added: such as demand for high-bandwidth memory and other forms of advanced packaging and technologies related to artificial intelligence and data center computing,] production capacity relative to demand for [added: semiconductor] chips and [removed: display technologies,] [added: electronic devices,] end-user demand, customers’ capacity utilization, production volumes, access to affordable capital, business and consumer buying patterns and general economic and political conditions.

Uncertain or adverse economic and business conditions, including uncertainties and volatility in the financial markets, national debt, fiscal or monetary concerns, [removed: rising] inflation and [added: changes in] interest rates, bank failures, and economic recession, could materially and adversely impact our operating results.

Markets for [removed: semiconductors] [added: our semiconductor] and [removed: displays] [added: display equipment and services] depend largely on business and consumer spending and demand for [added: semiconductor chips and] electronic [removed: products.][added: devices.]

Uncertain or adverse economic and business conditions could result in decreases in [added: business and] consumer spending and demand.

[removed: Sudden increases] [added: Increases] in demand for [added: semiconductor chips and] electronic [removed: products] [added: devices] have caused, and may in the future cause, a shortage of parts and materials needed to manufacture our products.

Economic and industry uncertainty may impair the ability of suppliers to deliver parts and negatively affect our ability to manage operations and deliver [removed: our] products.

If we do not appropriately manage our business operations [removed: in response to changing economic and industry conditions,] it could have a material and adverse impact on our business performance and financial condition.

The risks to our investment portfolio may be exacerbated if financial market conditions deteriorate due to rising inflation, rising interest rates, bank failures or economic recession [removed: and, as a result,] [added: and] the value and liquidity of the investment portfolio and returns on pension [removed: assets,] [added: assets] could be negatively impacted and lead to impairment charges.

We also maintain cash balances in various bank [added: accounts globally to fund normal operations.]

We have product development, engineering, manufacturing, sales and other operations [removed: in] [added: distributed throughout] many countries, and some of our business activities are concentrated in certain geographic areas.

In fiscal [removed: 2023,] [added: 2024,] approximately [removed: 85%] [added: 86%] of our net [removed: sales were] [added: revenue was] to customers in regions outside the United States.

- uncertain [added: or adverse] global economic, political and business conditions and demand;

- positions taken by governmental agencies regarding [removed: possible] national, commercial or security issues posed by the development, sale or export of certain [added: products, technologies and] raw materials, [removed: products] [added: including critical materials] and [removed: technologies;][added: critical minerals;]

- political instability, [removed: natural disasters, regional or global health epidemics,] social unrest, terrorism, acts of war or other geopolitical turmoil, [removed: or cybersecurity incidents] [added: such as the conflict] in [added: the Middle East, in] locations where we have operations, suppliers or sales, or that may influence the value chain of the industries we serve;

- the availability [removed: of,] [added: of raw materials, including critical materials] and [added: critical minerals, and] increases and volatility [removed: of, raw materials,] [added: of] commodity, energy and shipping costs;

- impacts of [removed: climate change] [added: natural disasters and extreme and chronic weather events] on our operations and those of our customers and [removed: suppliers;][added: suppliers, which may be exacerbated by climate change;]

Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the competitiveness of our products [added: and services] relative to local and global competitors.

[removed: We sell a significant] [added: A] majority of our products [removed: into] [added: and services are delivered to customers in] jurisdictions outside of the United States, including China, Taiwan, Korea and Japan.

There is inherent risk, based on the complex relationships among the United States and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export [removed: regulations, in particular, with respect to those affecting] [added: regulations that affect] the semiconductor industry.

The United States and other countries have imposed and may continue to impose new trade restrictions and export regulations, [removed: and] have levied tariffs and taxes on certain [added: goods, and could significantly increase tariffs on a broad array of] goods.

Trade restrictions and export regulations, or increases in tariffs and additional taxes, including any retaliatory measures, can negatively impact end-user demand and customer investment in [removed: manufacturing] [added: semiconductor] equipment, increase our supply chain complexity and our manufacturing costs, decrease margins, reduce the competitiveness of our products, or restrict our ability to sell products, provide services or purchase necessary equipment and supplies, any or all of which could have a material and adverse effect on our business, results of operations, or financial condition.

[removed: In] [added: Over] the past [removed: two] [added: several] years, the U.S. government announced [removed: new] [added: additional] export regulations for U.S. semiconductor technology sold in China, including wafer fabrication equipment and related parts and services, [added: with disparate impact on companies in different jurisdictions,] which have limited the market for certain of our [removed: products,] [added: products and services,] adversely impacted our revenues, and increased our exposure to foreign [added: and Chinese domestic] competition.

The U.S. Department of Commerce has promulgated [removed: rules and] regulations expanding export license requirements for U.S. companies that sell certain products [added: or provide certain services] to entities in China whose actions or functions are intended to support military end uses, eliminated certain export license exceptions that applied to exports of certain items to China, added certain Chinese companies to its “Entity [removed: List” and “Unverified] List,” making those companies subject to additional licensing requirements, and expanded licensing requirements for exports to China of items for use in the development or production of integrated circuits and certain technologies.

These [removed: rules and] regulations require us to obtain additional export licenses to supply certain of our products or provide services to certain customers in China.

Obtaining export licenses may be [removed: difficult, costly] [added: difficult] and time-consuming, and there is no assurance we will be issued licenses on a timely basis or at all.

Our inability to obtain such licenses could limit our [removed: markets] [added: sales] in China, may cause us to be displaced by foreign [removed: businesses] and [removed: competitors] [added: Chinese domestic companies] and adversely affect our results of operations.

The implementation and interpretation of these complex rules and other regulatory actions taken by the U.S. government [removed: is] [added: are] uncertain and [removed: evolving,] [added: evolving] and may make it more challenging for us to manage our operations and forecast our operating results.

The U.S. and other [removed: government agencies] [added: governments] may promulgate new or additional export licensing or other requirements that have the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including China.

The U.S. government may also continue to add customers to its “Entity List” [removed: and “Unverified List,”] or [added: promulgate additional restrictions, or] take measures that could disrupt our product shipments [added: or the provision of services] to certain customers.

We are cooperating fully with the [added: U.S.] government in these matters.

[removed: These] [added: Any such] inquiries are subject to uncertainties, and we cannot predict the outcome of these inquiries, or any other governmental inquires or proceedings that may occur.

As a result, the actions of even a single customer or export regulations that apply to customers in certain countries, such as those in China, have exposed and can further expose [added: our business and operating results to greater volatility.]

The geographic concentration of our customer base could shift over time as a result of [added: changes in technology and competitive landscape, as well as] government policy and incentives to develop regional semiconductor industries.

Our business depends on our timely supply of [removed: equipment, services and related] products [added: and services] to meet the changing requirements of our customers, which depends in part on the timely delivery of parts, materials and services from suppliers and contract manufacturers.

Increases in demand for our products and worldwide demand for [added: semiconductor chips and] electronic [removed: products] [added: devices] can impact our suppliers’ ability to meet our demand requirements, and have [added: in the past] resulted in, and may [removed: continue] [added: from time] to [added: time] result in, a shortage of parts, materials and services needed to manufacture our products.

Volatility of demand for [removed: manufacturing] equipment can also increase our and our suppliers’ capital, technical, operational and other risks, and may cause some suppliers to exit businesses, or scale back or cease operations, which could impact our ability to meet customer demand.

[removed: Ongoing supply] [added: Supply] chain constraints may [removed: continue to] increase costs of logistics and parts for our products and may cause us to pass on increased costs to our customers, which may lead to reduced demand for our products and materially and adversely impact our operating results.

Supply chain disruptions have [removed: caused] [added: in the past caused,] and may [removed: continue] [added: from time] to [removed: cause] [added: time cause,] delays in our equipment production and delivery schedules, which can lead to our business performance becoming significantly dependent on quarter-end production and delivery schedules, and could have an adverse impact on our operating and financial results.

[removed: Cybersecurity] [added: Such] incidents [removed: affecting our suppliers could impact our supply chain] [added: have caused,] and may [removed: also cause] [added: from time to time cause,] difficulties and delays in our ability to obtain parts, materials and services needed to manufacture our products and provide services, and [added: have adversely impacted, and] may [added: from time to time] adversely [removed: impact] [added: impact,] our manufacturing operations, our ability to meet customer demand, and our operating results.

Artificial intelligence is evolving rapidly and is a relatively new demand driver for semiconductors and semiconductor equipment, and it is difficult to accurately forecast such demand.

- cybersecurity incidents;

- regional or global health epidemics;

For example, since 2022, we have received multiple subpoenas from government authorities requesting information relating to certain China customer shipments and export controls compliance, including from the U.S. Department of Justice, the U.S. Commerce Department Bureau of Industry and Security, and the U.S. Securities and Exchange Commission.

We have continued to receive related subpoenas, as well as requests for information, and may in the future receive additional related subpoenas and requests for information from such or other government authorities.

Cybersecurity incidents affecting our suppliers could impact our supply chain.

- political instability, social unrest, terrorism, acts of war or other geopolitical turmoil, such as the conflict in the Middle East, in locations where we or our customers or suppliers have manufacturing, research, engineering or other operations;

- information technology or infrastructure failures within our operations or those of a third-party supplier or service provider, including failures caused by cybersecurity incidents; impacts of natural disasters, extreme and chronic weather events (which may be exacerbated by climate change), or other events beyond our control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or fires); and

- regional or global health epidemics.

If we do not effectively address these factors, our business and results of operations may be materially and adversely impacted.

- the importance of advanced packaging to artificial intelligence computing.

We are exposed to risks related to government incentives and other agreements that may involve government entities.

From time to time we enter into agreements with government entities for grants, tax benefits and other incentives, or other funding related to our investment, research and development and production activities, or for sale of our products to government entities or government-funded programs.

These agreements typically include terms that are not common in similar agreements with non-governmental entities, including representations and warranties, covenants and certifications, and record-keeping, accounting, audit, intellectual property rights-sharing, information handling, supply chain management, headcount, security, disclosure and other requirements.

These agreements may also require us to achieve or maintain certain levels of investment, capital spending and performance milestones.

Compliance with these requirements may add complexity to our operations and increase our costs, and a failure to comply could result in cancelation of agreements or transactions, investigations, civil and criminal penalties, forfeiture of profits, reduction, termination or clawback of any funding, suspension or debarment from doing business with the government, or other penalties, any of which could have a material and adverse effect on our business, financial condition and results of operations.

We are exposed to risks related to the use of artificial intelligence by us and our competitors.

We are increasingly incorporating artificial intelligence capabilities into the development of technologies and our business operations, and into our products and services.

Artificial intelligence technology is complex and rapidly evolving, and may subject us to significant competitive, legal, regulatory, operational and other risks.

The implementation of artificial intelligence can be costly, and there is no guarantee that our use of artificial intelligence will enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers.

Our competitors may be more successful in their artificial intelligence strategy and develop superior products and services with the aid of artificial intelligence technology.

Additionally, artificial intelligence algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs.

This may give rise to legal liability, damage our reputation, and materially harm our business.

The use of artificial intelligence in the development of our products and services could also cause loss of intellectual property, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity.

Additionally, artificial intelligence technology may also create ethical issues, which could impair market adoption of such technology and impair demand for our products and services.

Furthermore, the United States and other countries may adopt laws and regulations related to artificial intelligence.

Such laws and regulations could cause us to incur greater compliance costs and limit the use of artificial intelligence in the development of our products and services.

Any failure or perceived failure by us to comply with such regulatory requirements could subject us to legal liabilities, damage our reputation, or otherwise have a material and adverse impact on our business.

Cybersecurity incidents may range from physical attacks on our computer system or network infrastructure, to employee or contractor error or misuse or unauthorized use of information

Threat actors may also attempt to influence employees, suppliers and other third-party providers, or customers to disclose sensitive information in order to gain access to our, our customers’ or business partners’ data.

Artificial intelligence and deepfake technologies could be used to attack information systems by creating more effective phishing emails or social engineering and by exploiting vulnerabilities in electronic security programs utilizing false image or voice recognition.

income taxes and effective tax rate.

The OECD continues to release additional guidance on this new global minimum tax framework.

We will continue to monitor these developments, as each jurisdiction incorporates changes into its tax laws.

Our conditional reduced tax rates in Singapore will expire in fiscal 2025, excluding potential renewal and subject to certain conditions with which we expect to comply.

There is risk our conditional reduced tax rates may not be renewed.

Our business depends on the successful implementation and proper functioning of information systems we use.

Our business depends on certain information systems, including, enterprise resource planning, product research and development, financial reporting, information technology network management, and telecommunications.

These systems may be maintained by us or by our third-party vendors.

Failures of information systems we use could disrupt our operations, impede our ability to timely and accurately process and report financial results, and adversely impact our business, financial condition and results of operations.

accounts globally in order to fund normal operations.

In August 2022, we received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting information relating to certain China customer shipments.

In November 2023, we received a subpoena from the U.S. Commerce Department’s Bureau of Industry and Security requesting the same information.

our business and operating results to greater volatility.

- cybersecurity incidents or information technology or infrastructure failures, including those of a third-party supplier or service provider; and

- natural disasters, the impacts of climate change, or other events beyond our control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or extreme weather conditions, fires, regional economic downturns, regional or global health epidemics, geopolitical turmoil, increased trade restrictions between the U.S. and China and other countries, social unrest, political instability, terrorism, or acts of war) in locations where we or our customers or suppliers have manufacturing, research, engineering or other operations.

- the increasing role of machine learning and artificial intelligence with respect to semiconductor equipment and related services; and

- the growing importance of specialty markets (such as Internet of Things, communications, automotive, power and sensors) that use mature process technologies and have a low barrier to entry.

- effectively and timely implement artificial intelligence strategies for our product and service offerings, which may be costly or ineffective, introduce errors, cause loss of intellectual property, and raise complex regulatory compliance, intellectual property and other issues;

From time to time we receive funding from the United States and other government agencies for certain strategic development programs to increase our research and development resources and address new market opportunities.

As a condition to this government funding, we are often subject to certain record-keeping, audit, intellectual property rights-sharing, and/or other obligations.

patent applications or related enforcement actions, and diminish the value and competitive advantage conferred by our intellectual property assets.

adversely impact our business and results of operations.

While it is too early to predict the outcome of these proposals, if enacted, they could have a material impact on our provision for income taxes and effective tax rate.

As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations are uncertain.

The failure to successfully implement enterprise resource planning and other information systems changes could adversely impact our business and operating results.

We periodically implement new or enhanced enterprise resource planning and related information systems in order to better manage our business operations, align our global organizations and enable future growth.

These strategies and targets, and their

We provide [removed: manufacturing] equipment, services and software to the semiconductor, display, and related industries.

Each of our segments is subject to variable industry conditions, as demand for [removed: manufacturing] equipment and services can change depending on supply and demand for chips, display [removed: technologies,] [added: technologies] and other electronic devices, as well as other factors, such as global economic, political and market conditions, and the nature and timing of technological advances in fabrication processes.

We operate in three reportable segments: Semiconductor Systems, Applied Global [removed: Services, and Display] [added: Services® (AGS),] and [removed: Adjacent Markets.][added: Display.]

A summary of financial information for each reportable segment is found in Note [removed: 16] [added: 14] of Notes to Consolidated Financial Statements.

Our [removed: broad range] [added: portfolio] of equipment and service products are highly technical and are sold primarily through a direct sales force.

Spending by semiconductor customers, which include companies that operate in the foundry, logic, memory, and other semiconductor chip markets, is driven by demand for [removed: electronic products, including smartphones and other] [added: products such as smartphones,] mobile devices, [removed: servers,] personal computers, [removed: automotive devices,] [added: servers for artificial intelligence (AI) and data centers, automobiles, clean energy,] storage, and other [removed: products.][added: products, and the nature and timing of technological advances in fabrication processes.]

The growth of data and emerging end-market drivers such as [removed: artificial intelligence,] [added: AI,] the [removed: Internet] [added: internet] of [removed: Things,] [added: things,] 5G networks, [removed: smart] [added: electric and autonomous] vehicles and augmented and virtual reality are also creating the next wave of growth for the industry.

The timing of customer investment in manufacturing equipment is also affected by the timing of next-generation process development and [removed: the timing] of capacity expansion to meet end-market demand.

Our strategic priorities include developing products that help solve customers’ challenges at technology inflections; expanding our served market opportunities in the semiconductor and display industries; and growing our [removed: services] [added: service] business.

Our significant investments in research, development and engineering [removed: must generally] [added: (RD&E) are intended to] enable us to deliver new products and technologies before the emergence of strong demand, [removed: thus] allowing customers to incorporate these products into their manufacturing plans during early-stage technology selection.

We [removed: work] [added: collaborate] closely with our global customers to design systems and processes [removed: that] [added: to] meet their [removed: planned] technical and production requirements.

The following table presents certain significant measurements for the [removed: past three fiscal years:][added: periods indicated:]

| | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] | | | | | | [removed: 2023] [added: 2024] over [removed: 2022] [added: 2023] | | | | | | [removed: 2022 over 2021] | | |

| Gross margin | | | [removed: 46.7] [added: 47.5] | | % | | | | [removed: 46.5] [added: 46.7] | | % | | | | [removed: 47.3] | | [removed: %] | | | | [removed: 0.2] [added: 0.8] points | | | | | | [removed: (0.8) points] | | |

| Operating margin | | | 28.9 | | % | | | | [removed: 30.2] [added: 28.9] | | % | | | | [removed: 29.9] | | [removed: %] | | | | [removed: (1.3)] [added: —] points | | | | | | [removed: 0.3 points] | | |

| Earnings per diluted share | | | $ | [removed: 8.11] [added: 8.61] | | | | | $ | [removed: 7.44] [added: 8.11] | | | | | [removed: $] | [removed: 6.40] | | | | | $ | [removed: 0.67] [added: 0.50] | | | | | [removed: $] | [removed: 1.04] | |

[removed: Fiscal 2023 and] [added: Our] fiscal [removed: 2022] [added: 2024 and 2023] each contained 52 [removed: weeks, while fiscal 2021 contained 53] weeks.

Semiconductor [removed: equipment] [added: Systems net revenue increased in fiscal 2024 as compared to the prior year as] customers continued to make strategic investments in new capacity and new technology [removed: transitions during fiscal 2023.][added: transitions.]

Our [removed: Applied Global Services] [added: AGS] net [removed: sales] [added: revenue] in fiscal [removed: 2023] [added: 2024] increased [removed: compared to fiscal 2022] primarily due to an increase in [removed: sales] [added: net revenue] associated with long-term service agreements and [removed: higher] customer spending on [removed: legacy systems,] [added: spares,] partially offset by [removed: a decrease in net sales due to additional export regulations issued by the United States government in 2022 and] lower customer [removed: utilization rates.][added: spending on 200mm equipment.]

For a description of [removed: risks associated with global trade,] [added: these risks,] see the risk factor entitled [removed: *“Business] [added: “*Business] and Industry Risks - Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the competitiveness of our products [added: and services] relative to local and global [removed: competitors”*] [added: competitors*”] in Part I, Item 1A, “Risk [removed: Factors.*”*][added: Factors.”]

Net [removed: sales] [added: revenue by segment] for the periods [removed: indicated] [added: presented] were as follows:

| | | | [removed: 2023] [added: 2024] | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | | | | | | | | | | | | | [removed: 2021] | | | | | | [added: 2024 over 2023] | | | | | | [removed: 2023 over 2022] | | | | | | [removed: 2022 over 2021] | | |

| Semiconductor Systems | | | $ | [removed: 19,698] [added: 19,911] | | | | | [removed: 74%] [added: 73%] | | | | | | | | | | | | $ | [removed: 18,797] [added: 19,698] | | | | | [removed: 73%] [added: 74%] | | | | | | | | | | | | [removed: $] | [removed: 16,286] | | | | | [removed: 71%] | | | | | | [removed: 5] [added: 1] | | % | | | | [removed: 15] | | [removed: %] |

| Applied Global Services | | | [removed: 5,732] [added: 6,225] | | | | | | [removed: 22%] [added: 23%] | | | | | | | | | | | | [removed: 5,543] [added: 5,732] | | | | | | 22% | | | | | | | | | | | | [removed: 5,013] | | | | | | [removed: 22%] | | | | | | [removed: 3] [added: 9] | | % | | | | [removed: 11] | | [removed: %] |

| Corporate and Other | | | [removed: 219] [added: 155] | | | | | | 1% | | | | | | | | | | | | [removed: 114] [added: 219] | | | | | | [removed: —%] [added: 1%] | | | | | | | | | | | | [removed: 130] | | | | | | [removed: —%] | | | | | | [removed: 92] [added: (29)] | | % | | | | [removed: (12)] | | [removed: %] |

| Total | | | $ | [removed: 26,517] [added: 27,176] | | | | | 100% | | | | | | | | | | | | $ | [removed: 25,785] [added: 26,517] | | | | | 100% | | | | | | | | | | | | [removed: $] | [removed: 23,063] | | | | | [removed: 100%] | | | | | | [removed: 3] [added: 2] | | % | | | | [removed: 12] | | [removed: %] |

The Semiconductor Systems segment continued to represent the largest contributor of net [removed: sales.][added: revenue.]

Net [removed: sales] [added: revenue] by geographic region, determined by the location of customers’ facilities to which products were [removed: shipped,] [added: shipped and services] were [added: performed, was] as follows:

| Korea | | | [removed: 4,609] [added: 4,493] | | | | | | [removed: 18%] [added: 17%] | | | | | | | | | | | | [removed: 4,395] [added: 4,609] | | | | | | [removed: 17%] [added: 18%] | | | | | | | | | | | | [removed: 5,012] | | | | | | [removed: 22%] | | | | | | [removed: 5] [added: (3)] | | % | | | | [removed: (12)] | | [removed: %] |

| Japan | | | [removed: 2,075] [added: 2,154] | | | | | | 8% | | | | | | | | | | | | [removed: 2,012] [added: 2,075] | | | | | | 8% | | | | | | | | | | | | [removed: 1,962] | | | | | | [removed: 8%] | | | | | | [removed: 3] [added: 4] | | % | | | | [removed: 3] | | [removed: %] |

| Southeast Asia | | | [removed: 758] [added: 1,141] | | | | | | [removed: 3%] [added: 4%] | | | | | | | | | | | | [removed: 1,084] [added: 758] | | | | | | [removed: 4%] [added: 3%] | | | | | | | | | | | | [removed: 677] | | | | | | [removed: 3%] | | | | | | [removed: (30)] [added: 51] | | % | | | | [removed: 60] | | [removed: %] |

| Asia Pacific | | | [removed: 20,359] [added: 21,915] | | | | | | [removed: 77%] [added: 81%] | | | | | | | | | | | | [removed: 21,007] [added: 20,359] | | | | | | [removed: 81%] [added: 77%] | | | | | | | | | | | | [removed: 19,928] | | | | | | [removed: 86%] | | | | | | [removed: (3)] [added: 8] | | % | | | | [removed: 5] | | [removed: %] |

| United States | | | [removed: 4,006] [added: 3,818] | | | | | | [removed: 15%] [added: 14%] | | | | | | | | | | | | [removed: 3,104] [added: 4,006] | | | | | | [removed: 12%] [added: 15%] | | | | | | | | | | | | [removed: 2,038] | | | | | | [removed: 9%] | | | | | | [removed: 29] [added: (5)] | | % | | | | [removed: 52] | | [removed: %] |

| Europe | | | [removed: 2,152] [added: 1,443] | | | | | | [removed: 8%] [added: 5%] | | | | | | | | | | | | [removed: 1,674] [added: 2,152] | | | | | | [removed: 7%] [added: 8%] | | | | | | | | | | | | [removed: 1,097] | | | | | | [removed: 5%] | | | | | | [removed: 29] [added: (33)] | | % | | | | [removed: 53] | | [removed: %] |

The changes in net [removed: sales] [added: revenue from customers] in all other regions for fiscal [removed: 2023 compared to fiscal 2022] [added: 2024] primarily reflected changes in [added: investment and spending on] semiconductor [removed: manufacturing] equipment [removed: spending.][added: and services.]

[removed: Gross margins] [added: Operating expenses] for the periods [removed: indicated] [added: presented] were as follows:

[removed: Research, Development] [added: | Research, development] and [removed: Engineering][added: engineering (RD&E) | | | $ | 3,233 | | | | | $ | 3,102 | | | | | | | | | | | $ | 131 | | | | | | | |]

Development cycles [removed: range from 12 to 36 months depending] [added: depend] on whether the product is an enhancement of an existing product, which typically has a shorter development cycle, or a new product, which typically has a longer development cycle.

We believe that it is critical to [removed: continue to] make substantial investments in RD&E to assure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs.

We have [removed: maintained] and [removed: intend to] continue [removed: our commitment] to [removed: investing] [added: invest] in RD&E in order to continue to offer new products and technologies.

The following section generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.

Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended October 29, 2023, filed on December 15, 2023.

Our customers’ products are used in a wide variety of products such as personal computing devices, mobile phones, artificial intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics.

The AGS segment provides services, spares and factory automation software to customer fabrication plants globally to help customers optimize performance of our large, global installed base of semiconductor, display and other equipment.

The AGS segment also includes 200mm and other equipment, which is shipped to many customers globally that serve the non-leading-edge end markets.

Our strategy is to continue to shift the AGS’ service and spares business to a subscription agreement model, improving customer factory performance and optimizing operating costs, and providing us a more predictable revenue stream.

Display segment growth depends primarily on consumer demand for increasingly larger and more advanced TVs and high-resolution displays for mobile devices and information technology (IT) products, including laptops, monitors and tablets, as well as new form factors, including thin, light, curved and flexible displays, and new applications such as augmented and virtual reality.

Effective in the first quarter of fiscal 2024, management began including share-based compensation expense in the evaluation of reportable segments' performance.

Prior-year numbers have been recast to conform to the current-year presentation.

The United States government has implemented export regulations for U.S. semiconductor technology sold or provided to customers in China, which have limited our ability to provide certain products and services to customers in China, over the past several years.

The U.S. government continues to issue new export licensing requirements, and additional updates and other requirements that have had the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including in China.

| Net revenue | | | $ | 27,176 | | | | | $ | 26,517 | | | | | | | | | | | $ | 659 | | | | | | | |

| Operating income | | | $ | 7,867 | | | | | $ | 7,654 | | | | | | | | | | | $ | 213 | | | | | | | |

| Net income | | | $ | 7,177 | | | | | $ | 6,856 | | | | | | | | | | | $ | 321 | | | | | | | |

| Display | | | 885 | | | | | | 3% | | | | | | | | | | | | 868 | | | | | | 3% | | | | | | | | | | | | | | | | | | | | | | | | 2 | | % | | | | | | |

| | | | 2024 | | | | | | 2023 | | | | | | | | |

Net revenue in fiscal 2024 increased as compared to the prior year.

Gross margin increased primarily driven by lower material, freight, logistics, and manufacturing costs, favorable changes in customer and product mix and lower depreciation expense as a result of changes in certain assets’ useful lives effective as of the beginning of fiscal 2024, partially offset by an increase in labor costs.

Foundry and logic customers’ spending decreased driven primarily by lower customer investments in leading-edge manufacturing technologies, partially offset by increased customer investments in non-leading edge manufacturing technologies.

Investments by semiconductor equipment customers are expected to remain strong with growth in the adoption of high-bandwidth memory and other forms of advanced packaging, continued demand for AI and data center computing, and for non-leading edge nodes.

Demand for services is expected to grow as our installed base of systems and chambers increases and customers renew long-term service agreements.

Our Display net revenue increased in fiscal 2024 compared to the prior year primarily due to higher customer investments in display fabrication equipment for IT products including laptops, monitors and tablets, partially offset by lower customer investments in display fabrication equipment for TVs.

Over the longer term, we believe secular drivers such as AI, data center computing, the internet of things, 5G networks, electric and autonomous vehicles and augmented and virtual reality will create the next wave of growth for semiconductors and expand our served market opportunities.

| China | | | $ | 10,117 | | | | | 37% | | | | | | | | | | | | $ | 7,247 | | | | | 27% | | | | | | | | | | | | | | | | | | | | | | | | 40 | | % | | | | | | |

| Taiwan | | | 4,010 | | | | | | 15% | | | | | | | | | | | | 5,670 | | | | | | 21% | | | | | | | | | | | | | | | | | | | | | | | | (29) | | % | | | | | | |

| Total | | | $ | 27,176 | | | | | 100% | | | | | | | | | | | | $ | 26,517 | | | | | 100% | | | | | | | | | | | | | | | | | | | | | | | | 2 | | % | | | | | | |

Net revenue increased from customers in China in fiscal 2024 primarily due to investments in semiconductor equipment and spending on spares and services, partially offset by a decrease in investments in 200mm equipment.

Net revenue decreased from customers in Europe primarily due to lower investments in semiconductor equipment.

Net revenue from customers in Taiwan decreased primarily due to lower investments in semiconductor equipment and spares, offset by higher spending on services.

Operating Expenses

| | | | 2024 | | | | | | 2023 | | | | | | | | | | | | 2024 over 2023 | | | | | | | | |

The year-over-year change in RD&E expenses was primarily due to additional headcount to support our ongoing investments in product development initiatives, consistent with our growth strategy, offset by lower depreciation expense as a result of changes in certain assets’ useful lives effective as of the beginning of fiscal 2024.

General and administrative expenses in fiscal 2024 increased primarily due to the increases in share-based compensation expense and professional fees.

| | | | 2024 | | | | | | 2023 | | | | | | | | | | | | 2024 over 2023 | | | | | | | | |

Interest expense in fiscal 2024 increased slightly as a result of the issuance of senior unsecured notes in June 2024.

| | | | 2024 | | | | | | 2023 | | | | | | | | | | | | 2024 over 2023 | | | | | | | | |

Our effective tax rate for fiscal 2024 was higher than the prior fiscal year primarily due to lower tax credits in fiscal 2024, partially offset by higher proportion of pre-tax income in lower tax jurisdictions in fiscal 2024.

Segment Operating Income

| | | | 2024 | | | | | | 2023 | | | | | | | | | | | | 2024 over 2023 | | | | | | | | | | | | | | | | | | | | |

| Operating income (loss) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

MD&A consists of the following sections:

*•Overview:* a summary of our business and measurements

- *Results of Operations:* a discussion of operating results

- *Segment Information:* a discussion of segment operating results

*•Recent Accounting Pronouncements:* a discussion of new accounting pronouncements and its impact to our consolidated financial statements

- *Financial Condition, Liquidity and Capital Resources:* an analysis of cash flows, sources and uses of cash

- *Contractual Obligations and Off-Balance Sheet Arrangements*

- *Critical Accounting Policies and Estimates:* a discussion of critical accounting policies that require the exercise of judgments and estimates

These customers may use what they manufacture in their own end products or sell the items to other companies for use in electronic products.

Demand for display manufacturing equipment spending depends primarily on consumer demand for increasingly larger and more advanced TVs as well as larger and higher resolution displays for next-generation mobile devices, and investments in new types of display technologies.

In light of these conditions, our results can vary significantly year-over-year, as well as quarter-over-quarter.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | Change | | | | | | | | |

| Net sales | | | $ | 26,517 | | | | | $ | 25,785 | | | | | $ | 23,063 | | | | | $ | 732 | | | | | $ | 2,722 | |

| Operating income | | | $ | 7,654 | | | | | $ | 7,788 | | | | | $ | 6,889 | | | | | $ | (134) | | | | | $ | 899 | |

| Net income | | | $ | 6,856 | | | | | $ | 6,525 | | | | | $ | 5,888 | | | | | $ | 331 | | | | | $ | 637 | |

Foundry and logic spending increased in fiscal 2023 compared to fiscal 2022 driven by customer investments in mature manufacturing nodes to serve demand across a wide range of products.

Memory customers’ spending in fiscal 2023 was lower as compared to fiscal 2022 due to deferred capacity additions primarily as a result of weakness in demand for consumer electronic products.

Our Display and Adjacent Markets net sales decreased in fiscal 2023 compared to fiscal 2022 primarily due to lower customer investments in display manufacturing equipment for TVs as a result of weakness in demand for consumer electronic products.

We experienced supply chain and logistics constraints in fiscal 2022, and although there have been significant improvements in supply chain performance in fiscal 2023, we expect some shortages to persist, and managing these supply chain constraints to increase shipments to customers remains a top priority.

In fiscal 2024, we expect advanced foundry and logic demand to be stronger as compared to fiscal 2023 due to increased customer spending in PC, cloud and Artificial Intelligence (AI) data centers as well as customers’ continued investments in new technology.

Demand for mature manufacturing nodes is expected to be lower as compared to fiscal 2023, primarily due to decreased customer spending in the industrial automation and automotive markets.

We expect memory customers’ spending to be higher as compared to fiscal 2023 as customers continue to invest in new technology.

In the past two years, the United States government announced additional export regulations for U.S. semiconductor technology sold in China.

Net Sales

| Display and Adjacent Markets | | | 868 | | | | | | 3% | | | | | | | | | | | | 1,331 | | | | | | 5% | | | | | | | | | | | | 1,634 | | | | | | 7% | | | | | | (35) | | % | | | | (19) | | % |

Net sales in fiscal 2023 compared to fiscal 2022 and fiscal 2022 compared to fiscal 2021 increased primarily due to continued customer investment in semiconductor equipment, partially offset by the reduction in customer investment in display manufacturing equipment.

The increase in net sales in fiscal 2023 compared to fiscal 2022 was also due to improvements in our supply chain performance enabling us to better fulfill demand.

| China | | | $ | 7,247 | | | | | 27% | | | | | | | | | | | | $ | 7,254 | | | | | 28% | | | | | | | | | | | | $ | 7,535 | | | | | 33% | | | | | | — | | % | | | | (4) | | % |

| Taiwan | | | 5,670 | | | | | | 21% | | | | | | | | | | | | 6,262 | | | | | | 24% | | | | | | | | | | | | 4,742 | | | | | | 20% | | | | | | (9) | | % | | | | 32 | | % |

The increases in net sales to customers in the U.S. and Europe for fiscal 2023 compared to fiscal 2022 primarily reflected increased investment by customers in semiconductor equipment and increased customer spending on legacy systems and comprehensive service agreements.

The increase in net sales to customers in Korea for fiscal 2023 compared to fiscal 2022 primarily reflected increased investment by customers in semiconductor equipment and increased customer spending on comprehensive service agreements, spares and legacy systems, partially offset by decreased investment in display manufacturing equipment.

The increase in net sales to customers in Japan for fiscal 2023 compared to fiscal 2022 primarily reflected increased investment in display manufacturing equipment, partially offset by decreased investment by customers in semiconductor equipment.

Net sales to customers in China for 2023 compared to fiscal 2022 remained flat and primarily reflected increased investment in semiconductor equipment, offset by decreased in customer spending on long-term service agreements due to the impact of additional export regulations issued by the United States government in 2022 and decreased investment in display manufacturing equipment.

The increases in net sales in all regions other than China and Korea in fiscal 2022 compared to fiscal 2021 primarily reflected changes in semiconductor equipment spending and customer spending on comprehensive service agreements.

The decrease in net sales to customers in China for fiscal 2022 compared to fiscal 2021 primarily reflected decreased investment in display manufacturing equipment and semiconductor equipment, partially offset by increased spending on spares and comprehensive service agreements.

The decrease in net sales to customers in Korea for fiscal 2022 compared to fiscal 2021 primarily reflected decreased investment in semiconductor equipment, partially offset by increased investment in display manufacturing equipment.

Gross Margin

| | | | (In millions, except percentages) | | | | | | | | | | | | | | | | | | | | | | | | | | |

*Available-for-sale Debt [removed: Securities.*] [added: Securities -*] The market value of our investments in available-for-sale securities was approximately [removed: $2.1] [added: $3.2] billion at October [removed: 29, 2023.][added: 27, 2024.]

An immediate hypothetical 100 basis point increase in interest rates would result in a decrease in the fair value of investments as of October [removed: 29, 2023] [added: 27, 2024] of approximately [removed: $27] [added: $36] million.

[removed: *Debt.*] [added: *Debt -*] At October [removed: 29, 2023,] [added: 27, 2024,] the aggregate principal of long-term senior unsecured notes issued by us was $5.5 billion with an estimated fair value of [removed: $4.7] [added: $5.1] billion.

A hypothetical decrease in interest rates of 100 basis points would result in an increase in the fair value of our long-term senior notes issuances of approximately [removed: $398] [added: $428] million at October [removed: 29, 2023.][added: 27, 2024.]

Gains and losses on these hedging contracts generally mitigate the effect of currency movements on our net [removed: sales,] [added: revenue,] cost of products sold, and operating expenses.

A hypothetical 10% adverse change in foreign currency exchange rates relative to the U.S. Dollar would result in a decrease in the fair value of these hedging contracts of [removed: $163] [added: $141] million at October [removed: 29, 2023.][added: 27, 2024.]

Incorporated in 1967, [removed: Applied Materials, Inc. (Applied, we, us and our) is] [added: we are] a Delaware corporation.

We operate in three reportable segments: Semiconductor Systems, Applied Global [removed: Services, and Display] [added: Services® (AGS),] and [removed: Adjacent Markets.][added: Display.]

A summary of financial information for each reportable segment is found in Note [removed: 16] [added: 14] of Notes to Consolidated Financial Statements.

Our Semiconductor Systems segment [added: designs,] develops, manufactures and sells a wide range of [removed: manufacturing] [added: primarily 300mm] equipment used to fabricate semiconductor chips, also referred to as integrated circuits (ICs).

[removed: The Semiconductor Systems segment includes semiconductor capital equipment used for many] [added: Our products address] steps [removed: of the chip making] [added: across materials engineering,] process [added: control and advanced packaging,] including the [removed: transfer] [added: conversion] of patterns into device structures, transistor and interconnect fabrication, metrology, inspection and review, and packaging technologies for connecting finished IC die.

Customer demand [removed: for products and services] is fulfilled through a global distribution system in more than [removed: 195] [added: 200] locations and trained [removed: service] [added: field] engineers located [removed: in close proximity to] [added: near] customer sites to support [removed: over 52,000 installed Applied] [added: our] semiconductor, display and other [removed: manufacturing systems] [added: equipment] worldwide.

[removed: The] Display [removed: and Adjacent Markets] segment is comprised primarily of products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other display technologies for TVs, monitors, laptops, personal computers (PCs), [removed: electronic] tablets, [removed: smart phones,] [added: smartphones,] and other consumer-oriented devices.

Display [removed: and Adjacent Markets] segment growth depends primarily on consumer demand for increasingly larger and more advanced TVs and high-resolution displays for mobile devices [added: and information technology (IT) products, including laptops, monitors and tablets,] as well as new form factors, including thin, light, curved and flexible displays, and new applications such as augmented and virtual reality.

Backlog by reportable segment as of October [removed: 29, 2023] [added: 27, 2024] and October [removed: 30, 2022] [added: 29, 2023] was as follows:

| Semiconductor Systems | | | | | | | | | | | | | | | | | | $ | [removed: 11,127] [added: 8,259] | | | | | [removed: 65] [added: 52] | | % | | | | $ | [removed: 12,691] [added: 11,127] | | | | | [removed: 67] [added: 65] | | % |

| Applied Global Services | | | | | | | | | | | | | | | | | | [removed: 5,162] [added: 6,767] | | | | | | [removed: 30] [added: 43] | | % | | | | [removed: 5,643] [added: 5,162] | | | | | | 30 | | % |

| Corporate and Other | | | | | | | | | | | | | | | | | | [removed: 49] [added: 20] | | | | | | — | | % | | | | [removed: 96] [added: 49] | | | | | | — | | % |

| Total | | | | | | | | | | | | | | | | | | $ | [removed: 17,171] [added: 15,873] | | | | | 100 | | % | | | | $ | [removed: 19,011] [added: 17,171] | | | | | 100 | | % |

Of the total backlog as of October [removed: 29, 2023,] [added: 27, 2024,] approximately [removed: 30%] [added: 31%] is not reasonably expected to be filled within the next 12 months.

Our backlog on any particular date is not necessarily indicative of actual sales for any future [removed: periods, due to the potential for customer changes such as new orders or cancellations.][added: periods.]

We utilize a distributed manufacturing model under which manufacturing and supply chain activities are conducted in various countries, [removed: primarily] including [removed: China, Israel,] [added: United States, Singapore,] Japan, [added: China,] Korea, [removed: Singapore,] Taiwan, [removed: the United States] [added: Israel] and other countries in Asia and Europe.

Our long-term growth strategy requires continued development of new materials engineering [removed: capabilities,] [added: solutions,] including products and platforms that enable expansion into new and adjacent markets.

Our product development and [removed: engineering organizations] [added: engineering, and process support] are [removed: located] [added: performed] primarily in the United States, [removed: as well as in China, Europe, India, Israel, Korea, Singapore] [added: India] and [removed: Taiwan.][added: Israel.]

We have operations in many countries, with some of our business activities concentrated in certain geographic [removed: areas, and global and regional economic and political conditions can impact our business and financial results.][added: areas.]

Information on net [removed: sales] [added: revenue] to unaffiliated customers and long-lived assets attributable to our geographic regions is included in Note [removed: 16] [added: 14] of Notes to Consolidated Financial Statements.

The following companies accounted for at least 10 percent of our net [removed: sales in each] [added: revenue for the following] fiscal [removed: year, which were] [added: years] for products and services in multiple reportable segments.

| Samsung Electronics Co., Ltd. | | | [removed: 15%] [added: 12%] | | | | | | [removed: 12%] [added: 15%] | | | | | | [removed: 20%] | | |

| Taiwan Semiconductor Manufacturing Company Limited | | | [removed: 19%] [added: 11%] | | | | | | [removed: 20%] [added: 19%] | | | | | | [removed: 15%] | | |

Substantial competition exists [removed: in] [added: across] all [removed: areas] [added: the segments] of our business.

Our [removed: broad] [added: comprehensive] portfolio offers a variety of differentiated products, including co-optimized and integrated materials solutions that enable unique films, structures and devices.

[removed: Our] [added: We must successfully anticipate technology inflections, and our] products must continuously evolve to satisfy customers’ requirements to compete effectively in the marketplace.

[removed: Some of these competitors offer] [added: Competitors serving the semiconductor equipment industry range from companies offering] a single product line [removed: and] [added: to] others [removed: offer] [added: offering] multiple product lines, and [removed: range from serving] [added: those that serve] a single region to global, diversified companies.

[removed: Products] [added: The products] and services [removed: within] [added: offered by] the [removed: Applied Global Services] [added: AGS] segment [removed: complement] [added: enhance those of] the Semiconductor Systems and Display [removed: and Adjacent Markets segments’ products] [added: segments, particularly] in markets [removed: that are characterized by] [added: with] demanding [removed: worldwide] [added: global] service requirements.

Competition in the [removed: Applied Global Services] [added: AGS] segment includes a diverse group of [removed: numerous] third-party service providers [removed: and] [added: as well as] customers that [added: choose to] perform their own service.

To compete effectively, we offer products and services to improve [removed: tool] [added: system] performance, lower overall cost of ownership, and increase yields and productivity of customers’ fab operations.

Significant competitive factors include [removed: productivity, cost-effectiveness,] [added: cost-effectiveness] and the level of technical service and support.

Products in the Display [removed: and Adjacent Markets] segment are generally subject to strong competition from a number of major competitors primarily in Asia.

Important factors affecting the competitive position of our Display [removed: and Adjacent Markets] products include: industry trends, our ability to innovate and develop new products, and the extent to which our products are technically-differentiated, as well as which customers within a highly concentrated customer base are making capital equipment investments and our existing position at these customers.

We have more than [removed: 19,600] [added: 22,000] active patents in the United States and other countries, and additional applications are pending for new inventions.

We pay royalties under [removed: existing] patent license agreements for the use, in [removed: several] [added: some] of our products, of certain patented technologies.

In the normal course of business, we periodically [removed: receive and make inquiries regarding possible] [added: address the possibility of] patent infringement.

These regulations, which differ among jurisdictions, include those related to financial and other disclosures, accounting standards, [added: securities,] corporate governance, [added: public procurement and public funding,] intellectual property, tax, [removed: trade, including] [added: trade (including] import, export and [removed: customs,] [added: customs),] antitrust, [removed: environment,] [added: cybersecurity, environment (including those related to sustainability] and [added: climate),] health and [removed: safety, climate change,] [added: safety] employment, immigration and travel regulations, [added: human rights,] privacy, data protection and localization, and anti-corruption.

With respect to environmental, health and safety regulations, we maintain a number of programs that are primarily preventative in nature and regularly [removed: monitors] [added: monitor] ongoing compliance with applicable laws and regulations.

For additional discussions regarding the impact of compliance with income tax laws and regulations on our business and operations, *see also “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Results of Operations – Income Taxes” and Note [removed: 14] [added: 12] of the Notes to the Consolidated Financial Statements.*

To achieve this level of value creation, we believe we must [added: continue to] attract, hire, develop and retain a world-class global workforce.

Applied Materials, Inc. is the leader in the materials engineering solutions used to produce virtually every semiconductor and advanced display in the world.

We are experts in the design, development, production, and servicing of the critical wafer fabrication and display fabrication tools our customers need to manufacture semiconductors and displays.

Our customers’ products are used in a wide variety of products such as personal computing devices, mobile phones, artificial intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics.

We have the semiconductor capital equipment industry’s most comprehensive portfolio of products.

This breadth allows us the ability to connect and co-optimize technologies across our portfolio, enabling our customers to achieve superior results as manufacturing semiconductors and displays is becoming increasingly complex.

Semiconductors provide the foundation for advances in technology that are reshaping the global economy, including artificial intelligence, internet of things, robotics, electric and autonomous vehicles, and clean energy.

The Semiconductor Systems segment represents the largest contributor to our net revenue.

The Semiconductor Systems segment consists of the semiconductor capital equipment industry’s most comprehensive portfolio of products used in the chip making process.

In addition to providing equipment for individual process steps, we have the ability to combine, co-optimize and integrate our technologies to develop highly differentiated solutions for our customers.

Our equipment helps customers improve the power, performance, yield and costs of the semiconductor devices.

Our process control systems employ optical and eBeam technologies that allow customers to inspect and review critical semiconductor architectures throughout the manufacturing process, helping improve chip yields.

Our advanced packaging systems use our materials engineering expertise to allow customers to connect multiple chips together through heterogeneous integration, enabling them to advance the technology roadmap beyond a single chip.

Our Semiconductor Systems sales are to customers that serve the following markets: foundry, logic and other; DRAM; flash memory.

Foundry, logic, and other is comprised of leading-edge and non-leading edge technology nodes.

Leading-edge represents customers that are producing on the most advanced technology nodes.

Non-leading edge technology nodes serve markets such as internet of things, communications, automotive, power and sensors.


The AGS segment provides services, spares and factory automation software to customer fabrication plants globally.

The AGS segment also manufactures and sells 200mm and other equipment, which is shipped to customers globally that serve non-leading-edge markets.

AGS’s transactional and subscription service products, spares and factory automation software is purchased by customers to optimize the performance of our large, global installed base of semiconductor, display and other equipment.

These solutions are also used to optimize plant performance and productivity.

Display

The expertise that we have in materials engineering on large glass substrates is synergistic with the advanced packaging business in the Semiconductor Products Group, as there is a trend in the industry to utilize various types of substrates, including glass.

| | | | | | | | | | | | | 2024 | | | | | | | | | | | | 2023 | | | | | | | | | | | | | | |

| Display | | | | | | | | | | | | | | | | | | 827 | | | | | | 5 | | % | | | | 833 | | | | | | 5 | | % |

As a result of new export rules and regulations issued in December 2024, backlog as of October 27, 2024 is expected to be reduced by approximately $549 million.

This reduction would have resulted in total backlog as of October 27, 2024 of $15.3 billion, of which approximately 31% would not have been reasonably expected to be filled within 12 months.

Our backlog is subject to change, including the potential for customer changes such as new orders or cancellations, and changes in export rules and regulations.

Our customer demonstrations are performed primarily in the United States, China, Taiwan, Israel and South Korea.

| | | | 2024 | | | | | | 2023 | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

We could see increased competition from domestic equipment manufacturers in China resulting from local government incentives and funding as well as export controls established by the United States government to restrict the sale of certain technologies to customers in China.

Export controls enacted by the United States government that restrict the sale of certain technologies to customers in China may also provide an advantage to our international competitors.

Culture of Inclusion

A global company with a broad set of capabilities in materials engineering, we provide manufacturing equipment, services and software to the semiconductor, display and related industries.

With our diverse technology capabilities, we deliver products and services that improve device performance, power, yield and cost.

Our customers include manufacturers of semiconductor chips, liquid crystal and organic light-emitting diode (OLED) displays, and other electronic devices.

These customers may use what they manufacture in their own end products or sell the items to other companies for use in electronic products.

Our metrology, inspection and review systems’ imaging capabilities and algorithms employ optical and e-beam technologies to meet the most advanced technical demands in areas including self-aligned double and quad patterning, extreme ultraviolet layers, measurement-intensive optimal proximity correction mask qualification, and new 3D architectures.

Our packaging technologies address challenges resulting from the increasing heterogeneous integration of multiple IC dies in a single package.

We deliver leading-edge capabilities that enable chipmakers to establish accurate statistical process control, ramp up production runs rapidly, and achieve consistently high production yields.

We also provide manufacturing equipment that helps improve performance, power, yield and cost of semiconductor devices that use mature process technologies and serve specialty markets such as the Internet of Things, Communications, Automotive, Power and Sensors.

Our Semiconductor Systems equipment is sold to integrated device manufacturers and foundries worldwide.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Semiconductor Systems Technologies | | | | | | Product(s) | | |

| Epitaxy Epitaxy (or epi) is a technique for growing silicon (e.g. silicon with another element) as a uniform crystalline structure on a wafer to form high quality material for the device circuity. Epi technology is used in device transistors to enhance chip speed. | | | | | | Centura RP Epi | | |

| Ion Implant Ion implantation is a key technology for forming transistors and is used many times during chip fabrication. During ion implantation, wafers are bombarded by a beam of electrically-charged ions, called dopants, which can change the electrical properties of the exposed semiconductor material. | | | | | | VIISta Systems | | |

| Oxidation/Nitridation These systems provide critical oxidation steps - like memory gate oxide, shallow trench isolation and liner oxide - for advanced device scaling. | | | | | | Vantage, Radiance and Centura Systems | | |

| Rapid Thermal Processing (RTP) RTP is used primarily for annealing, which modifies the properties of deposited films. Single-wafer RTP systems are also used for growing high-quality oxide and oxynitride films. | | | | | | Vantage Systems | | |

| Physical Vapor Deposition (PVD) PVD is used to deposit high quality metal films. Applications include metal gate, silicides, contact liner/barrier, interconnect copper barrier seed and metal hard mask. | | | | | | Endura, Charger and Axcela Systems | | |

| Chemical Vapor Deposition (CVD) CVD is used to deposit dielectric and metal films on a wafer. During the CVD process, gases that contain atoms of the material to be deposited react on the wafer surface, forming a thin film of solid material. | | | | | | Endura, Centura and Producer Systems | | |

| Chemical Mechanical Planarization (CMP) CMP is used to planarize a wafer surface, a process that allows subsequent photolithography patterning and material deposition steps to occur with greater accuracy, resulting in more uniform film layers with minimal thickness variations. | | | | | | Reflexion and Mirra Systems | | |

| Electrochemical Deposition (ECD) ECD is a process by which metal atoms from a chemical fluid (an electrolyte) are deposited on the surface of an immersed object. | | | | | | Raider and Nokota Platforms | | |

| Atomic Layer Deposition (ALD) ALD technology enables ultra thin film growth of either a conducting or insulating material with uniform coverage in nanometer-sized structures. | | | | | | Olympia, Sprinter, Morpher and P-300BV Systems | | |

| Etch Etching is used many times throughout the IC manufacturing process to selectively remove material from the surface of a wafer. We offer systems for etching dielectric, metal, and silicon films to meet the requirements of advanced processing. | | | | | | Centris, Centura, Producer and Vistara Systems | | |

| Selective Processing (Deposition and Removal) Selective processing uses specially co-designed chemical and materials interactions to enable delicate and precise deposition and removal of target materials. | | | | | | Endura and Producer Systems | | |

| Metrology and Inspection Metrology and inspection tools are used to locate, measure, and analyze defects and features on the wafer during various stages of the fabrication processes. We enable customers to characterize and control critical dimension (CD) and defect issues, especially at advanced generation technology nodes. | | | | | | SEMVision eBeam Review PROVision eBeam Metrology PrimeVision eBeam Inspection Enlight Optical Inspection UVision Optical Inspection VeritySEM CD-SEM Metrology Aera Mask Inspection | | |

The Applied Global Services® (AGS) segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, remanufactured earlier generation equipment and factory automation software for semiconductor, display and other products.

We offer the following general types of services and products under the Applied Global Services segment.

| | | |

| --- | --- | --- |

| AGS Solutions and Technology | | |

| Technology-Enabled Services® A comprehensive service product portfolio that combines service technology and tool specific performance commitments in order to optimize customer factory productivity. | | |

| Fab Consulting Experts using advanced analytical tools to solve production problems that have the greatest impact on customer fab productivity. | | |

| Supply Chain Assurance Programs Spare parts product portfolio offers options to balance inventory, cost and risk to efficiently meet fab requirements. | | |

| Subfab Equipment These solutions lower costs, save energy, reduce environmental impact, and meet Environmental Protection Agency reporting regulations for greenhouse gas emissions. | | |

| Legacy Equipment and Upgrades Comprehensive 200mm equipment and upgrades portfolio to address a full spectrum of production needs and extend tool lifetime. Our 200mm equipment supports market inflections and new technology for a broad variety of devices including analog, power, and MEMS. | | |

| Automation Software Our SmartFactory® automation software portfolio coordinates and streamlines every aspect of a factory (the processes, equipment and people) to provide competitive advantage to customers. | | |

Display and Adjacent Markets

The Display and Adjacent Markets segment offers a variety of technologies and products, including:

| Display and Adjacent Markets Technologies | | | | | | Product(s) | | |

| Array Test LCD display substrates are inspected at many stages of production to maximize yield, minimize scrap, optimize equipment utilization, and monitor manufacturing processes. At the completion of the array stage, the performance of the millions of individual pixels on each display is tested. | | | | | | Electron Beam Array Tester | | |

| Defect Review Defects are identified during inspection steps and reviewed by a scanning electron microscope and other analyses to determine defect root cause and composition. | | | | | | Electron Beam Review (EBR) | | |

The information set forth under “Legal Matters” in Note [removed: 15] [added: 13] of Notes to Consolidated Financial Statements is incorporated herein by reference.

For the fiscal year ended October [removed: 29, 2023][added: 27, 2024]

[removed: ][added: ]

Aggregate market value of the voting stock held by non-affiliates of the registrant as of April [removed: 30, 2023,] [added: 28, 2024,] based upon the closing sale price reported by the [removed: NASDAQ] [added: Nasdaq] Global Select Market on that date: [removed: $94,685,528,382][added: $167,928,935,720]

Number of shares outstanding of the registrant’s Common Stock, $0.01 par value, as of December [removed: 8, 2023: 831,067,105][added: 6, 2024: 813,684,638]

Portions of Part III will be provided in accordance with Instruction G(3) to Form 10-K no later than February [removed: 26, 2024.][added: 24, 2025.]

FORM 10-K FOR THE FISCAL YEAR ENDED OCTOBER [removed: 29, 2023][added: 27, 2024]

| Item 1: | | | [removed: [Business](#ie2b691bf111b412b887a517a90c136da_16)] [added: [Business](#i0d6bd66919e44bd99f34a0fc0f2df298_16)] | | | [removed: [4](#ie2b691bf111b412b887a517a90c136da_16)] [added: [4](#i0d6bd66919e44bd99f34a0fc0f2df298_16)] | | |

| Item 1A: | | | [Risk [removed: Factors](#ie2b691bf111b412b887a517a90c136da_19)] [added: Factors](#i0d6bd66919e44bd99f34a0fc0f2df298_19)] | | | [removed: [16](#ie2b691bf111b412b887a517a90c136da_19)] [added: [13](#i0d6bd66919e44bd99f34a0fc0f2df298_19)] | | |

| Item 1B: | | | [Unresolved Staff [removed: Comments](#ie2b691bf111b412b887a517a90c136da_22)] [added: Comments](#i0d6bd66919e44bd99f34a0fc0f2df298_22)] | | | [removed: [29](#ie2b691bf111b412b887a517a90c136da_22)] [added: [27](#i0d6bd66919e44bd99f34a0fc0f2df298_22)] | | |

| Item 2: | | | [removed: [Properties](#ie2b691bf111b412b887a517a90c136da_25)] [added: [Properties](#i0d6bd66919e44bd99f34a0fc0f2df298_25)] | | | [removed: [30](#ie2b691bf111b412b887a517a90c136da_25)] [added: [28](#i0d6bd66919e44bd99f34a0fc0f2df298_25)] | | |

| Item 3: | | | [Legal [removed: Proceedings](#ie2b691bf111b412b887a517a90c136da_28)] [added: Proceedings](#i0d6bd66919e44bd99f34a0fc0f2df298_28)] | | | [removed: [31](#ie2b691bf111b412b887a517a90c136da_28)] [added: [29](#i0d6bd66919e44bd99f34a0fc0f2df298_28)] | | |

| Item 4: | | | [Mine Safety [removed: Disclosures](#ie2b691bf111b412b887a517a90c136da_31)] [added: Disclosures](#i0d6bd66919e44bd99f34a0fc0f2df298_31)] | | | [removed: [31](#ie2b691bf111b412b887a517a90c136da_31)] [added: [29](#i0d6bd66919e44bd99f34a0fc0f2df298_31)] | | |

| Item 5: | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ie2b691bf111b412b887a517a90c136da_37)] [added: Securities](#i0d6bd66919e44bd99f34a0fc0f2df298_37)] | | | [removed: [32](#ie2b691bf111b412b887a517a90c136da_37)] [added: [30](#i0d6bd66919e44bd99f34a0fc0f2df298_37)] | | |

| Item 6: | | | [removed: [\[Reserved\]](#ie2b691bf111b412b887a517a90c136da_40)] [added: [\[Reserved\]](#i0d6bd66919e44bd99f34a0fc0f2df298_40)] | | | [removed: [33](#ie2b691bf111b412b887a517a90c136da_40)] [added: [31](#i0d6bd66919e44bd99f34a0fc0f2df298_40)] | | |

| Item 7: | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ie2b691bf111b412b887a517a90c136da_43)] [added: Operations](#i0d6bd66919e44bd99f34a0fc0f2df298_43)] | | | [removed: [34](#ie2b691bf111b412b887a517a90c136da_43)] [added: [32](#i0d6bd66919e44bd99f34a0fc0f2df298_43)] | | |

| Item 7A: | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ie2b691bf111b412b887a517a90c136da_64)] [added: Risk](#i0d6bd66919e44bd99f34a0fc0f2df298_61)] | | | [removed: [50](#ie2b691bf111b412b887a517a90c136da_64)] [added: [44](#i0d6bd66919e44bd99f34a0fc0f2df298_61)] | | |

| Item 8: | | | [Financial Statements and Supplementary [removed: Data](#ie2b691bf111b412b887a517a90c136da_67)] [added: Data](#i0d6bd66919e44bd99f34a0fc0f2df298_64)] | | | [removed: [50](#ie2b691bf111b412b887a517a90c136da_67)] [added: [44](#i0d6bd66919e44bd99f34a0fc0f2df298_64)] | | |

| Item 9: | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ie2b691bf111b412b887a517a90c136da_70)] [added: Disclosure](#i0d6bd66919e44bd99f34a0fc0f2df298_67)] | | | [removed: [50](#ie2b691bf111b412b887a517a90c136da_70)] [added: [44](#i0d6bd66919e44bd99f34a0fc0f2df298_67)] | | |

| Item 9A: | | | [Controls and [removed: Procedures](#ie2b691bf111b412b887a517a90c136da_73)] [added: Procedures](#i0d6bd66919e44bd99f34a0fc0f2df298_70)] | | | [removed: [51](#ie2b691bf111b412b887a517a90c136da_73)] [added: [45](#i0d6bd66919e44bd99f34a0fc0f2df298_70)] | | |

| Item 9B: | | | [Other [removed: Information](#ie2b691bf111b412b887a517a90c136da_76)] [added: Information](#i0d6bd66919e44bd99f34a0fc0f2df298_73)] | | | [removed: [51](#ie2b691bf111b412b887a517a90c136da_76)] [added: [45](#i0d6bd66919e44bd99f34a0fc0f2df298_73)] | | |

| Item 9C: | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#ie2b691bf111b412b887a517a90c136da_79)] [added: Inspections](#i0d6bd66919e44bd99f34a0fc0f2df298_76)] | | | [removed: [51](#ie2b691bf111b412b887a517a90c136da_79)] [added: [45](#i0d6bd66919e44bd99f34a0fc0f2df298_76)] | | |

| Item 10: | | | [Directors, Executive Officers and Corporate [removed: Governance](#ie2b691bf111b412b887a517a90c136da_88)] [added: Governance](#i0d6bd66919e44bd99f34a0fc0f2df298_85)] | | | [removed: [52](#ie2b691bf111b412b887a517a90c136da_88)] [added: [46](#i0d6bd66919e44bd99f34a0fc0f2df298_85)] | | |

| Item 11: | | | [Executive [removed: Compensation](#ie2b691bf111b412b887a517a90c136da_91)] [added: Compensation](#i0d6bd66919e44bd99f34a0fc0f2df298_88)] | | | [removed: [52](#ie2b691bf111b412b887a517a90c136da_91)] [added: [46](#i0d6bd66919e44bd99f34a0fc0f2df298_88)] | | |

| Item 12: | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ie2b691bf111b412b887a517a90c136da_94)] [added: Matters](#i0d6bd66919e44bd99f34a0fc0f2df298_91)] | | | [removed: [53](#ie2b691bf111b412b887a517a90c136da_94)] [added: [47](#i0d6bd66919e44bd99f34a0fc0f2df298_91)] | | |

| Item 13: | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ie2b691bf111b412b887a517a90c136da_97)] [added: Independence](#i0d6bd66919e44bd99f34a0fc0f2df298_94)] | | | [removed: [54](#ie2b691bf111b412b887a517a90c136da_97)] [added: [48](#i0d6bd66919e44bd99f34a0fc0f2df298_94)] | | |

| Item 14: | | | [Principal Accounting Fees and [removed: Services](#ie2b691bf111b412b887a517a90c136da_100)] [added: Services](#i0d6bd66919e44bd99f34a0fc0f2df298_97)] | | | [removed: [54](#ie2b691bf111b412b887a517a90c136da_100)] [added: [48](#i0d6bd66919e44bd99f34a0fc0f2df298_97)] | | |

| Item 15: | | | [Exhibits, Financial Statement [removed: Schedules](#ie2b691bf111b412b887a517a90c136da_106)] [added: Schedules](#i0d6bd66919e44bd99f34a0fc0f2df298_103)] | | | [removed: [55](#ie2b691bf111b412b887a517a90c136da_106)] [added: [49](#i0d6bd66919e44bd99f34a0fc0f2df298_103)] | | |

| Item 16: | | | [Form 10-K [removed: Summary](#ie2b691bf111b412b887a517a90c136da_106)] [added: Summary](#i0d6bd66919e44bd99f34a0fc0f2df298_103)] | | | [removed: [55](#ie2b691bf111b412b887a517a90c136da_106)] [added: [49](#i0d6bd66919e44bd99f34a0fc0f2df298_103)] | | |

| Item 1C: | | | [Cybersecurity](#i0d6bd66919e44bd99f34a0fc0f2df298_1360) | | | [27](#i0d6bd66919e44bd99f34a0fc0f2df298_1360) | | |

| | | | [Signatures](#i0d6bd66919e44bd99f34a0fc0f2df298_181) | | | [88](#i0d6bd66919e44bd99f34a0fc0f2df298_181) | | |

As used herein, the terms “we,” “us,” and “our” refer to Applied Materials, Inc. and its subsidiaries.

This report contains forward-looking statements that involve a number of risks and uncertainties.

| | | | [Signatures](#ie2b691bf111b412b887a517a90c136da_187) | | | [102](#ie2b691bf111b412b887a517a90c136da_187) | | |

Risk Management and Strategy

We have implemented processes for assessing, identifying and managing material risks from cybersecurity threats as part of our cybersecurity risk management program.

This program includes processes for continuous cybersecurity risk and advanced persistent cybersecurity threat monitoring; cybersecurity attack, vulnerability and cloud security management; and penetration testing.

Our cybersecurity risk management program includes a cybersecurity incident response plan and escalation protocols; cybersecurity and data protection policies and training to our employees; a supply chain cybersecurity program to increase awareness, assess supplier security controls, help improve supplier security controls and manage security incidents; a program to protect company, customer and supplier intellectual property by operationalizing strategy, policy and awareness; a privacy and data protection program to keep pace with rapidly evolving global data laws and regulations as well as emerging technologies; engagement of third-party auditors to help assure the effectiveness of internal controls, including cybersecurity controls; and partnership with industry groups, government agencies and third-party experts in an effort to continuously improve our cybersecurity risk management program.

We conduct assessments based on the National Institute of Standards and Technology Cybersecurity (“NIST”) Framework to evaluate our program, and we engage third-parties for assistance and to independently assess, proactively monitor, and provide an external view of our cybersecurity program.

We conduct risk assessments and tabletop exercises to evaluate the effectiveness of our systems and processes in addressing cybersecurity threats, including threats associated with our use of third-party service providers, and to identify areas for improvements.

Our cybersecurity risk management program is integrated with our enterprise risk management (“ERM”) program, and information about cybersecurity risks and our cybersecurity risk management program is reviewed as part of our ERM program, sharing common risk governance and reporting processes that apply across our ERM program.

While we are not aware of having directly experienced a cybersecurity incident that has materially impacted our business, financial condition or results of operations, we face risks from cybersecurity threats that, if realized, could reasonably likely materially affect us, our business strategy, results of operations, or financial condition.

*See “Risk Factors - Operational and Financial Risks – We are exposed to cybersecurity threats and incidents” for additional information about cybersecurity related risks.*

Governance

Our Board of Directors is responsible for overseeing the assessment of major risks facing us, and its Audit Committee oversees our ERM program, including oversight of cybersecurity risks and of our cybersecurity risk management program.

The Audit Committee receives quarterly reports from management on our cybersecurity risks and cybersecurity risk management program, and our management regularly updates the Chair of the Audit Committee regarding cybersecurity incidents where appropriate in accordance with our cybersecurity incident response plan and escalation protocols.

The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity, and management reports to the full Board on our cybersecurity risks and cybersecurity risk management program at least annually.

Our management has day-to-day responsibility for assessing and managing material risks from cybersecurity threats, including implementing risk mitigation plans, processes and controls, and managing our cybersecurity risk management program.

Our Chief Information Security Officer (“CISO”), who has more than 20 years of experience in information security management, is primarily responsible for managing our cybersecurity risk management program, cybersecurity incident response plan and escalation protocols, and reports at least quarterly to the Audit Committee and at least annually to the full Board on our cybersecurity, data and intellectual property security programs, policies, risks and controls.

The CISO reports to our Chief Information Officer (“CIO”), who has more than 30 years of experience in information technology and is responsible for administering secure and scalable security infrastructure.

The CIO reports to our Chief Digital Officer, who has more than 37 years of experience in information technology.

Our management team’s efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents are informed by reviews with our information technology security teams, receipt of threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, periodic assessments against the NIST Framework and through alerts and reports produced by security tools deployed in our information technology environment.

Our headquarters [removed: offices] are in Santa Clara, California.

[removed: Products in the Display and Adjacent Markets segment] [added: Our products] are manufactured primarily in [removed: Tainan,] [added: the United States, Singapore, Israel and] Taiwan.

We [removed: also] own and lease facilities throughout the world for use as offices, [removed: plants and] [added: manufacturing facilities,] warehouses, and research and development centers, primarily in the United States, Taiwan, [added: Singapore,] China, Israel and [removed: Singapore.][added: India.]

We also own a total of approximately 279 acres of buildable land [added: primarily] in the United [removed: States, Israel, Italy and India] [added: States] that could accommodate additional [removed: building space.][added: facilities.]

As of October 27, 2024, we owned and leased approximately 9.0 million square feet and 4.9 million square feet of space, respectively.

Information concerning our properties is set forth below:

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (Square feet in thousands) | | | United States | | | | | | Other Countries | | | | | | Total | | |

| Owned | | | 5,627 | | | | | | 2,931 | | | | | | 8,558 | | |

| Leased | | | 2,733 | | | | | | 1,909 | | | | | | 4,642 | | |

| Total | | | 8,360 | | | | | | 4,840 | | | | | | 13,200 | | |

Products in Semiconductor Systems are manufactured primarily in Singapore; Austin, Texas; Gloucester, Massachusetts; and Rehovot, Israel.

Remanufactured equipment products in the Applied Global Services segment are produced primarily in Austin, Texas.

As of December [removed: 8, 2023,] [added: 6, 2024,] there were [removed: 2,755] [added: 2,692] registered holders of our common stock.

Information regarding quarterly cash dividends declared on our common stock during fiscal [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021] [added: 2022] may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition, Liquidity and Capital Resources”.

The performance graph below shows the five-year cumulative total stockholder return on our common stock during the period from October [removed: 28, 2018] [added: 27, 2019] through October [removed: 29, 2023.][added: 27, 2024.]

The comparison assumes $100 was invested on October [removed: 28, 2018] [added: 27, 2019] in our common stock and in each of the foregoing indices and assumes reinvestment of dividends, if any.

The graph below assumes that the value of the investment in our common stock and in each of the indexes was $100 at October [removed: 28, 2018,] [added: 27, 2019,] and that all dividends were reinvested.

[removed: ][added: ]

Copyright© [removed: 2023] [added: 2024] Standard & Poor’s, a division of S&P global.

| | | | [removed: 10/28/2018] [added: 10/27/2019] | | | | | | [removed: 10/27/2019] [added: 10/25/2020] | | | | | | [removed: 10/25/2020] [added: 10/31/2021] | | | | | | [removed: 10/31/2021] [added: 10/30/2022] | | | | | | [removed: 10/30/2022] [added: 10/29/2023] | | | | | | [removed: 10/29/2023] [added: 10/27/2024] | | |

At October [removed: 29, 2023,] [added: 27, 2024,] approximately [removed: $12.7] [added: $8.9] billion remained available for future stock repurchases under the repurchase program.

The following table provides information as of October [removed: 29, 2023] [added: 27, 2024] with respect to the shares of common stock repurchased by us during the fourth quarter of fiscal [removed: 2023] [added: 2024] pursuant to the foregoing Board authorization.

[removed: *Effective January 1, 2023, amounts] [added: *Amounts] include the 1% surcharge on stock repurchases under the Inflation Reduction Act’s excise tax.

| Applied Materials | | | 100.00 | | | | | | 110.92 | | | | | | 250.74 | | | | | | 166.02 | | | | | | 245.26 | | | | | | 351.03 | | |

| S&P 500 Index | | | 100.00 | | | | | | 116.84 | | | | | | 157.60 | | | | | | 135.57 | | | | | | 145.49 | | | | | | 208.23 | | |

| PHLX Semiconductor Index | | | 100.00 | | | | | | 145.68 | | | | | | 215.80 | | | | | | 154.30 | | | | | | 207.26 | | | | | | 338.18 | | |

| (July 29, 2024 to August 25, 2024) | | | 1.5 | | | | | | $ | 195.93 | | | | | $ | 292 | | | | | 1.5 | | | | | | $ | 10,030 | |

| (August 26, 2024 to September 22, 2024) | | | 2.6 | | | | | | $ | 187.33 | | | | | 492 | | | | | | 2.6 | | | | | | $ | 9,538 | |

| (September 23, 2024 to October 27, 2024) | | | 3.5 | | | | | | $ | 191.41 | | | | | 669 | | | | | | 3.5 | | | | | | $ | 8,869 | |

| Total | | | 7.6 | | | | | | $ | 190.89 | | | | | $ | 1,453 | | | | | 7.6 | | | | | | | | |

| Applied Materials | | | 100.00 | | | | | | 175.74 | | | | | | 194.93 | | | | | | 440.65 | | | | | | 291.76 | | | | | | 431.02 | | |

| S&P 500 Index | | | 100.00 | | | | | | 116.03 | | | | | | 135.57 | | | | | | 182.86 | | | | | | 157.30 | | | | | | 168.81 | | |

| PHLX Semiconductor Index | | | 100.00 | | | | | | 145.93 | | | | | | 212.58 | | | | | | 314.91 | | | | | | 225.17 | | | | | | 302.44 | | |

| (July 31, 2023 to August 27, 2023) | | | 0.3 | | | | | | $ | 147.17 | | | | | $ | 50 | | | | | 0.3 | | | | | | $ | 13,375 | |

| (August 28, 2023 to September 24, 2023) | | | 1.6 | | | | | | $ | 144.00 | | | | | 226 | | | | | | 1.6 | | | | | | $ | 13,149 | |

| (September 25, 2023 to October 29, 2023) | | | 3.2 | | | | | | $ | 136.43 | | | | | 429 | | | | | | 3.2 | | | | | | $ | 12,720 | |

| Total | | | 5.1 | | | | | | $ | 139.50 | | | | | $ | 705 | | | | | 5.1 | | | | | | | | |

Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of October [removed: 29, 2023.][added: 27, 2024.]

KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Form 10-K and, as part of the audit, has issued a report, included herein, on the effectiveness of our internal control over financial reporting as of October [removed: 29, 2023.][added: 27, 2024.]

During the fourth quarter of fiscal [removed: 2023,] [added: 2024,] there were no changes in the internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the three months ended October [removed: 29, 2023,] [added: 27, 2024,] no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

Except for the information regarding executive officers required by Item 401 of Regulation S-K (which is included in Part I, Item 1 of this Annual Report on Form 10-K, under “Information about our Executive [removed: Officers”)] [added: Officers”),] and code of ethics [added: and insider trading policy] (which [removed: is] [added: are] set forth below), the information required by this item will be provided in accordance with Instruction G(3) to Form 10-K no later than February [removed: 26, 2024.][added: 24, 2025.]

We have adopted an Insider Trading Policy governing the purchase, sale, and other dispositions of our securities by our directors, officers, employees and other individuals associated with us that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to us.

A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

The information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later than February [removed: 26, 2024.][added: 24, 2025.]

Except for the information regarding securities authorized for issuance under equity compensation plans (which is set forth below), the information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later than February [removed: 26, 2024.][added: 24, 2025.]

The following table summarizes information with respect to equity awards under our equity compensation plans as of October [removed: 29, 2023:][added: 27, 2024:]

| Equity compensation plans approved by security holders | | | [removed: 12] [added: 10] | | | | | | | | | $ | — | | | | | [removed: 37] [added: 31] | | | (3) | | |

| Total | | | [removed: 12] [added: 10] | | | | | | | | | $ | — | | | | | [removed: 37] [added: 31] | | | | | |

(1)Includes only restricted stock units and performance share units outstanding under our equity compensation plans, as no options, stock warrants or other rights were outstanding as of October [removed: 29, 2023.][added: 27, 2024.]

(3)Includes [removed: 12] [added: 10] million shares of our common stock available for future issuance under the Applied Materials, Inc. Omnibus Employees’ Stock Purchase Plan.

Of these [removed: 12] [added: 10] million shares, 1 million are subject to purchase during the purchase period in effect as of October [removed: 29, 2023.][added: 27, 2024.]

The Applied Materials Profit Sharing Scheme was adopted effective July 3, 1996 [added: and amended from time] to [added: time to] enable employees of Applied Materials Ireland Limited and its participating subsidiaries to purchase our common stock at 100% of fair market value on the purchase date.

The information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later than February [removed: 26, 2024.][added: 24, 2025.]

The information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later than February [removed: 26, 2024.][added: 24, 2025.]

| | | | [removed: [Reports] [added: [Report] of Independent Registered Public Accounting [removed: Firm](#ie2b691bf111b412b887a517a90c136da_109)] [added: Firm](#i0d6bd66919e44bd99f34a0fc0f2df298_106)] | | | [removed: [56](#ie2b691bf111b412b887a517a90c136da_109)] [added: [50](#i0d6bd66919e44bd99f34a0fc0f2df298_106)] | | |

| | | | [Consolidated Statements of [removed: Operations](#ie2b691bf111b412b887a517a90c136da_115)] [added: Operations](#i0d6bd66919e44bd99f34a0fc0f2df298_112)] | | | [removed: [59](#ie2b691bf111b412b887a517a90c136da_115)] [added: [52](#i0d6bd66919e44bd99f34a0fc0f2df298_112)] | | |

| | | | [Consolidated Statements of Comprehensive [removed: Income](#ie2b691bf111b412b887a517a90c136da_118)] [added: Income](#i0d6bd66919e44bd99f34a0fc0f2df298_115)] | | | [removed: [60](#ie2b691bf111b412b887a517a90c136da_118)] [added: [53](#i0d6bd66919e44bd99f34a0fc0f2df298_115)] | | |

| | | | [Consolidated Balance [removed: Sheets](#ie2b691bf111b412b887a517a90c136da_121)] [added: Sheets](#i0d6bd66919e44bd99f34a0fc0f2df298_118)] | | | [removed: [61](#ie2b691bf111b412b887a517a90c136da_121)] [added: [54](#i0d6bd66919e44bd99f34a0fc0f2df298_118)] | | |

| | | | [Consolidated Statements of Stockholders’ [removed: Equity](#ie2b691bf111b412b887a517a90c136da_124)] [added: Equity](#i0d6bd66919e44bd99f34a0fc0f2df298_121)] | | | [removed: [62](#ie2b691bf111b412b887a517a90c136da_124)] [added: [55](#i0d6bd66919e44bd99f34a0fc0f2df298_121)] | | |

| | | | [Consolidated Statements of Cash [removed: Flows](#ie2b691bf111b412b887a517a90c136da_127)] [added: Flows](#i0d6bd66919e44bd99f34a0fc0f2df298_124)] | | | [removed: [63](#ie2b691bf111b412b887a517a90c136da_127)] [added: [56](#i0d6bd66919e44bd99f34a0fc0f2df298_124)] | | |

| | | | [Notes to Consolidated Financial [removed: Statements](#ie2b691bf111b412b887a517a90c136da_130)] [added: Statements](#i0d6bd66919e44bd99f34a0fc0f2df298_127)] | | | [removed: [64](#ie2b691bf111b412b887a517a90c136da_130)] [added: [57](#i0d6bd66919e44bd99f34a0fc0f2df298_127)] | | |

| | | | [The exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this Annual Report on Form [removed: 10-K](#ie2b691bf111b412b887a517a90c136da_184)] [added: 10-K](#i0d6bd66919e44bd99f34a0fc0f2df298_178)] | | | [removed: [99](#ie2b691bf111b412b887a517a90c136da_184)] [added: [85](#i0d6bd66919e44bd99f34a0fc0f2df298_178)] | | |

We have audited the accompanying consolidated balance sheets of Applied Materials, Inc. and subsidiaries (the Company) as of October [removed: 29, 2023] [added: 27, 2024] and October [removed: 30, 2022,] [added: 29, 2023,] the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended October [removed: 29, 2023,] [added: 27, 2024,] and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements [added: referred to above] present fairly, in all material respects, the financial position of the Company as of October [removed: 29, 2023] [added: 27, 2024] and October [removed: 30, 2022,] [added: 29, 2023,] and the results of its operations and its cash flows for each of the years in the three-year period ended October [removed: 29, 2023,] [added: 27, 2024,] in conformity with U.S. generally accepted accounting principles.

We also have [removed: audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),] [added: audited] the Company’s internal control over financial reporting as of October [removed: 29, 2023,] [added: 27, 2024,] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission, and our report dated December 15, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.][added: Commission.]

*Basis for [removed: Opinion*][added: Opinions*]

Our responsibility is to express an opinion on [removed: these] [added: the Company’s] consolidated financial statements [added: and an opinion on the Company’s internal control over financial reporting] based on our audits.

We are a public accounting firm registered with the [removed: PCAOB] [added: Public Company Accounting Oversight Board (United States) (PCAOB)] and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Those standards require that we plan and perform the [removed: audit] [added: audits] to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or [removed: fraud.][added: fraud, and whether effective internal control over financial reporting was maintained in all material respects.]

Our audits [added: of the consolidated financial statements] included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We believe that our audits provide a reasonable basis for our [removed: opinion.][added: opinions.]

[removed: *Opinion] [added: *Opinions] on [added: the Consolidated* *Financial Statements and] Internal Control Over Financial Reporting*

[removed: We have audited Applied Materials, Inc. and subsidiaries’ (the Company)] [added: Also in our opinion, the Company maintained, in all material respects, effective] internal control over financial reporting as of October [removed: 29, 2023,] [added: 27, 2024] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company’s management is responsible for [added: these consolidated financial statements, for] maintaining effective internal control over financial [removed: reporting] [added: reporting,] and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our [removed: audit] [added: audits] also included performing such other procedures as we considered necessary in the circumstances.

| Fiscal Year | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Net [removed: sales] [added: revenue] | | | $ | [removed: 26,517] [added: 27,176] | | | | | $ | [removed: 25,785] [added: 26,517] | | | | | $ | [removed: 23,063] [added: 25,785] | |

| Cost of products sold | | | [removed: 14,133] [added: 14,279] | | | | | | [removed: 13,792] [added: 14,133] | | | | | | [removed: 12,149] [added: 13,792] | | |

| Gross profit | | | [removed: 12,384] [added: 12,897] | | | | | | [removed: 11,993] [added: 12,384] | | | | | | [removed: 10,914] [added: 11,993] | | |

| Research, development and engineering | | | [removed: 3,102] [added: 3,233] | | | | | | [removed: 2,771] [added: 3,102] | | | | | | [removed: 2,485] [added: 2,771] | | |

| Marketing and selling | | | [removed: 776] [added: 836] | | | | | | [removed: 703] [added: 776] | | | | | | [removed: 609] [added: 703] | | |

| General and administrative | | | [removed: 852] [added: 961] | | | | | | [removed: 735] [added: 852] | | | | | | [removed: 620] [added: 735] | | |

| Severance and related charges | | | — | | | | | | [removed: (4)] [added: —] | | | | | | [removed: 157] [added: (4)] | | |

| Total operating expenses | | | [removed: 4,730] [added: 5,030] | | | | | | [removed: 4,205] [added: 4,730] | | | | | | [removed: 4,025] [added: 4,205] | | |

| Income from operations | | | [removed: 7,654] [added: 7,867] | | | | | | [removed: 7,788] [added: 7,654] | | | | | | [removed: 6,889] [added: 7,788] | | |

| Interest expense | | | [removed: 238] [added: 247] | | | | | | [removed: 228] [added: 238] | | | | | | [removed: 236] [added: 228] | | |

| Interest and other income (expense), net | | | [removed: 300] [added: 532] | | | | | | [removed: 39] [added: 300] | | | | | | [removed: 118] [added: 39] | | |

| Income before income taxes | | | [removed: 7,716] [added: 8,152] | | | | | | [removed: 7,599] [added: 7,716] | | | | | | [removed: 6,771] [added: 7,599] | | |

| Provision for income taxes | | | [removed: 860] [added: 975] | | | | | | [removed: 1,074] [added: 860] | | | | | | [removed: 883] [added: 1,074] | | |

| Net income | | | $ | [removed: 6,856] [added: 7,177] | | | | | $ | [removed: 6,525] [added: 6,856] | | | | | $ | [removed: 5,888] [added: 6,525] | |

| Basic | | | $ | [removed: 8.16] [added: 8.68] | | | | | $ | [removed: 7.49] [added: 8.16] | | | | | $ | [removed: 6.47] [added: 7.49] | |

| Diluted | | | $ | [removed: 8.11] [added: 8.61] | | | | | $ | [removed: 7.44] [added: 8.11] | | | | | $ | [removed: 6.40] [added: 7.44] | |

| Basic | | | [removed: 840] [added: 827] | | | | | | [removed: 871] [added: 840] | | | | | | [removed: 910] [added: 871] | | |

| Diluted | | | [removed: 845] [added: 834] | | | | | | [removed: 877] [added: 845] | | | | | | [removed: 919] [added: 877] | | |

| Change in unrealized gain (loss) on available-for-sale investments | | | [removed: 25] [added: 43] | | | | | | [removed: (74)] [added: 25] | | | | | | [removed: (21)] [added: (74)] | | |

| Change in unrealized net loss on derivative instruments | | | [removed: (66)] [added: 31] | | | | | | [removed: 51] [added: (66)] | | | | | | [removed: 30] [added: 51] | | |

| Change in defined and postretirement benefit plans | | | [removed: 26] [added: (25)] | | | | | | [removed: 81] [added: 26] | | | | | | [removed: 30] [added: 81] | | |

| Other comprehensive income (loss), net of tax | | | [removed: (15)] [added: 49] | | | | | | [removed: 58] [added: (15)] | | | | | | [removed: 39] [added: 58] | | |

| Comprehensive income | | | $ | [removed: 6,841] [added: 7,226] | | | | | $ | [removed: 6,583] [added: 6,841] | | | | | $ | [removed: 5,927] [added: 6,583] | |

| | | | October [removed: 29, 2023] [added: 27, 2024] | | | | | | October [removed: 30, 2022] [added: 29, 2023] | | |

| Cash and cash equivalents | | | $ | [added: 8,022 | | | | | $ |] 6,132 | | | | | $ | 1,995 | |

| Short-term investments | | | [removed: 737] [added: 1,449] | | | | | | [removed: 586] [added: 737] | | |

*Evaluation of sufficiency of audit evidence over revenue*

As discussed in Notes 1 and 14 to the consolidated financial statements, the Company recorded $27,176 million in net revenue, for the year ended October 27, 2024.

The Company generates revenue by providing manufacturing equipment, services and software to customers in the semiconductor, display and related industries.

The Company’s process to account for and recognize revenue differs across revenue streams.

We identified the evaluation of the sufficiency of audit evidence obtained over net revenue as a critical audit matter.

Evaluating the sufficiency of audit evidence required subjective auditor judgment due to the number of revenue streams and separate processes to account for and recognize revenue.

This included determining the nature and extent of audit evidence obtained over each revenue stream.

We applied auditor judgment to determine the revenue streams over which procedures were performed as well as the nature and extent of such procedures.

For revenue streams where procedures were performed, we:

- evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue recognition processes, including the Company’s controls over the accurate recording of revenue.

- evaluated the Company’s revenue recognition accounting policies.

- evaluated, for a sample of revenue transactions, (1) the accounting for consistency with the Company’s accounting policies, as applicable, including timing of revenue recognition, and (2) the recorded amounts by comparing them for consistency to underlying documentation, including the customer contracts.

In addition, we evaluated the sufficiency of audit evidence obtained by assessing the results of the procedures performed, including the appropriateness of the nature and extent of audit effort over revenue

| Fiscal Year | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

| Net income | | | $ | 7,177 | | | | | $ | 6,856 | | | | | $ | 6,525 | |

| Balance at October 27, 2024 | | | 818 | | | | | | $ | 8 | | | | | $ | 9,660 | | | | | $ | 49,651 | | | | | 1,211 | | | | | | $ | (40,150) | | | | | $ | (168) | | | | | $ | 19,001 | |

| Fiscal Year | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

| Net income | | | $ | 7,177 | | | | | $ | 6,856 | | | | | $ | 6,525 | |

| Debt borrowings, net of issuance costs | | | 694 | | | | | | — | | | | | | — | | |

Note 1 Summary of Significant Accounting Policies and Recently Adopted Accounting Standards

Certain prior-year amounts have been reclassified to conform to current-year presentation.

The estimated useful lives for the following assets remained unchanged from fiscal 2023: software, 3 to 5 years; and furniture, fixtures and other equipment, 3 to 5 years.

Based on the net carrying amounts of assets in use as of the end of fiscal 2023, the impact of this change was a reduction of $128 million in depreciation expense during fiscal 2024, and an increase of $0.12 in both basic and diluted earnings per share for fiscal 2024.

*Acquisitions*

We account for the acquisition of a business using the acquisition method of accounting.

We allocate the fair value of the purchase consideration of our acquisitions to the tangible assets, liabilities, and intangible assets acquired, including in-process technology, based on their estimated fair values.

No goodwill impairment was recorded during fiscal 2024, 2023 and 2022.

The balances of our intangible assets were not material as of October 27, 2024 or October 29, 2023 and amortization expenses were not material for fiscal 2024, 2023 and 2022.

We assess the recoverability of the assets by comparing the undiscounted future cash flow expected to result from the use and eventual disposal of the assets to their respective carrying value.

If not recoverable, we recognize an impairment loss to the excess of the carrying value over the fair value of those assets, and reduce the carrying value of the assets to their respective fair value.

Fair value is determined by available market valuations, when available and appropriate, or by discounted cash flows.

The balances of our operating leases right-of-use assets and liabilities were not material as of October 27, 2024 or October 29, 2023.

Operating lease cost for fiscal 2024, 2023 and 2022 was not material.

In certain circumstances we may receive deposits from customers for future deliverables.

Our warranty reserves balances and the components of changes in our warranty reserves were not material for all periods presented.

During fiscal 2024, the adoption of this guidance had no impact to our consolidated financial statements as there were no acquisitions during the year.

| Fiscal Year | | | 2024 | | | | | | 2023 | | | | | | 2022 | | |

| Net income | | | $ | 7,177 | | | | | $ | 6,856 | | | | | $ | 6,525 | |

| Total equity investments | | | 798 | | | | | | 243 | | | | | | 27 | | | | | | 1,014 | | |

| Total | | | $ | 4,022 | | | | | $ | 4,236 | |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

Applied Materials, Inc.:

*Opinion on the Consolidated* *Financial Statements*

These consolidated financial statements are the responsibility of the Company’s management.

*Evaluation of net realizable value adjustments to inventories for excess or obsolescence*

As discussed in notes 1 and 8 to the consolidated financial statements, the Company has inventories with a carrying value of $5,725 million as of October 29, 2023.

The Company adjusts inventory carrying value for estimated excess or obsolescence equal to the difference between cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions.

If actual demand were to be substantially lower than estimated, there could be a significant adverse impact on the carrying value of inventories and results of operations.

We identified the evaluation of net realizable value adjustments to certain inventories for excess or obsolescence as a critical audit matter.

Evaluation of the Company’s estimates regarding forecasted sales and inventory consumption involved a high degree of auditor judgment.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process for determining net realizable value adjustments for inventory excess or obsolescence, including controls related to estimating forecasted sales and inventory consumption.

We evaluated certain inventories for excess or obsolescence by comparing the Company’s sales and inventory consumption forecast to historical sales, historical inventory usage, known customer orders, and industry outlook reports.

In addition, for certain inventories, we compared the Company’s historical estimates of net realizable value adjustments for excess and obsolescence to the actual physical inventory disposals to evaluate the Company’s ability to accurately estimate the net realizable value adjustments.

| | | |

| --- | --- | --- |

| /S/ KPMG LLP | | |

| KPMG LLP | | |

Santa Clara, California

December 15, 2023

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 29, 2023, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 29, 2023 and October 30, 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended October 29, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated December 15, 2023 expressed an unqualified opinion on those consolidated financial statements.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

We believe that our audit provides a reasonable basis for our opinion.

APPLIED MATERIALS, INC.

| | | | | | | | | | | | | | | | | | |

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| Deal termination fee | | | — | | | | | | — | | | | | | 154 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at October 25, 2020 | | | 914 | | | | | | $ | 9 | | | | | $ | 7,904 | | | | | $ | 27,209 | | | | | 1,091 | | | | | | $ | (24,245) | | | | | $ | (299) | | | | | $ | 10,578 | |

The first fiscal quarter of 2021 contained 14 weeks, while the second, third and fourth quarters of fiscal 2021 contained 13 weeks.

*Allowance for Credit Losses*

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The estimated useful lives of certain buildings and improvements will increase by 5 years.

The estimated range of useful lives of demonstration and manufacturing equipment will increase to between 5 to 8 years.

Based on the carrying amount of the assets included in property, plant and equipment, net in our Consolidated Balance Sheet as of October 29, 2023, we currently estimate this change will increase income from operations before income taxes in fiscal 2024 by approximately $128 million as a result of the reduction in depreciation expense.