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Applied Materials CFO: AI Chip Demand 'Extremely Strong' as Leading-Edge Capacity Stays Tight
Semiconductor equipment maker sees continued constraints in logic, DRAM, and advanced packaging
Published on Mar. 11, 2026
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Applied Materials CFO Brice Hill said demand signals tied to artificial intelligence-driven semiconductor investment remain 'extremely strong,' with leading-edge logic, DRAM, and advanced packaging currently constrained by capacity and cleanroom space. He cited major increases in cloud service provider investment in data center AI CapEx, which is expected to rise from $600 billion this year to $700 billion next year. Hill said Applied is seeing customer pull for 'more advanced logic, more DRAM, and more advanced packaging solutions,' and characterized those three areas as constrained at the leading edge.
Why it matters
The capacity constraints in leading-edge semiconductor manufacturing highlighted by Applied Materials' CFO reflect the ongoing challenges the industry faces in keeping up with surging demand, particularly for AI-related chips. This has implications for the broader technology landscape, as AI-powered applications continue to proliferate across industries.
The details
Hill said Applied is already seeing customers schedule tool slots into 2027 and is pushing for longer-range planning. He described two layers of supplier planning: two-year visibility for capacity and hiring decisions, and part-level detail within one year to ensure suppliers can meet specific needs. On memory and advanced packaging, Hill said high-bandwidth memory (HBM) is becoming a meaningful portion of DRAM production, estimating about 15% of DRAM wafer starts are currently allocated to HBM. He called HBM a 'double opportunity' for equipment demand because of its more wafer-area intensive nature and the additional processing steps required for stacking.
- Applied expects leading-edge data center demand to overtake smartphone components by 2029.
- Hill said 2024 was 'a very strong year' for advanced packaging performance, including an initial HBM equipment build-out on the DRAM side of about $700 million, which was 'a little less in 2025' after the initial build-out slowed.
The players
Brice Hill
The Chief Financial Officer of Applied Materials, a major semiconductor equipment manufacturer.
Micron
A semiconductor company that is joining Applied's EPIC lab as part of a collaboration process.
Samsung
A semiconductor company that is a founding partner of Applied's EPIC lab.
What they’re saying
“We must not let individuals continue to damage private property in San Francisco.”
— Robert Jenkins, San Francisco resident (San Francisco Chronicle)
What’s next
The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.
The takeaway
This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.
