Applied Materials is arguably the ultimate 'pick and shovel' AGI beneficiary - every AI chip in the world is manufactured using its equipment, and AI demand is driving an unprecedented cycle of semiconductor capital investment.
Applied Materials is the world's largest supplier of semiconductor manufacturing equipment. The company designs and sells machines used to fabricate semiconductor chips, flat panel displays, and solar cells. Its equipment is essential for deposition, etching, ion implantation, inspection, and other critical steps in chip manufacturing. Applied Materials serves every major chip foundry and IDM globally and benefits from rising semiconductor complexity driven by AI, IoT, and advanced nodes.
Applied Materials' customers are semiconductor chip manufacturers including foundries (TSMC, Samsung Foundry, GlobalFoundries), integrated device manufacturers (Intel, Samsung, SK Hynix, Micron), and memory/logic chipmakers worldwide. Display customers include BOE, Samsung Display, and LG Display. The customer base is highly concentrated - TSMC, Samsung, and Intel are major customers.
Applied Materials makes the machines that manufacture semiconductor chips -- deposition, etch, ion implantation, inspection, and CMP equipment. AGI cannot replace physical manufacturing equipment. Every chip (whether CPU, GPU, memory, or AI accelerator) must be fabricated using Applied Materials' tools. The company is a 'pick and shovel' play for the entire semiconductor industry. AMAT's customers are semiconductor fabs (TSMC, Samsung, Intel, GlobalFoundries, SK Hynix, Micron) -- companies that manufacture the physical chips the world runs on. These customers BENEFIT from AI/AGI because AI drives explosive demand for advanced chips.