應用材料公司Applied Materials Inc. (AMAT) 2017年年度報告「NASDAQ」.pdf

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1、1720annual reportFOLLOW US ONLINE AT:WEBSITE:APPLIEDMATERIALS.COMBLOG:BLOG.APPLIEDMATERIALS.COMAPPLIED VENTURES,LLC:APPLIEDVENTURES.COMapplied materials 2017annual report Dear Fellow Shareholders,On November 10,2017,Applied Materials celebrated the50th anniversary of the founding of our company,and

2、aswe look back over the decades we see a world transformed.In 1967 few would have imagined the way that electronics,computing and displays would change how we live;andApplied Materials had a hand in making this possible.We delivered key enabling breakthroughs that fueled anindustry,and the result ha

3、s been pervasive technology that today is changing nearly every industry and society.Applied turned 50 at the same time that we are settingnew records for growth and performance.In this milestoneyear,we delivered all-time record performance farexceeding our previous highs.In fiscal 2017,we grewreven

4、ues 34 percent and operating profit at more thantwice that rate.Its Applieds breadth that sets us apart,and across the company we are firing on all cylinders.Wehave tremendous momentum and we are confident that in2018 we can deliver strong double-digit growth across oursemiconductor,display and serv

5、ice businesses.MATERIALS ENGINEERING SOLUTIONS THATTRANSFORM POSSIBILITIES INTO REALITYApplied is working at the foundation of major technologytrends and playing a larger and more valuable role in theelectronics industry.Our vision is to make possible the technology shaping the future and weve never

6、 been ina better position to do that.At Applied Materials,weengineer highly sophisticated manufacturing and process technologies used to build the worlds most complex chipsand displays.We enable our customers to build a widerange of advanced products,including larger capacity and faster memory chips

7、,more powerful processors thatconsume less energy,super high-resolution displays and flexible electronics.We are committed to being theinnovation leader that pushes the boundaries of science,technology and engineering to solve the worlds toughestmaterials engineering challenges and enable our custom

8、ers to build chips and displays in entirely new ways.NEW WAVES OF GROWTH STRONG MARKETS GETTING STRONGEROur markets are strong and getting stronger because thereis a larger set of demand drivers than we have ever seen before.Every year,smart device manufacturers race to addmore and more functionalit

9、y to their products.Internetof Things(IoT)applications are expanding rapidly anddata generation is exploding.Major inflections are takingplace in the data center and there is an emerging battle forleadership in high-performance computing and artificial intelligence(AI).At the same time,there is huge

10、 demandfor new display technology and screen sizes for TVs andmobile devices are growing considerably.We are at the start of a completely new wave of growth.IoT,big data and AI have the potential to transform entireindustries and create trillions of dollars of economic value.A broad spectrum of comp

11、anies are investing heavily inAI-related technology.From transportation and healthcareto entertainment and retail,future success is dependenton capturing,storing and understanding vast amounts ofdata.This is driving major innovations in sensors,memory,storage and especially compute which is key to t

12、urningraw data into valuable information.Leading companiesare telling us that they need a step change in computingperformance.Leadership in AI architecture is shaping up to be the biggest technology battle of our lifetimes and isgoing to be a major driver for the semiconductor roadmap.The winning ar

13、chitectures will provide large improvementsin performance and power,and Applied is in a uniqueposition to deliver the innovative materials needed to enableAI leadership.applied materials 2017annual report MAKE POSSIBLE TECHNOLOGY SHAPING THE FUTURE Our vision to“make possible”is an amazing opportuni

14、ty and a powerful responsibility.Materials engineering offerstremendous potential as a key enabler of new technology and allows us to transform possibilities into reality.And no one knows more about materials engineering thanApplied Materials.We believe that the world our children and grandchildren

15、will share will be influenced by whatwe can achieve together today,tomorrow and in the yearsto come.For Applied Materials,the opportunities areenormous,our potential has never been greater,and at50 years we are just getting started.Sincerely,BROAD CAPABILITIES TO SPEED INNOVATIONApplied has never be

16、en in a better position than we are today thanks to the breadth of our capabilities and productportfolio.Our breadth not only gives us by far the largestexposure to industry inflections,it is also creating strong pull for earlier and deeper collaborations with customers.Speed of innovation and bring

17、ing new devices to marketfaster are more important than ever for our customers.By bringing together the broadest set of enablingcapabilities,we can help customers develop winningdevices faster and more effectively.To strengthen customercollaborations at our Maydan Technology Center and intheir labs,

18、we recently aligned the organization to betterconnect our broad capabilities across the company.Thomas J.IannottiChairman of the BoardGary E.DickersonPresident andChief Executive OfficerDecember 31,2017This Annual Report contains forward-looking statements,including those regarding anticipated growt

19、h and trends in our businesses and markets,industry outlooks,technology transitions,our business and financial performance,our development of new products and technologies,and other statements that are not historical fact,and actual results could differ materially.Risk factors that could causeactual

20、 results to differ are set forth in the“Risk Factors”section of,and elsewhere in,our 2017 Form 10-K included in this report.All forward-looking statements are based on managements estimates,projections and assumptions as of the date hereof,and AppliedMaterials undertakes no obligation to update any

21、such statements.applied materials 2017annual report INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMKPMG LLPSanta Clara,CaliforniaNUMBER OF REGISTERED SHAREHOLDERS2,898(as of December 8,2017)STOCK LISTINGApplied Materials,Inc.is traded onThe Nasdaq Global Select MarketNasdaq Symbol:AMATTRANSFER AGENTMa

22、il correspondence to:ComputershareStockholder ServicesP.O.Box 505005Louisville,KY 40233-5005Send overnight correspondence to:Computershare462 South 4th Street,Suite 1600Louisville,KY 40202Online inquiries: Tel:(312)3605186 or(877)3885186Fax:(312)6014348SHAREHOLDERS INFORMATIONINVESTOR CONTACTInvesto

23、r RelationsApplied Materials,Inc.3050 Bowers AvenueP.O.Box 58039,M/S 1261Santa Clara,California 950528039Tel:(408)7485227Fax:(408)9862862Email:investor_CORPORATE HEADQUARTERSApplied Materials,Inc.3050 Bowers AvenueSanta Clara,California 950543299MAILING ADDRESS AND TELEPHONEApplied Materials,Inc.305

24、0 Bowers AvenueP.O.Box 58039Santa Clara,California 950528039Tel:(408)7275555CORPORATE WEB SITEAdditional information can be found THIS PAGE INTENTIONALLY LEFT BLANKUNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-K(Mark one)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF T

25、HE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended October 29,2017 orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number 000-06920Applied Materials,Inc.(Exact name of registrant as specified in its c

26、harter)Delaware94-1655526(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)3050 Bowers Avenue,P.O.Box 58039Santa Clara,California95052-8039(Zip Code)(Address of principal executive offices)Registrants telephone number,including area code:(408)727-5555Secu

27、rities registered pursuant to Section 12(b)of the Act:Title of Each ClassName of Each Exchange on Which RegisteredCommon Stock,par value$.01 per shareThe NASDAQ Stock Market LLCSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seas

28、oned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 o

29、r 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted el

30、ectronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such f

31、iles).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter)is not contained herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part

32、 III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company or an emerging growth company.See definitions of“large accelerated filer,”“accelerated filer,”

33、“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company)Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark

34、 if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Ye

35、s No Aggregate market value of the voting stock held by non-affiliates of the registrant as of April 28,2017,based upon the closing sale price reported by the NASDAQ Global Select Market on that date:$43,552,849,133 Number of shares outstanding of the registrants Common Stock,$.01 par value,as of De

36、cember 8,2017:1,056,340,714 DOCUMENTS INCORPORATED BY REFERENCE:Portions of Part III will be provided in accordance with Instruction G(3)to Form 10-K no later than February 26,2018.2Caution Regarding Forward-Looking StatementsThis Annual Report on Form 10-K of Applied Materials,Inc.and its subsidiar

37、ies,including“Managements Discussion and Analysis of Financial Condition and Results of Operations”in Item 7,contains forward-looking statements that involve a number of risks and uncertainties.Examples of forward-looking statements include those regarding Applieds future financial or operating resu

38、lts,cash flows and cash deployment strategies,declaration of dividends,share repurchases,business strategies and priorities,costs and cost controls,products,competitive positions,managements plans and objectives for future operations,research and development,strategic acquisitions and investments,gr

39、owth opportunities,restructuring activities,backlog,working capital,liquidity,investment portfolio and policies,taxes,supply chain,manufacturing,properties,legal proceedings and claims,customer demand and spending,end-use demand,market and industry trends and outlooks,general economic conditions and

40、 other statements that are not historical facts,as well as their underlying assumptions.Forward-looking statements may contain words such as“may,”“will,”“should,”“could,”“would,”“expect,”“plan,”“anticipate,”“believe,”“estimate,”“potential”and“continue,”the negative of these terms,or other comparable

41、 terminology.All forward-looking statements are subject to risks and uncertainties and other important factors,including those discussed in Part I,Item 1A,“Risk Factors,”below and elsewhere in this report.These and many other factors could affect Applieds future financial condition and operating res

42、ults and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by Applied or on its behalf.Forward-looking statements are based on managements estimates,projections and expectations as of the date hereof,and Applied u

43、ndertakes no obligation to revise or update any such statements.The following information should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included in this report.3APPLIED MATERIALS,INC.FORM 10-K FOR THE FISCAL Y

44、EAR ENDED OCTOBER 29,2017TABLE OF CONTENTS PagePART IItem 1:Business.Item 1A:Risk Factors.Item 1B:Unresolved Staff Comments.Item 2:Properties.Item 3:Legal Proceedings.Item 4:Mine Safety Disclosures.PART IIItem 5:Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of

45、 Equity Securities.Item 6:Selected Financial Data.Item 7:Managements Discussion and Analysis of Financial Condition and Results of Operations.Item 7A:Quantitative and Qualitative Disclosures About Market Risk.Item 8:Financial Statements and Supplementary Data.Item 9:Changes in and Disagreements with

46、 Accountants on Accounting and Financial Disclosure.Item 9A:Controls and Procedures.Item 9B:Other Information.PART IIIItem 10:Directors,Executive Officers and Corporate Governance.Item 11:Executive Compensation.Item 12:Security Ownership of Certain Beneficial Owners and Management and Related Stockh

47、older Matters.Item 13:Certain Relationships and Related Transactions,and Director Independence.Item 14:Principal Accounting Fees and Services.PART IVItem 15:Exhibits,Financial Statement Schedules.Signatures.4142425262626282948484849495050515252531034PART IItem 1:BusinessIncorporated in 1967,Applied

48、Materials,Inc.(Applied)is a Delaware corporation.A global company with a broad set of capabilities in materials engineering,Applied provides manufacturing equipment,services and software to the semiconductor,display and related industries.With its diverse technology capabilities,Applied delivers pro

49、ducts and services that improve device performance,yield and cost.Applieds 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

50、 the items to other companies for use in advanced electronic components.Applieds fiscal year ends on the last Sunday in October.Applied operates in three reportable segments:Semiconductor Systems,Applied Global Services,and Display and Adjacent Markets.A summary of financial information for each rep

51、ortable segment is found in Note 15 of Notes to Consolidated Financial Statements.A discussion of factors that could affect operations is set forth under“Risk Factors”in Item 1A,which is incorporated herein by reference.Net sales by reportable segment for the past three fiscal years were as follows:

52、201720162015(In millions,except percentages)Semiconductor Systems.$9,51765%$6,87364%$6,13564%Applied Global Services.3,01721%2,58924%2,44725%Display and Adjacent Markets.1,90013%1,20611%94410%Corporate and Other.1031%1571%1331%Total.$14,537100%$10,825100%$9,659100%Semiconductor Systems Applieds Semi

53、conductor Systems segment develops,manufactures and sells a wide range of manufacturing equipment used to fabricate semiconductor chips,also referred to as integrated circuits(ICs).The Semiconductor Systems segment includes semiconductor capital equipment used for many steps of the chip making proce

54、ss including the transfer of patterns into device structures,transistor and interconnect fabrication,metrology,inspection and review,and packaging technologies for connecting finished IC die.Applieds patterning systems and technologies address challenges resulting from shrinking pattern dimensions a

55、nd the growing complexity in vertical stacking found in todays most advanced semiconductor devices.Applieds transistor and interconnect products and technologies enable continued device scaling of 3D transistors.Applieds metrology,inspection and review systems imaging capabilities and algorithms emp

56、loy optical and e-beam technologies to meet the most advanced technical demands,such as self-aligned double and quad patterning,extreme ultraviolet layers,measurement-intensive optimal proximity correction mask qualification,and emerging 3D architectures.Applieds packaging technologies address chall

57、enges resulting from the increasing integration of multiple IC dies in a single package.Applied delivers leading-edge capabilities that enable chipmakers to establish accurate statistical process control,ramp up production runs rapidly,and achieve consistently high production yields.The majority of

58、Applieds new equipment sales are to leading integrated device manufacturers and foundries worldwide.5TechnologiesProduct(s)EpitaxyEpitaxy(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 dev

59、ice circuity.Epi technology is used in device transistors to enhance chip speed.Centura RP EpiIon ImplantIon 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,cal

60、led dopants,which can change the electrical properties of the exposed semiconductor material.VIISta SystemsOxidation/NitridationApplieds systems provide critical oxidation steps-like memory gate oxide,shallow trench isolation and liner oxide-for advanced device scaling.Vantage,Radianceand Centura Sy

61、stemsRapid Thermal Processing(RTP)RTP is used primarily for annealing,which modifies the properties of deposited films.Applieds single-wafer RTP systems are also used for growing high quality oxide and oxynitride films.Vantage SystemsPhysical Vapor Deposition(PVD)PVD is used to deposit high quality

62、metal films.Applications include metal gate,silicides,contact liner/barrier,interconnect copper barrier seed and metal hard mask.Endura SystemsChemical 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

63、 be deposited react on the wafer surface,forming a thin film of solid material.Endura,Centura andProducer SystemsChemical 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 gre

64、ater accuracy,resulting in more uniform film layers with minimal thickness variations.Reflexion SystemsElectrochemical 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 NokotaPlatformsAtomic Layer D

65、eposition(ALD)ALD technology enables ultra thin film growth of either a conducting or insulating material with uniform coverage in nanometer-sized structures.Olympia SystemEtchEtching is used many times throughout the IC manufacturing process to selectively remove material from the surface of a wafe

66、r.Applied offers systems for etching dielectric,metal,and silicon films to meet the requirements of advanced processing.Centris and ProducerSystemsSelective RemovalSelective removal is a new etch technology intended to remove a material of a particular composition without damaging materials of diffe

67、rent composition that coexist on the wafer.Producer SystemsMetrology and InspectionMetrology and inspection tools are used to locate,measure,and analyze defects and features on the wafer during various stages of the fabrication processes.Applied enables customers to characterize and control critical

68、 dimension(CD)and defect issues,especially at advanced generation technology nodes.SEMVision G6Defect AnalysisPROVision eBeamInspectionUVision 7 InspectionVeritySEM 5iMetrologyAera4 MaskInspection6Applied Global ServicesThe Applied Global Services(AGS)segment provides integrated solutions to optimiz

69、e equipment and fab performance and productivity,including spares,upgrades,services,remanufactured earlier generation equipment and factory automation software for semiconductor,display and other products.Customer demand for products and services is fulfilled through a global distribution system wit

70、h 90 locations and trained service engineers located in close proximity to customer sites in more than a dozen countries to support approximately 38,000 installed Applied semiconductor,display and other manufacturing systems worldwide.Applied offers the following general types of services and produc

71、ts under the Applied Global Services segment.AGS Solutions and TechnologyCertified ServicesA comprehensive service product portfolio that combines service technology and tool specific performance commitments in order to optimize customer factory productivity.Fab ConsultingExperts using advanced anal

72、ytical tools to solve production problems that have the greatest impact on customer fab productivity.Parts ProgramsSpare parts portfolio targets key manufacturing challenges and balances inventory cost and risk to efficiently meet customer fab requirements.Subfab EquipmentApplied SubFab solutions lo

73、wer costs,save energy,reduce environmental impact,and meet Environmental Protection Agency reporting regulations for greenhouse gas emissions.Legacy EquipmentComprehensive 200mm equipment and upgrades portfolio to address a full spectrum of production needs and extend tool lifetime.Applied legacy eq

74、uipment supports new technology for a broad variety of devices including analog,power,and MEMS.Automation SoftwareAutomation software coordinates and streamlines every aspect of a factory-the processes,equipment and people-to provide competitive advantage to customers.7Display and Adjacent MarketsTh

75、e Display and Adjacent Markets segment is comprised of products for manufacturing liquid crystal displays(LCDs),organic light-emitting diodes(OLEDs),and other display technologies for TVs,personal computers(PCs),electronic tablets,smart phones,and other consumer-oriented devices as well as equipment

76、 for processing flexible substrates.While similarities exist between the technologies utilized in semiconductor and display fabrication,the most significant differences are in the size and composition of the substrate.Substrates used to manufacture display panels and other devices are typically glas

77、s,although newer flexible materials are entering the market.Display and Adjacent Markets industry growth depends primarily on consumer demand for increasingly larger and more advanced TVs and high resolution displays for mobile devices as well as new form factors,including thin,light and curved disp

78、lays,and new applications such as virtual reality.The Display and Adjacent Markets segment offers a variety of technologies and products,including:Display and Adjacent Markets TechnologiesProduct(s)Array TestLCD display substrates are inspected at many stages of production to maximize yield,minimize

79、 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 ArrayTesterDefect ReviewDefects are identified during inspection steps and reviewed by a scannin

80、g electron microscope and other analyses to determine defect root cause and composition.Electron Beam Review(EBR)Chemical Vapor Deposition(CVD)During CVD processing,gases containing atoms or molecules are introduced into the process chamber.The gases form reactive radicals or ions,which undergo chem

81、ical reactions to form thin films on the heated substrate.AKT PECVD SystemsPhysical Vapor Deposition(PVD)PVD is used to deposit high quality films of metals,alloys,transparent conductors and semiconductors.In Display,these films are used for contact,interconnect,transparent electrodes and transistor

82、 materials in TFT-LCD and OLED display backplanes,as well as for transparent electrodes in color filters and touch panels.AKT Aristo and PiVotSystemsFlexible TechnologiesFlexible coating systems utilize physical vapor deposition,thermal evaporation,chemical vapor deposition,and e-beam technology to

83、deposit thin layers of metal onto flexible substrates.TopBeam,TopMet andSmartWeb SystemsBacklogApplied manufactures systems to meet demand represented by order backlog and customer commitments.Backlog consists of:(1)orders for which written authorizations have been accepted and assigned shipment dat

84、es are within the next 12 months,or shipment has occurred but revenue has not been recognized;and(2)contractual service revenue and maintenance fees to be earned within the next 12 months.Backlog by reportable segment as of October 29,2017 and October 30,2016 was as follows:20172016(In millions,exce

85、pt percentages)Semiconductor Systems.$2,99149%$2,09845%Applied Global Services.1,13019%86619%Display and Adjacent Markets.1,84731%1,53934%Corporate and Other.631%752%Total.$6,031100%$4,578100%Applieds backlog on any particular date is not necessarily indicative of actual sales for any future periods

86、,due to the potential for customer changes in delivery schedules or order cancellations.Customers may delay delivery of products or cancel orders prior to shipment,subject to possible cancellation penalties.Delays in delivery schedules or a reduction of backlog during any particular period could hav

87、e a material adverse effect on Applieds business and results of operations.8Manufacturing,Raw Materials and SuppliesApplieds manufacturing activities consist primarily of assembly,test and integration of various proprietary and commercial parts,components and subassemblies that are used to manufactu

88、re systems.Applied has implemented a distributed manufacturing model under which manufacturing and supply chain activities are conducted in various countries,including Germany,Israel,Italy,Singapore,Taiwan,the United States and other countries in Asia.Applied uses numerous vendors,including contract

89、 manufacturers,to supply parts and assembly services for the manufacture and support of its products,including some systems being completed at customer sites.Although Applied makes reasonable efforts to assure that parts are available from multiple qualified suppliers,this is not always possible.Acc

90、ordingly,some key parts may be obtained from only a single supplier or a limited group of suppliers.Applied seeks to reduce costs and to lower the risks of manufacturing and service interruptions by selecting and qualifying alternate suppliers for key parts;monitoring the financial condition of key

91、suppliers;maintaining appropriate inventories of key parts;qualifying new parts on a timely basis;and ensuring quality and performance of parts.Research,Development and EngineeringApplieds long-term growth strategy requires continued development of new materials engineering capabilities,including pr

92、oducts and platforms that enable expansion into new and adjacent markets.Applieds significant investments in research,development and engineering(RD&E)must generally enable it to deliver new products and technologies before the emergence of strong demand,thus allowing customers to incorporate these

93、products into their manufacturing plans during early-stage technology selection.Applied works closely with its global customers to design systems and processes that meet their planned technical and production requirements.Applieds product development and engineering organizations are located primari

94、ly in the United States,as well as in Canada,China,Europe,India,Israel,Singapore and Taiwan.In addition,certain outsourced RD&E activities,process support and customer demonstrations are performed in the United States,India,China,Singapore and Taiwan.Applieds investments in RD&E for product developm

95、ent and engineering programs over the last three fiscal years were as follows:$1.8 billion(12 percent of net sales)in fiscal 2017,$1.5 billion(14 percent of net sales)in fiscal 2016,and$1.5 billion(15 percent of net sales)in fiscal 2015.Applied has spent an average of 15 percent of net sales in RD&E

96、 over the last five years.In addition to RD&E for specific product technologies,Applied maintains ongoing programs for automation control systems,materials research,environmental control and product ideation.9Marketing and SalesNet sales by geographic region for the past three fiscal years,determine

97、d by the location of customers facilities to which products were shipped,were as follows:201720162015(In millions,except percentages)Korea.$4,05228%$1,88317%$1,65417%Taiwan.3,29123%2,84326%2,60027%China.2,74619%2,25921%1,62317%Japan.1,51810%1,27912%1,07811%Southeast Asia.6404%8037%4324%Asia Pacific.

98、12,24784%9,06783%7,38776%United States.1,47410%1,14311%1,63017%Europe.8166%6156%6427%Total.$14,537100%$10,825100%$9,659100%Because of the highly technical nature of its products,Applied markets and sells products worldwide almost entirely through a direct sales force.Global and regional economic con

99、ditions can impact the companys business and financial results.Applieds business is based on capital equipment investments by major semiconductor,display and other manufacturers,and is subject to significant variability in customer demand for Applieds products.Customers expenditures depend on many f

100、actors,including:general economic conditions;anticipated market demand and pricing for semiconductors,display technologies and other electronic devices;the development of new technologies;customers factory utilization;capital resources and financing;and government policies and incentives.In addition

101、,a significant driver in the semiconductor and display industries is end-demand for mobile consumer products,which is characterized by seasonality that impacts the timing of customer investments in manufacturing equipment and,in turn,Applieds business.Information on net sales to unaffiliated custome

102、rs and long-lived assets attributable to Applieds geographic regions is included in Note 15 of Notes to Consolidated Financial Statements.The following companies accounted for at least 10 percent of Applieds net sales in each fiscal year,which were for products and services in multiple reportable se

103、gments.201720162015Samsung Electronics Co.,Ltd.23%13%18%Taiwan Semiconductor Manufacturing Company Limited.15%16%15%Micron Technology,Inc.*11%*Intel Corporation.*11%*_*Less than 10%10CompetitionThe industries in which Applied operates are highly competitive and characterized by rapid technological c

104、hange.Applieds ability to compete generally depends on its ability to commercialize its technology in a timely manner,continually improve its products,and develop new products that meet constantly evolving customer requirements.Significant competitive factors include technical capability and differe

105、ntiation,productivity,cost-effectiveness and the ability to support a global customer base.The importance of these factors varies according to customers needs,including product mix and respective product requirements,applications,and the timing and circumstances of purchasing decisions.Substantial c

106、ompetition exists in all areas of Applieds business.Competitors range from small companies that compete in a single region,which may benefit from policies and regulations that favor domestic companies,to global,diversified companies.Applieds ability to compete requires a high level of investment in

107、RD&E,marketing and sales,and global customer support activities.Management believes that many of Applieds products have strong competitive positions.The competitive environment for each segment is described below.The semiconductor industry is driven by demand for advanced electronic products,includi

108、ng smartphones and other mobile devices,servers,personal computers,automotive devices,storage,and other products.The growth of data and new end-market drivers such as artificial intelligence,augmented and virtual reality and smart vehicles are also creating new opportunities for the industry.As a re

109、sult,products within the Semiconductor Systems segment are subject to significant changes in customer requirements,including transitions to smaller dimensions,increasingly complex chip architectures,new materials and an increasing number of applications.While certain existing technologies may be ada

110、pted to new requirements,some applications create the need for an entirely different technological approach.The rapid pace of technological change can quickly diminish the value of current technologies and products and create opportunities for existing and new competitors.Applied offers a variety of

111、 technologically-differentiated products that must continuously evolve to satisfy customers requirements to compete effectively in the marketplace.Applied allocates resources among its numerous product offerings and therefore may decide not to invest in an individual product to the same degree as co

112、mpetitors who specialize in fewer products.There are a number of competitors serving the semiconductor manufacturing equipment industry,which has experienced increasing consolidation.Some of these competitors offer a single product line and others offer multiple product lines,and range from supplier

113、s serving a single region to global,diversified companies.Products and services within the Applied Global Services segment complement Semiconductor Systems and Display and Adjacent Markets segments products in markets that are characterized by demanding worldwide service requirements and a diverse g

114、roup of numerous competitors.To compete effectively,Applied offers products and services to improve tool performance,lower overall cost of ownership,and increase yields and productivity of customers fab operations.Significant competitive factors include productivity,cost-effectiveness,and the level

115、of technical service and support.The importance of these factors varies according to customers needs and the type of products or services offered.Products in the Display and Adjacent Markets segment are generally subject to strong competition from a number of major competitors primarily in Asia.Appl

116、ied holds established market positions with its technically-differentiated LCD and OLED manufacturing solutions for PECVD,color filter PVD,PVD array,PVD touch panel,and TFT array testing,although its market position could change quickly due to customers evolving requirements.Important factors affect

117、ing the competitive position of Applieds Display and Adjacent Markets products include:industry trends,Applieds ability to innovate and develop new products,and the extent to which Applieds products are technically-differentiated,as well as which customers within a highly concentrated customer base

118、are making capital equipment investments and Applieds existing position at these customers.11Patents and LicensesApplieds competitive position significantly depends upon its research,development,engineering,manufacturing and marketing capabilities,as well as its patent position.Protection of Applied

119、s technology assets through enforcement of its intellectual property rights,including patents,is important.Applieds practice is to file patent applications in the United States and other countries for inventions that it considers significant.Applied has approximately 11,900 patents in the United Sta

120、tes and other countries,and additional applications are pending for new inventions.Although Applied does not consider its business materially dependent upon any one patent,the rights of Applied and the products made and sold under its patents,taken as a whole,are a significant element of its busines

121、s.In addition to its patents,Applied possesses other intellectual property,including trademarks,know-how,trade secrets,and copyrights.Applied enters into patent and technology licensing agreements with other companies when it is determined to be in its best interest.Applied pays royalties under exis

122、ting patent license agreements for the use,in several of its products,of certain patented technologies.Applied also receives royalties from licenses granted to third parties.Royalties received from or paid to third parties have not been,and are not expected to be,material to Applieds consolidated re

123、sults of operations.In the normal course of business,Applied periodically receives and makes inquiries regarding possible patent infringement.In responding to such inquiries,it may become necessary or useful for Applied to obtain or grant licenses or other rights.However,there can be no assurance th

124、at such licenses or rights will be available to Applied on commercially reasonable terms,or at all.If Applied is not able to resolve or settle claims,obtain necessary licenses on commercially reasonable terms,or successfully prosecute or defend its position,Applieds business,financial condition and

125、results of operations could be materially and adversely affected.Environmental MattersApplied maintains a number of environmental,health,and safety programs that are primarily preventative in nature.As part of these programs,Applied regularly monitors ongoing compliance with applicable laws and regu

126、lations.In addition,Applied has trained personnel to conduct investigations of any environmental,health,or safety incidents,including,but not limited to,spills,releases,or possible contamination.Compliance with federal,state and local environmental,health and safety laws and regulations,including th

127、ose regulating the discharge of materials into the environment,remedial agreements,and other actions relating to the environment have not had,and are not expected to have,a material effect on Applieds capital expenditures,competitive position,financial condition,or results of operations.The most rec

128、ent report on Applieds environmental,health and safety activities can be found in Applieds latest Citizenship Report on its website at http:/ Citizenship Report is updated periodically.This website address is intended to be an inactive textual reference only.None of the information on,or accessible

129、through,Applieds website is part of this Form 10-K or is incorporated by reference herein.EmployeesAt October 29,2017,Applied employed approximately 18,400 regular employees.In the high-technology industry,competition for highly-skilled employees is intense.Applied believes that its future success i

130、s highly dependent upon its continued ability to attract,retain and motivate qualified employees.12Executive Officers of the RegistrantThe following table and notes set forth information about Applieds executive officers:Name of IndividualPositionGary E.Dickerson(1)President,Chief Executive OfficerG

131、inetto Addiego(2)Senior Vice President,Engineering,Operations and QualityDaniel J.Durn(3)Senior Vice President,Chief Financial OfficerSteve Ghanayem(4)Senior Vice President,New Markets and Alliances GroupThomas F.Larkins(5)Senior Vice President,General Counsel and Corporate SecretaryOmkaram Nalamasu

132、(6)Senior Vice President,Chief Technology OfficerPrabu Raja(7)Senior Vice President,Semiconductor Products GroupAli Salehpour(8)Senior Vice President,General Manager,Services,Display and Flexible TechnologiesCharles Read(9)Corporate Vice President,Corporate Controller and Chief Accounting Officer(1)

133、Mr.Dickerson,age 60,was named President of Applied in June 2012 and appointed Chief Executive Officer and a member of the Board of Directors in September 2013.Before joining Applied,he served as Chief Executive Officer and a director of Varian Semiconductor Equipment Associates,Inc.(Varian)from 2004

134、 until its acquisition by Applied in November 2011.Prior to Varian,Mr.Dickerson served 18 years with KLA-Tencor Corporation(KLA-Tencor),a supplier of process control and yield management solutions for the semiconductor and related industries,where he held a variety of operations and product developm

135、ent roles,including President and Chief Operating Officer.Mr.Dickerson started his semiconductor career in manufacturing and engineering management at General Motors Delco Electronics Division and then AT&T Technologies.(2)Dr.Addiego,age 58,has been Senior Vice President,Engineering,Operations and Q

136、uality since June 2015.He served as Senior Vice President,Engineering from March 2014 to June 2015.He previously was with Applied from 1996 to 2005,leading various product groups as well as global organizations,including Global Operations,Facilities and Real Estate,Foundation Engineering,and Informa

137、tion Technology.From March 2011 to March 2014,Dr.Addiego was President and Chief Operating Officer of Ultra Clean Technology Corp.,a public company listed on NASDAQ and a supplier of critical subsystems for the semiconductor capital equipment,medical device,energy,research,and flat panel industries.

138、From February 2005 to March 2011,Dr.Addiego worked at Novellus Systems,Inc.,a provider of advanced process equipment for the semiconductor industry,where he served as Executive Vice President of Corporate Global Operations including Central Engineering,Facilities and Real Estate,Human Resources,Info

139、rmation Technology and as a Chief Administrative Officer.(3)Mr.Durn,age 51,has been Senior Vice President and Chief Financial Officer of Applied since August 2017.Previously,Mr.Durn was Executive Vice President and Chief Financial Officer of NXP Semiconductors N.V.,a semiconductor manufacturer(NXP),

140、from December 2015 to August 2017.Mr.Durn served as Senior Vice President of Finance and Chief Financial Officer of Freescale Semiconductor,Inc.,from June 2014 until its merger with NXP in December 2015.Prior to Freescale,Mr.Durn was Chief Financial Officer and Executive Vice President of Finance an

141、d Administration at GlobalFoundries,a semiconductor foundry,which he joined in December 2011.(4)Mr.Ghanayem,age 52,has been Senior Vice President,New Markets and Alliances Group of Applied since November 2017.He has served in various senior management,product development and operational roles since

142、joining Applied in 1989,including Group Vice President and General Manager of the Transistor and Interconnect Group.(5)Mr.Larkins,age 56,has been Senior Vice President,General Counsel and Corporate Secretary of Applied since November 2012.Previously,Mr.Larkins was employed by Honeywell International

143、 Inc.,a diversified global technology and manufacturing company,where he was Vice President,Corporate Secretary and Deputy General Counsel from 2002 until joining Applied.Mr.Larkins served in various other positions at Honeywell(formerly AlliedSignal)after joining the company in 1997.(6)Dr.Nalamasu,

144、age 59,has been Senior Vice President,Chief Technology Officer since June 2013,and President of Applied Ventures,LLC,Applieds venture capital arm,since November 2013.He had served as Group Vice President,Chief Technology Officer from January 2012 to June 2013,and as Corporate Vice President,Chief Te

145、chnology Officer from January 2011 to January 2012.Upon joining Applied in June 2006 until January 2011,Dr.Nalamasu was an Appointed Vice President of Research and served as Deputy Chief Technology Officer and General Manager for the Advanced Technologies Group.From 2002 to 2006,Dr.Nalamasu was a NY

146、STAR distinguished professor of Materials Science and Engineering at Rensselaer Polytechnic Institute,where he also served as Vice President of Research from 2005 to 2006.Prior to Rensselaer,Dr.Nalamasu served in several leadership roles at Bell Laboratories.13(7)Mr.Raja,age 55,has been Senior Vice

147、President,Semiconductor Products Group of Applied since November 2017.He previously served in various senior management,product development and operational roles since joining Applied in 1995,including Group Vice President and General Manager of the Patterning and Packaging Group.(8)Mr.Salehpour,age

148、 56,has been Senior Vice President,General Manager,Services,Display and Flexible Technologies since September 2013.He previously served as Group Vice President,General Manager Energy and Environmental Solutions and Display Business Groups,since joining Applied in November 2012.Prior to Applied,Mr.Sa

149、lehpour worked at KLA-Tencor for 16 years,where he served as a Senior Vice President and General Manager and worked for 10 years in senior management positions at Schlumberger Test Systems.(9)Mr.Read,age 51,has been Corporate Vice President,Corporate Controller and Chief Accounting Officer of Applie

150、d since joining the Company in September 2013.Prior to Applied,Mr.Read worked at Brocade Communications Systems,Inc.,a provider of semiconductor and software-based network solutions,since October 2002,where he most recently served as Vice President,Corporate Controller.Prior to Brocade,Mr.Read worke

151、d at KPMG LLP,an audit,tax and advisory firm,from 1996 to 2002.Available InformationApplieds website is http:/.Applied makes available free of charge,on or through its website,its annual,quarterly and current reports,and any amendments to those reports,as soon as reasonably practicable after electro

152、nically filing such reports with,or furnishing them to,the SEC.The SECs website,www.sec.gov,contains reports,proxy and information statements,and other information regarding issuers that file electronically with the SEC.These website addresses are intended to be an inactive textual references only.N

153、one of the information on,or accessible through,these websites is part of this Form 10-K or is incorporated by reference herein.14Item 1A:Risk FactorsThe following risk factors could materially and adversely affect Applieds business,financial condition or results of operations and cause reputational

154、 harm,and should be carefully considered in evaluating the Company and its business,in addition to other information presented elsewhere in this report.The industries that Applied serves can be volatile and difficult to predict.As a supplier to the global semiconductor and display and related indust

155、ries,Applied is subject to variable industry conditions,as demand for manufacturing equipment and services can change depending on several factors,including the nature and timing of technology inflections and advances in fabrication processes,the timing and requirements of new and emerging technolog

156、ies and market drivers,production capacity relative to demand for chips and display technologies,end-user demand,customers capacity utilization,production volumes,access to affordable capital,consumer buying patterns and general economic conditions.Applieds industries historically have been cyclical

157、,and are subject to volatility and sudden changes in customer requirements for new manufacturing capacity and advanced technology.These changes can affect the timing and amounts of customer investments in technology and manufacturing equipment,and can have a significant impact on Applieds net sales,

158、operating expenses,gross margins and net income.The amount and mix of capital equipment spending between different products and technologies can have a significant impact on the Companys results of operations.To meet rapidly changing demand in the industries it serves,Applied must accurately forecas

159、t demand and effectively manage its resources and production capacity across its businesses,and may incur unexpected or additional costs to align its business operations.During periods of increasing demand for its products,Applied must have sufficient manufacturing capacity and inventory to meet cus

160、tomer demand;effectively manage its supply chain;attract,retain and motivate a sufficient number of qualified employees;and continue to control costs.During periods of decreasing demand,Applied must reduce costs and align its cost structure with prevailing market conditions;effectively manage its su

161、pply chain;and motivate and retain key employees.If Applied does not effectively manage these challenges during periods of changing demand,its business performance and results of operations may be adversely impacted.Even with effective allocation of resources and management of costs,during periods o

162、f decreasing demand,Applieds gross margins and earnings may be adversely impacted.Applied is exposed to risks associated with an uncertain global economy.Uncertain global economic and business conditions,along with uncertainties in the financial markets,national debt and fiscal concerns in various r

163、egions,pose challenges to the industries in which Applied operates.Markets for semiconductors and displays depend largely on business and consumer spending and demand for electronic products.Economic uncertainty and related factors exacerbate negative trends in business and consumer spending and may

164、 cause certain Applied customers to push out,cancel,or refrain from purchasing for equipment or services,which may have an adverse impact on Applieds revenues,results of operations and financial condition.Uncertain market conditions,difficulties in obtaining capital,or reduced profitability may also

165、 cause some customers to scale back operations,exit businesses,merge with other manufacturers,or file for bankruptcy protection and potentially cease operations,which can also result in lower sales,additional inventory or bad debt expense for Applied.Economic and industry uncertainty may similarly a

166、ffect suppliers,which could impair their ability to deliver parts and negatively affect Applieds ability to manage operations and deliver its products.These conditions may also lead to consolidation or strategic alliances among other equipment manufacturers,which could adversely affect Applieds abil

167、ity to compete effectively.Uncertain economic and industry conditions also make it more challenging for Applied to forecast its operating results,make business decisions,and identify and prioritize the risks that may affect its businesses,sources and uses of cash,financial condition and results of o

168、perations.If Applied does not appropriately manage its business operations,it could have a significant negative impact on its business performance and financial condition.Applied may be required to implement additional cost reduction efforts,including restructuring activities,which may adversely aff

169、ect Applieds ability to capitalize on opportunities.Even during periods of economic uncertainty or lower revenues,Applied must continue to invest in research and development and maintain a global business infrastructure to compete effectively and support its customers,which can have a negative impac

170、t on its operating margins and earnings.Applied maintains an investment portfolio that is subject to general credit,liquidity,market and interest rate risks.The risks to Applieds investment portfolio may be exacerbated if financial market conditions deteriorate and,as a result,the value and liquidit

171、y of the investment portfolio,as well as returns on pension assets,could be negatively impacted and lead to impairment charges.Applied also maintains cash balances in various bank accounts globally in order to fund normal operations.If any of these financial institutions becomes insolvent,it could l

172、imit Applieds ability to access cash in the affected accounts,which could affect its ability to manage its operations.15Applied is exposed to risks as a result of ongoing changes in the various industries in which it operates.The global semiconductor,display and related industries in which Applied o

173、perates are characterized by ongoing changes affecting some or all of these industries that impact demand for and the profitability of Applieds products,including:the nature,timing and degree of visibility of changes in end demand for electronic products,including those related to fluctuations in co

174、nsumer buying patterns tied to seasonality or the introduction of new products,and the effects of these changes on customers businesses and on demand for Applieds products;increasing capital requirements for building and operating new fabrication plants and customers ability to raise the necessary c

175、apital;regulatory or tax policies impacting the timing of customers investment in new or expanded fabrication plants;differences in growth rates among the semiconductor,display and other industries in which Applied operates;the increasing importance of establishing,improving and maintaining strong r

176、elationships with customers;the increasing cost and complexity for customers to move from product design to volume manufacturing,which may slow the adoption rate of new manufacturing technology;the need for customers to continually reduce the total cost of manufacturing system ownership;the heighten

177、ed importance to customers of system reliability and productivity and the effect on demand for fabrication systems as a result of their increasing productivity,device yield and reliability;manufacturers ability to reconfigure and re-use fabrication systems which can reduce demand for new equipment;t

178、he increasing importance of,and difficulties in,developing products with sufficient differentiation to influence customers purchasing decisions;requirements for shorter cycle times for the development,manufacture and installation of manufacturing equipment;price and performance trends for semiconduc

179、tor devices and displays,and the corresponding effect on demand for such products;the increasing importance of the availability of spare parts to maximize the time that customers systems are available for production;the increasing role for and complexity of software in Applied products;and the incre

180、asing focus on reducing energy usage and improving the environmental impact and sustainability associated with manufacturing operations.Applied is exposed to risks as a result of ongoing changes specific to the semiconductor industry.The largest proportion of Applieds consolidated net sales and prof

181、itability is derived from sales of manufacturing equipment in the Semiconductor Systems segment to the global semiconductor industry.In addition,a majority of the revenues of Applied Global Services is from sales to semiconductor manufacturers.The semiconductor industry is characterized by ongoing c

182、hanges particular to this industry that impact demand for and the profitability of Applieds semiconductor equipment and service products,including:the increasing frequency and complexity of technology transitions and inflections,and Applieds ability to timely and effectively anticipate and adapt to

183、these changes;the increasing cost of research and development due to many factors,including shrinking geometries,the use of new materials,new and more complex device structures,more applications and process steps,increasing chip design costs,and the increasing cost and complexity of integrated manuf

184、acturing processes;the need to reduce product development time,despite the increasing difficulty of technical challenges;the growing number of types and varieties of semiconductors and number of applications across multiple substrate sizes;the increasing cost and complexity for semiconductor manufac

185、turers to move more technically advanced capability and smaller geometries to volume manufacturing,and the resulting impact on the rates of technology transition and investment in capital equipment;challenges in generating organic growth given semiconductor manufacturers levels of capital expenditur

186、es and the allocation of capital investment to market segments that Applied does not serve,such as lithography,or segments where Applieds products have lower relative market presence;the importance of increasing market positions in segments with growing demand;16 semiconductor manufacturers ability

187、to reconfigure and re-use equipment,and the resulting effect on their need to purchase new equipment and services;shorter cycle times between order placements by customers and product shipment require greater reliance on forecasting of customer investment,which may lead to inventory write-offs and m

188、anufacturing inefficiencies that decrease gross margin;competitive factors that make it difficult to enhance position,including challenges in securing development-tool-of-record(DTOR)and production-tool-of-record(PTOR)positions with customers;consolidation in the semiconductor industry,including amo

189、ng semiconductor manufacturers and among manufacturing equipment suppliers;shifts in sourcing strategies by computer and electronics companies that impact the equipment requirements of Applieds foundry customers;the concentration of new wafer starts in Korea and Taiwan,where Applieds service penetra

190、tion and service-revenue-per-wafer-start have been lower than in other regions;investment in semiconductor manufacturing capabilities in China,which may be affected by changes in economic conditions and governmental policies in China;and the increasing fragmentation of semiconductor markets,leading

191、certain markets to become too small to support the cost of a new fabrication plant,while others require less technologically advanced products.If Applied does not accurately forecast,and allocate appropriate resources and investment towards addressing,key technology changes and inflections,successfu

192、lly develop and commercialize products to meet demand for new technologies,and effectively address industry trends,its business and results of operations may be adversely impacted.Applied is exposed to risks as a result of ongoing changes specific to the display industry.The global display industry

193、historically has experienced considerable volatility in capital equipment investment levels,due in part to the limited number of display manufacturers,the concentrated nature of end-use applications,production capacity relative to end-use demand,and panel manufacturer profitability.Industry growth d

194、epends primarily on consumer demand for increasingly larger and more advanced TVs,and on demand for advanced smartphones and mobile device displays,which demand is highly sensitive to cost and improvements in technologies and features.The display industry is characterized by ongoing changes particul

195、ar to this industry that impact demand for and the profitability of Applieds display products,including:the importance of new types of display technologies,such as organic light-emitting diode(OLED),low temperature polysilicon(LTPS),flexible displays and metal oxide,and new touch panel films;the inc

196、reasing cost of research and development,and complexity of technology transitions and inflections,and Applieds ability to timely and effectively anticipate and adapt to these changes;the timing and extent of an expansion of manufacturing facilities in China,which may be affected by changes in econom

197、ic conditions and governmental policies in China;the importance of increasing market positions in products and technologies with growing demand;the rate of transition to larger substrate sizes for TVs and to new display technologies for TVs and mobile applications,and the resulting effect on capital

198、 intensity in the industry and on Applieds product differentiation,gross margin and return on investment;and the variability in demand for display manufacturing equipment,concentration of display manufacturer customers and their ability to successfully commercialize new products and technologies,and

199、 uncertainty with respect to future display technology end-use applications and growth drivers.If Applied does not successfully develop and commercialize products to meet demand for new and emerging display technologies,or if industry demand for display manufacturing equipment and technologies slows

200、,Applieds business and its results of operations may be adversely impacted.17The industries in which Applied operates are highly competitive and subject to rapid technological and market changes.Applied operates in a highly competitive environment in which innovation is critical,and its future succe

201、ss depends on many factors,including the development of new technologies and effective commercialization and customer acceptance of its equipment,services and related products,and its ability to increase its position in its current markets,expand into adjacent and new markets,and optimize operationa

202、l performance.The development,introduction and support of a broadening set of products in a geographically diverse and competitive environment,and that may require greater collaboration with customers and other industry participants,have grown more complex and expensive over time.Furthermore,new or

203、improved products may entail higher costs and lower profits.To compete successfully,Applied must:identify and address technology inflections,market changes,new applications,customer requirements and end-use demand;develop new products and disruptive technologies,improve and develop new applications

204、for existing products,and adapt products for use by customers in different applications and markets with varying technical requirements;differentiate its products from those of competitors,meet customers performance specifications,appropriately price products,and achieve market acceptance;maintain o

205、perating flexibility to enable responses to changing markets,applications,customers and customer requirements;enhance its worldwide operations across its businesses to reduce cycle time,enable continuous quality improvement,reduce costs,and enhance design for manufacturability and serviceability;foc

206、us on product development and sales and marketing strategies that address customers high value problems and strengthen customer relationships;effectively allocate resources between its existing products and markets,the development of new products,and expanding into new and adjacent markets;improve t

207、he productivity of capital invested in R&D activities;accurately forecast demand,work with suppliers and meet production schedules for its products;improve its manufacturing processes and achieve cost efficiencies across product offerings;adapt to changes in value offered by companies in different p

208、arts of the supply chain;qualify products for evaluation and volume manufacturing with its customers;and implement changes in its design engineering methodology to reduce material costs and cycle time,increase commonality of platforms and types of parts used in different systems,and improve product

209、life cycle management.If Applied does not successfully anticipate technology inflections,develop and commercialize new products and technologies,and respond to changes in customer requirements and market trends,its business performance and results of operations may be adversely impacted.Applied is e

210、xposed to risks associated with a highly concentrated customer base.Applieds customer base is highly concentrated,and has become increasingly concentrated as a result of continued consolidation.Applieds customer base is also geographically concentrated.A relatively limited number of manufacturers ac

211、count for a substantial portion of Applieds business.As a result,the actions of even a single customer can expose Applieds business and results of operations to greater volatility.The mix and type of customers,and sales to any single customer,may vary significantly from quarter to quarter and from y

212、ear to year,and have a significant impact on Applieds net sales,gross margins and net income.Applieds products are configured to customer specifications,and changing,rescheduling or canceling orders may result in significant,non-recoverable costs.If customers do not place orders,or they substantiall

213、y reduce,delay or cancel orders,Applied may not be able to replace the business,which may have a significant adverse impact on its results of operations and financial condition.The concentration of Applieds customer base increases its risks related to the financial condition of its customers,and the

214、 deterioration in financial condition of a single customer or the failure of a single customer to perform its obligations could have a material adverse effect on Applieds results of operations and cash flow.To the extent its customers experience liquidity constraints,Applied may incur additional bad

215、 debt expense,which may have a significant impact on its results of operations.Major customers may also seek pricing,payment,intellectual property-related,or other commercial terms that are less favorable to Applied,which may have a negative impact on Applieds business,revenue and gross margins.18Ap

216、plied is exposed to the risks of operating a global business.Applied has product development,engineering,manufacturing,sales and other operations distributed throughout many countries,and some of its business activities are concentrated in certain geographic areas.Moreover,in fiscal 2017,approximate

217、ly 90 percent of Applieds net sales were to customers in regions outside the United States.As a result of the global nature of its operations,Applieds business performance and results of operations may be adversely affected by a number of factors,including:uncertain global economic and political bus

218、iness conditions and demands;political and social attitudes,laws,rules,regulations and policies within countries that favor domestic companies over non-domestic companies,including customer-or government-supported efforts to promote the development and growth of local competitors;customer-or governm

219、ent-supported efforts to influence Applied to conduct more of its operations and sourcing in a particular country,such as Korea and China;variations among,and changes in,local,regional,national or international laws and regulations,including contract,intellectual property,labor,tax,and import/export

220、 laws,and the interpretation and application of such laws and regulations;global trade issues,including the ability to obtain required import and export licenses,trade sanctions,tariffs,and international trade disputes;ineffective or inadequate legal protection of intellectual property rights in cer

221、tain countries;positions taken by governmental agencies regarding possible national commercial and/or security issues posed by international business operations;fluctuating raw material,commodity,energy and shipping costs or shipping delays;geographically diverse operations and projects,and our abil

222、ity to maintain appropriate business processes,procedures and internal controls,and comply with environmental,health and safety,anti-corruption and other regulatory requirements;supply chain interruptions,and service interruptions from utilities,transportation,data hosting or telecommunications prov

223、iders;a diverse workforce with different experience levels,languages,cultures,customs,business practices and worker expectations,and differing employment practices and labor issues;variations in the ability to develop relationships with local customers,suppliers and governments;fluctuations in inter

224、est rates and currency exchange rates,including the relative strength or weakness of the U.S.dollar against the Japanese yen,euro,Taiwanese dollar,Israeli shekel,Chinese yuan or Singapore dollar;the need to provide sufficient levels of technical support in different locations around the world;perfor

225、mance of third party providers of outsourced functions,including certain engineering,software development,manufacturing,information technology and other activities;political instability,natural disasters,pandemics,social unrest,terrorism or acts of war in locations where Applied has operations,suppl

226、iers or sales,or that may influence the value chain of the industries that Applied serves;challenges in hiring and integration of an increasing number of workers in new countries;the increasing need for a mobile workforce to work in or travel to different regions;and uncertainties with respect to ec

227、onomic growth rates in various countries,including for the manufacture and sale of semiconductors and displays in the developing economies of certain countries.Many of these challenges are present in China and Korea,which are experiencing significant growth of customers,suppliers and competitors to

228、Applied.Applied further believes that China and Korea present large potential markets for its products and opportunity for growth over the long term,although at lower projected levels of profitability and margins for certain products than historically have been achieved in other regions.In addition,

229、government authorities may impose conditions that require the use of local suppliers or partnerships with local companies,require the license or other transfer of intellectual property,or engage in other efforts to promote local businesses and local competitors,which could have a significant adverse

230、 impact on Applieds business.19Applied is exposed to risks associated with business combinations,acquisitions and strategic investments.Applied engages in acquisitions of or investments in companies,technologies or products in existing,related or new markets for Applied.Business combinations,acquisi

231、tions and investments involve numerous risks to Applieds business,financial condition and operating results,including but not limited to:diversion of managements attention and disruption of ongoing businesses;contractual restrictions on the conduct of Applieds business during the pendency of a propo

232、sed transaction;inability to complete proposed transactions due to the failure to obtain regulatory or other approvals,litigation or other disputes,and any ensuing obligation to pay a termination fee;the failure to realize expected returns from acquired businesses;requirements imposed by government

233、regulators in connection with their review of a transaction,which may include,among other things,divestitures and restrictions on the conduct of Applieds existing business or the acquired business;ineffective integration of operations,systems,technologies,products or employees,which can impact the a

234、bility to realize anticipated synergies or other benefits;failure to commercialize technologies from acquired businesses or developed through strategic investments;dependence on unfamiliar supply chains or relatively small supply partners;inability to capitalize on characteristics of new markets tha

235、t may be significantly different from Applieds existing markets and where competitors may have stronger market positions and customer relationships;failure to retain and motivate key employees of acquired businesses;the potential impact of the announcement or consummation of a proposed transaction o

236、n relationships with third parties;potential changes in Applieds credit rating,which could adversely impact the Companys access to and cost of capital;reductions in cash balances or increases in debt obligations to finance activities associated with a transaction,which reduce the availability of cas

237、h flow for general corporate or other purposes,including share repurchases and dividends;exposure to new operational risks,rules,regulations,worker expectations,customs and practices to the extent acquired businesses are located in regions where Applied has not historically conducted business;challe

238、nges associated with managing new,more diverse and more widespread operations,projects and people;inability to obtain and protect intellectual property rights in key technologies;inadequacy or ineffectiveness of an acquired companys internal financial controls,disclosure controls and procedures,or e

239、nvironmental,health and safety,anti-corruption,human resource,or other policies or practices;impairment of acquired intangible assets and goodwill as a result of changing business conditions,technological advancements or worse-than-expected performance of the segment;the risk of litigation or claims

240、 associated with a proposed or completed transaction;unknown,underestimated or undisclosed commitments or liabilities;and the inappropriate scale of acquired entities critical resources or facilities for business needs.Applied also makes strategic investments in other companies,including companies f

241、ormed as joint ventures,which may decline in value or not meet desired objectives.The success of these investments depends on various factors over which Applied may have limited or no control and,particularly with respect to joint ventures,requires ongoing and effective cooperation with strategic pa

242、rtners.The risks to Applieds strategic investment portfolio may be exacerbated by unfavorable financial market and macroeconomic conditions and,as a result,the value of the investment portfolio could be negatively impacted and lead to impairment charges.20Applieds indebtedness and debt covenants cou

243、ld adversely affect its financial condition and business.Applied has$5.4 billion in aggregate principal amount of senior unsecured notes outstanding.Under the indenture governing the senior unsecured notes,it may be required to offer to repurchase the notes at a price equal to 101%of the principal a

244、mount,plus accrued and unpaid interest,upon a change of control of Applied and a contemporaneous downgrade of the notes below investment grade.Applied also has in place a$1.5 billion committed revolving credit agreement.While no amounts were outstanding under this credit agreement at October 29,2017

245、,Applied may borrow amounts in the future under the agreement.Applied may also enter into new financing arrangements.Applieds ability to satisfy its debt obligations is dependent upon the results of its business operations and subject to other risks discussed in this section.Significant changes in A

246、pplieds credit rating or changes in the interest rate environment could have a material adverse consequence on Applieds access to and cost of capital for future financings,and financial condition.If Applied fails to satisfy its debt obligations,or comply with financial and other debt covenants,it ma

247、y be in default and any borrowings may become immediately due and payable,and such default may also constitute a default under other of Applieds obligations.There can be no assurance that Applied would have sufficient financial resources or be able to arrange financing to repay any borrowings at suc

248、h time.Applied is exposed to risks associated with expanding into new and related markets and industries.As part of its growth strategy,Applied must successfully expand into related or new markets and industries,either with its existing products or with new products developed internally,or those dev

249、eloped in collaboration with third parties,or obtained through acquisitions.Applieds ability to successfully expand its business into new and related markets and industries may be adversely affected by a number of factors,including:the need to devote additional resources to develop new products for,

250、and operate in,new markets;the need to develop new sales and technical marketing strategies,cultivate relationships with new customers and meet different customer service requirements;differing rates of profitability and growth among multiple businesses;Applieds ability to anticipate demand,capitali

251、ze on opportunities,and avoid or minimize risks;the complexity of managing multiple businesses with variations in production planning,execution,supply chain management and logistics;the adoption of new business models,business processes and systems;the complexity of entering into and effectively man

252、aging strategic alliances or partnering opportunities;new materials,processes and technologies;the need to attract,motivate and retain employees with skills and expertise in these new areas;new and more diverse customers and suppliers,including some with limited operating histories,uncertain or limi

253、ted funding,evolving business models or locations in regions where Applied does not have,or has limited,operations;new or different competitors with potentially more financial or other resources,industry experience and established customer relationships;entry into new industries and countries,with d

254、iffering levels of government involvement,laws and regulations,and business,employment and safety practices;third parties intellectual property rights;and the need to comply with,or work to establish,industry standards and practices.In addition,Applied from time to time receives funding from United

255、States and other government agencies for certain strategic development programs to increase its research and development resources and address new market opportunities.As a condition to this government funding,Applied may be subject to certain record-keeping,audit,intellectual property rights-sharin

256、g and/or other obligations.21Manufacturing interruptions or delays,or the failure to accurately forecast customer demand,could affect Applieds ability to meet customer demand,lead to higher costs,or result in excess or obsolete inventory.Applieds business depends on its timely supply of equipment,se

257、rvices and related products that meet the rapidly changing technical and volume requirements of its customers,which depends in part on the timely delivery of parts,including components and subassemblies,from suppliers,including contract manufacturers.The inability to timely obtain sufficient quantit

258、ies of parts can have an adverse impact on Applieds manufacturing operations and ability to meet customer demand for equipment,spares and services.Some key parts are subject to long lead-times or obtainable only from a single supplier or limited group of suppliers,and some sourcing or subassembly is

259、 provided by suppliers located in countries other than the countries where Applied conducts its manufacturing.Variable industry conditions and the volatility of demand for manufacturing equipment increase capital,technical,operational and other risks for Applied and for companies throughout its supp

260、ly chain.These conditions may cause some suppliers to scale back operations,exit businesses,merge with other companies,or file for bankruptcy protection and possibly cease operations.Applied may also experience significant interruptions of its manufacturing operations,delays in its ability to delive

261、r products or services,increased costs or customer order cancellations as a result of:the failure or inability to accurately forecast demand and obtain sufficient quantities of quality parts on a cost-effective basis;volatility in the availability and cost of materials;difficulties or delays in obta

262、ining required import or export approvals;shipment delays due to transportation interruptions or capacity constraints;information technology or infrastructure failures;and natural disasters or other events beyond Applieds control(such as earthquakes,floods or storms,regional economic downturns,pande

263、mics,social unrest,political instability,terrorism,or acts of war),particularly where it conducts manufacturing.If a supplier fails to meet Applieds requirements concerning quality,cost,protection of intellectual property,socially-responsible business practices,or other performance factors,Applied m

264、ay transfer its business to alternative sources,which could entail manufacturing delays,additional costs,or other difficulties.If Applied is unable to meet its customers demand for a prolonged period due to its inability to obtain certain parts or components,it could affect its ability to manage its

265、 operations,and have an adverse impact on Applieds business,results of operations and customer relationships.In addition,if Applied needs to rapidly increase its business and manufacturing capacity to meet increases in demand or expedited shipment schedules,this may exacerbate any interruptions in A

266、pplieds manufacturing operations and supply chain and the associated effect on Applieds working capital.Moreover,if actual demand for Applieds products is different than expected,Applied may purchase more/fewer parts than necessary or incur costs for canceling,postponing or expediting delivery of pa

267、rts.If Applied purchases inventory in anticipation of customer demand that does not materialize,or if customers reduce or delay orders,Applied may incur excess inventory charges.The ability to attract,retain and motivate key employees is vital to Applieds success.Applieds success,competitiveness and

268、 ability to execute on its global strategies and maintain a culture of innovation depend in large part on its ability to attract,retain and motivate employees with key skills and experience.Achieving this objective may be difficult due to many factors,including fluctuations in global economic and in

269、dustry conditions,management changes,Applieds organizational structure,increasing global competition for talent,the availability of qualified employees,cost reduction activities(including workforce reductions and unpaid shutdowns),availability of career development opportunities,the ability to obtai

270、n necessary authorizations for workers to provide services outside their home countries,and the attractiveness of Applieds compensation and benefit programs,including its share-based programs.The loss or retirement of employees present particular challenges to the extent they involve the departure o

271、f knowledgeable and experienced employees and the resulting need to identify and train existing or new workers to perform necessary functions,which may result in unexpected costs,reduced productivity,and/or difficulties with respect to internal processes and controls.22Applied is exposed to various

272、risks related to protection and enforcement of intellectual property rights.Applieds success depends in significant part on the protection of its patents,trade secrets,copyrights and other intellectual property rights.Infringement of Applieds rights by a third party,such as the unauthorized manufact

273、ure or sale of equipment or spare parts,could result in uncompensated lost market and revenue opportunities for Applied.Policing any unauthorized use of intellectual property is difficult and costly and Applied cannot be certain that the measures it has implemented will prevent misuse.Applieds abili

274、ty to enforce its intellectual property rights is subject to litigation risks,as well as uncertainty as to the protection and enforceability of those rights in some countries.If Applied seeks to enforce its intellectual property rights,it may be subject to claims that those rights are invalid or une

275、nforceable,and others may seek counterclaims against Applied,which could have a negative impact on its business.If Applied is unable to enforce and protect intellectual property rights,or if they are circumvented,invalidated,rendered obsolete by the rapid pace of technological change,it could have a

276、n adverse impact on its competitive position and business.In addition,changes in intellectual property laws or their interpretation,such as recent changes in U.S.patent laws,may impact Applieds ability to protect and assert its intellectual property rights,increase costs and uncertainties in the pro

277、secution of patent applications and enforcement or defense of issued patents,and diminish the value of Applieds intellectual property.Third parties may also assert claims against Applied and its products.Claims that Applieds products infringe the rights of others,whether or not meritorious,can be ex

278、pensive and time-consuming to defend and resolve,and may divert the efforts and attention of management and personnel.The inability to obtain rights to use third party intellectual property on commercially reasonable terms could have an adverse impact on Applieds business.In addition,Applied may fac

279、e claims based on the theft or unauthorized use or disclosure of third-party trade secrets and other confidential business information.Any such incidents and claims could severely harm Applieds business and reputation,result in significant expenses,harm its competitive position,and prevent Applied f

280、rom selling certain products,all of which could have a significant adverse impact on Applieds business and results of operations.Applied is exposed to risks related to cybersecurity threats and incidents.In the conduct of its business,Applied collects,uses,transmits and stores data on information te

281、chnology systems.This data includes confidential information belonging to Applied or its customers or other business partners,as well as personally-identifiable information of individuals.Applied has experienced,and expects to continue to be subject to,cybersecurity threats and incidents ranging fro

282、m employee error or misuse to individual attempts to gain unauthorized access to information systems to sophisticated and targeted measures known as advanced persistent threats,none of which have been material to the Company to date.Applied devotes significant resources to network security,data encr

283、yption and other measures to protect its systems and data from unauthorized access or misuse.However,depending on their nature and scope,cybersecurity incidents could result in business disruption;the misappropriation,corruption or loss of confidential information and critical data(Applieds and that

284、 of third parties);reputational damage;litigation with third parties;diminution in the value of Applieds investment in research,development and engineering;data privacy issues;and increased cybersecurity protection and remediation costs.Applied is exposed to various risks related to legal proceeding

285、s.Applied from time to time is,and in the future may be involved in legal proceedings or claims regarding patent infringement,intellectual property rights,antitrust,environmental regulations,securities,contracts,product performance,product liability,unfair competition,misappropriation of trade secre

286、ts,employment,workplace safety,and other matters.Applied also on occasion receives notification from customers who believe that Applied owes them indemnification or other obligations related to claims made against such customers by third parties.Legal proceedings and claims,whether with or without m

287、erit,and associated internal investigations,may be time-consuming and expensive to prosecute,defend or conduct;divert managements attention and other Applied resources;inhibit Applieds ability to sell its products;result in adverse judgments for damages,injunctive relief,penalties and fines;and nega

288、tively affect Applieds business.There can be no assurance regarding the outcome of current or future legal proceedings,claims or investigations.The failure to successfully implement enterprise resource planning and other information systems changes could adversely impact Applieds business and result

289、s of operations.Applied is in the process of implementing new enterprise resource planning and related information systems in order to better manage its business operations,align its global organizations and enable future growth.This implementation requires the commitment of significant personnel an

290、d financial resources,and entails risks to Applieds business operations.If Applied does not successfully implement new enterprise resource planning and related information systems,or if there are delays or difficulties in implementing these systems,Applied may not realize anticipated productivity im

291、provements or cost efficiencies,and may experience interruptions in service and operational difficulties,such as its ability to track orders,timely manufacture and ship products,project inventory requirements,effectively manage its supply chain and allocate human resources,aggregate financial data a

292、nd report operating results,and otherwise effectively manage its business,all of which could result in quality issues,reputational harm,lost market and revenue opportunities,and otherwise adversely affect Applieds business,financial condition and results of operations.23Applied may incur impairment

293、charges to goodwill or long-lived assets.Applied has a significant amount of goodwill and other acquired intangible assets related to acquisitions.Goodwill and purchased intangible assets with indefinite useful lives are not amortized,but are reviewed for impairment annually during the fourth quarte

294、r of each fiscal year,and more frequently when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.The review compares the fair value for each of Applieds reporting units to its associated carrying value,including goodwill.Factors that could lead to

295、 impairment of goodwill and intangible assets include adverse industry or economic trends,reduced estimates of future cash flows,declines in the market price of Applied common stock,changes in Applieds strategies or product portfolio,and restructuring activities.Applieds valuation methodology for as

296、sessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance.Applied may be required to record future charges to earnings during the period in which an impairment of goodwill or intangible assets is determined

297、 to exist.Applied is exposed to risks associated with operating in jurisdictions with complex and changing tax laws.Applied is subject to income taxes in the United States and foreign jurisdictions.Significant judgment is required to determine and estimate worldwide tax liabilities.Applieds provisio

298、n for income taxes and effective tax rates could be affected by numerous factors,including changes in:(1)applicable tax laws;(2)amount and composition of pre-tax income in jurisdictions with differing tax rates;(3)plans to indefinitely reinvest certain funds held outside of the U.S.;and(4)valuation

299、of deferred tax assets and liabilities.An increase in Applieds provision for income taxes and effective tax rate could have a material adverse impact on Applieds results of operations and financial condition.As of October 29,2017,Applied intends to indefinitely reinvest approximately$4.5 billion of

300、cash,cash equivalents and marketable securities held by foreign subsidiaries and does not plan to repatriate these funds.Applied would need to accrue and pay U.S.taxes if these funds were repatriated.Income tax legislation in the U.S.,the“Tax Cuts and Jobs Act”,could possibly be enacted during the f

301、irst quarter of fiscal 2018,which could impact Applieds provision for income taxes,effective tax rate,results of operations and financial condition.For example,under legislative proposals requiring mandatory repatriation that are being considered,Applied would need to accrue U.S.taxes on previously

302、unrepatriated earnings.Consistent with the international nature of its business,Applied conducts certain manufacturing,supply chain,and other operations in Asia,bringing these activities closer to customers and reducing operating costs.In certain foreign jurisdictions,conditional reduced income tax

303、rates have been granted to Applied.To obtain the benefit of these tax incentives,Applied must meet requirements relating to various activities.Applieds ability to realize benefits from these incentives could be materially affected if,among other things,applicable requirements are not met or Applied

304、incurs net losses in these jurisdictions.In addition,Applied is subject to examination by the Internal Revenue Service and other tax authorities,and from time to time amends previously filed tax returns.Applied regularly assesses the likelihood of favorable or unfavorable outcomes resulting from the

305、se examinations and amendments to determine the adequacy of its provision for income taxes,which requires estimates and judgments.Although Applied believes its tax estimates are reasonable,there can be no assurance that the tax authorities will agree with such estimates.Applied may have to engage in

306、 litigation to achieve the results reflected in the estimates,which may be time-consuming and expensive.There can be no assurance that Applied will be successful or that any final determination will not be materially different from the treatment reflected in Applieds historical income tax provisions

307、 and effective tax rates.Applied is subject to risks associated with environmental and safety regulations.Applied is subject to environmental and safety regulations in connection with its global business operations,including but not limited to:regulations related to the development,manufacture and u

308、se of its products;handling,discharge,recycling and disposal of hazardous materials used in its products or in producing its products;the operation of its facilities;and the use of its real property.The failure or inability to comply with existing or future environmental and safety regulations could

309、 result in:significant remediation or other legal liabilities;the imposition of penalties and fines;restrictions on the development,manufacture,sale or use of certain of its products;limitations on the operation of its facilities or ability to use its real property;and a decrease in the value of its

310、 real property.Applied could be required to alter its manufacturing and operations and incur substantial expense in order to comply with environmental and safety regulations.Any failure to comply with environmental and safety regulations could subject Applied to significant costs and liabilities tha

311、t could adversely affect Applieds business,financial condition and results of operations.24Applied is exposed to various risks related to the global regulatory environment.As a public company with global operations,Applied is subject to the laws of the United States and multiple foreign jurisdiction

312、s and the rules and regulations of various governing bodies,which may differ among jurisdictions,including those related to financial and other disclosures,corporate governance,intellectual property,tax,trade,antitrust,employment,immigration and travel regulations,privacy,and anti-corruption.Changin

313、g,inconsistent or conflicting laws,rules and regulations,and ambiguities in their interpretation and application create uncertainty and challenges,and compliance with laws,rules and regulations may be onerous and expensive,divert management time and attention from revenue-generating activities,and o

314、therwise adversely impact Applieds business operations.Violations of law,rules and regulations could result in fines,criminal sanctions,restrictions on Applieds business,and damage to its reputation,and could have an adverse impact on its business operations,financial condition and results of operat

315、ions.Item 1B:Unresolved Staff CommentsNone.25Item 2:PropertiesInformation concerning Applieds properties is set forth below:(Square feet in thousands)United StatesOther CountriesTotalOwned.3,9641,6525,616Leased.8451,1531,998Total.4,8092,8057,614Because of the interrelation of Applieds operations,pro

316、perties within a country may be shared by the segments operating within that country.The Companys headquarters offices are in Santa Clara,California.Products in Semiconductor Systems are manufactured in Santa Clara,California;Austin,Texas;Gloucester,Massachusetts;Kalispell,Montana;Rehovot,Israel;and

317、 Singapore.Remanufactured equipment products in the Applied Global Services segment are produced primarily in Austin,Texas.Products in the Display and Adjacent Markets segment are manufactured in Alzenau,Germany;and Tainan,Taiwan.Other products are manufactured in Treviso,Italy.Applied also owns and

318、 leases offices,plants and warehouse locations in many locations throughout the world,including in Europe,Japan,North America(principally the United States),Israel,China,India,Korea,Southeast Asia and Taiwan.These facilities are principally used for manufacturing;research,development and engineering

319、;and marketing,sales and customer support.Applied also owns a total of approximately 269 acres of buildable land in Montana,Texas,California,Israel and Italy that could accommodate additional building space.Applied considers the properties that it owns or leases as adequate to meet its current and f

320、uture requirements.Applied regularly assesses the size,capability and location of its global infrastructure and periodically makes adjustments based on these assessments.26Item 3:Legal ProceedingsThe information set forth under“Legal Matters”in Note 14 of Notes to Consolidated Financial Statements i

321、s incorporated herein by reference.Item 4:Mine Safety DisclosuresNone.PART IIItem 5:Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMarket InformationThe following table sets forth the high and low closing sale prices for the periods presente

322、d as reported on the NASDAQ Global Select Market.Price Range HighLowFiscal 2017First quarter.$35.04$28.18Second quarter.$41.33$34.25Third quarter.$47.45$41.01Fourth quarter.$56.69$42.03Fiscal 2016First quarter.$19.26$16.08Second quarter.$21.56$15.64Third quarter.$26.90$19.61Fourth quarter.$30.57$25.

323、97Applieds common stock is traded on the NASDAQ Global Select Market under the symbol AMAT.As of December 8,2017,there were 2,898 registered holders of Applied common stock.27Performance GraphThe performance graph below shows the five-year cumulative total stockholder return on Applied common stock

324、during the period from October 28,2012 through October 29,2017.This is compared with the cumulative total return of the Standard&Poors 500 Stock Index and the RDG Semiconductor Composite Index over the same period.The comparison assumes$100 was invested on October 28,2012 in Applied common stock and

325、 in each of the foregoing indices and assumes reinvestment of dividends,if any.Dollar amounts in the graph are rounded to the nearest whole dollar.The performance shown in the graph represents past performance and should not be considered an indication of future performance.COMPARISON OF 5 YEAR CUMU

326、LATIVE TOTAL RETURN*Among Applied Materials,Inc.,the S&P 500 Indexand the RDG Semiconductor Composite Index*Assumes$100 invested on 10/28/12 in stock or 10/31/12 in index,including reinvestment of dividends.Indexes calculated on month-end basis.Copyright 2017 Standard&Poors,a division of S&P global.

327、All rights reserved.10/28/201210/27/201310/26/201410/25/201510/30/201610/29/2017Applied Materials100.00171.03207.01165.34293.64586.91S&P 500 Index100.00127.18149.14156.89163.97202.72RDG Semiconductor Composite Index100.00131.94167.25160.80193.36288.96DividendsDuring each of fiscal 2017,2016 and 2015

328、,Applieds Board of Directors declared four quarterly cash dividends in the amount of$0.10 per share.Applied currently anticipates that cash dividends will continue to be paid on a quarterly basis,although the declaration of any future cash dividend is at the discretion of the Board of Directors and

329、will depend on Applieds financial condition,results of operations,capital requirements,business conditions and other factors,as well as a determination by the Board of Directors that cash dividends are in the best interests of Applieds stockholders.$0$50$100$150$200$250$300$350$400$450$500$550$60010

330、/28/1210/27/1310/26/1410/25/1510/30/1610/29/17Applied Materials,Inc.S&P 500RDG Semiconductor Composite28Issuer Purchases of Equity SecuritiesThe following table provides information as of October 29,2017 with respect to the shares of common stock repurchased by Applied during the fourth quarter of f

331、iscal 2017 pursuant to publicly-announced stock repurchase programs approved by the Board of Directors in June 2016 and in September 2017,which authorized up to an aggregate of$5.0 billion in repurchases.PeriodTotal Number ofShares PurchasedAveragePrice Paidper ShareAggregatePrice PaidTotal Number o

332、fShares Purchased asPart of PubliclyAnnounced ProgramsMaximum DollarValue of SharesThat May Yet bePurchased Underthe Programs(In millions,except per share amounts)Month#1(July 31,2017 to August 27,2017)1$43.68$581$937Month#2(August 28,2017 to September 24,2017)3$45.801393$798Month#3(September 25,201

333、7 to October 29,2017)4$52.961884$3,610Total.8$48.65$3858Item 6:Selected Financial DataThe following selected financial information has been derived from Applieds historical audited consolidated financial statements and should be read in conjunction with the consolidated financial statements and the accompanying notes for the corresponding fiscal years:Fiscal Year(1)20172016201520142013(In millions