Applied Sees Another Strong Year for Israeli Unit

15 November, 2026

Sales at Applied’s Israeli unit are on track to rise more than 50% in 2026. The company expects chipmaking equipment demand to grow over 30% in 2027

Pictured above: Applied Materials’ Israeli headquarters in Rehovot, home to its Process Diagnostics and Control unit.

Applied Materials’ Rehovot-based process control unit is on track to grow sales by more than 50% in 2026 and is preparing to launch a new generation of inspection systems for chipmaking and advanced packaging. Speaking on the company’s earnings call, CEO Gary Dickerson said he expects another year of strong growth for the unit, known as PDC, in 2027. Applied reported record quarterly revenue of $10.41 billion, up 53% from a year earlier.

Applied first projected growth of more than 50% for PDC in August. On the latest call, Dickerson said sales were growing by more than 50% in each of the unit’s two main businesses, electron-beam systems and optical inspection. Asked whether PDC could outgrow Applied’s broader semiconductor equipment business in 2027, he said he expected strong growth in both and gave no specific forecast for the unit.

From Rehovot to AI Chip Production Lines

PDC, short for Process Diagnostics and Control, develops and manufactures systems in Rehovot that measure features and detect defects on silicon wafers. As transistor structures get smaller and more complex, tiny deviations that can reduce the share of usable chips become harder to spot. “You can’t fix what you can’t see,” Dickerson said. Electron-beam systems, known as eBeam tools, can image fine details within those structures and help chipmakers improve yields, he said.

Dickerson said Applied plans to bring new eBeam systems to market and is developing optical inspection technology for advanced packaging. An advanced packaging inspection platform is expected to launch in 2027. As manufacturers combine more logic dies and high-bandwidth memory (HBM) in a single package, catching defects during assembly becomes increasingly important. A flaw at one of the connections can compromise the entire package.

Applied does not break out PDC’s results in its quarterly reports. In an October investor presentation, the company projected more than $3 billion in worldwide revenue from inspection and metrology systems and services in 2026, including about $2 billion from eBeam.

Record Revenue and a Strong Outlook for 2027

Applied’s revenue rose 21% to $34.45 billion in the fiscal year ended October 25. Fourth-quarter adjusted earnings per share jumped 92% to $4.16. Semiconductor Systems, the company’s largest segment, generated about $8 billion in quarterly revenue, up from $4.9 billion a year earlier. Equipment for DRAM production accounted for nearly a third of the segment’s revenue. Applied expects revenue of about $11.1 billion in the current quarter, above analysts’ estimates. Its shares fell 2.74% on Friday.

Applied expects global demand for wafer fab equipment to rise by more than 30% in 2027, led by investment in advanced logic, DRAM and advanced packaging. The company now projects its own advanced packaging revenue will rise about 90% in 2026, up from its earlier forecast of more than 70%. Dickerson said the pace of industry growth next year will depend on how quickly chipmakers can build cleanrooms and equipment suppliers can secure more components. Applied’s largest customers are already sharing demand forecasts eight quarters ahead.

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