Foundry and Logic Buy Two Machines in ThreeWide moat

Applied Materials (AMAT) — moat facet

Two of every three machines Applied sells go into logic chips, where each new transistor design creates steps with no installed rival.

Most of Applied's machines go to the companies that make logic chips. Foundry, logic and other customers took 67% of Semiconductor Systems revenue in fiscal 2025, 68% in 2024 and 77% in 20231. In the first nine months of fiscal 2026 the share was 65%2, and 67% again in the quarter to July3.

Foundry, logic and other share of systems revenue (%)59%FY202060%FY202166%FY202277%FY202368%FY202467%FY2025Applied Materials Forms 10-K FY2022 and FY2025
Logic peaked at 77% when memory spending collapsed.

This is where Applied has chosen to be. The chief executive described the company in November 2025 as "well positioned at the highest value technology inflections"4, naming leading-edge logic first. New transistor structures and new ways of wiring a chip require new deposition and etch steps, and each new step is a chance to sell a tool that has no installed competitor yet.

The logic share has moved around a good deal. It was 59% in fiscal 2020 and 60% in 20215, when memory makers were spending heavily, and peaked at 77% in 20236 as memory spending collapsed. The swings are a reminder that the mix is set by customers' budgets, not by Applied.

Logic customers are also few. The company's two largest customers took about 19% and 15% of revenue in fiscal 20257, and the Major Clients pages explain what Applied's revenue by country suggests about who they are.

The three quarters of fiscal 2026 show how quickly the mix can move inside a year. Foundry and logic took 62% of systems revenue in the first quarter, when DRAM took 34%8, then 67% in the second and third910. Across the nine months the share was 65% and DRAM 29%11.

Logic spending is also where Applied's growth has been steadiest across cycles. Foundry, logic and other rose from 59% of systems revenue in fiscal 202012 to between 65% and 77% in every year since 202213. The memory share rises and falls around it.

Logic is where this business earns its standing. The split is the thing to follow each quarter; a logic share that sinks below 60% for several quarters without memory spending rising would say Applied is losing the new steps it depends on.

Moat trajectory: Holding steady

Logic 67% of systems revenue in FY2025 and Q3 FY2026.

The number that tests this moat
Reported
Foundry and logic share of systems revenue, latest quarter
67% (Q3 FY2026)

Exposure to the leading edge; a share below 60% without a memory boom would mean lost logic steps.

Source: Applied Materials Q3 FY2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
The Leading Edge Moves on a Few Roadmaps
A single roadmap slipping at one of Applied's two largest customers can move a year of orders.
References
  1. ReportedFoundry, logic and other customers took 67% of Semiconductor Systems revenue in fiscal 2025, 68% in 2024 and 77% in 2023.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - Semiconductor Systems revenue by end market. — FY2025 · publ. 12 December 2025 · source ↗
  2. ReportedIn the first nine months of fiscal 2026 the share was 65%, and 67% again in the quarter to July.
    Applied Materials Form 10-Q for the quarter ended 26 July 2026 - FY2026 segment basis (200mm moved to Semiconductor Systems), nine-month results, customer concentration, geography, the BIS settlement and the balance sheet - nine-month results, customer concentration, geography, capital returns and legal matters. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  3. ReportedIn the first nine months of fiscal 2026 the share was 65%, and 67% again in the quarter to July.
    Applied Materials third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - record revenue, segment results, revenue by geography, employees and fourth-quarter guidance - highlights, income statement, cash flow, quotes and fourth-quarter guidance. — Q3 FY2026 · publ. 13 August 2026 · source ↗
  4. ReportedThe chief executive described the company in November 2025 as "well positioned at the highest value technology inflections", naming leading-edge logic first.
    Applied Materials fourth-quarter and fiscal 2025 results release, Form 8-K exhibit 99.1 - full-year income statement, cash flow, balance sheet, Display results and one-off items. — FY2025 · publ. 13 November 2025 · source ↗
  5. ReportedIt was 59% in fiscal 2020 and 60% in 2021, when memory makers were spending heavily, and peaked at 77% in 2023 as memory spending collapsed.
    Applied Materials Form 10-K for fiscal 2022 - segment results for FY2020-FY2022 including Display and Adjacent Markets, employees, China revenue, the Kokusai termination fee and backlog. — FY2022 · publ. December 2022 · source ↗
  6. ReportedIt was 59% in fiscal 2020 and 60% in 2021, when memory makers were spending heavily, and peaked at 77% in 2023 as memory spending collapsed.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - Item 1 business: history, products, employees and strategy. — FY2025 · publ. 12 December 2025 · source ↗
  7. ReportedThe company's two largest customers took about 19% and 15% of revenue in fiscal 2025, and the Major Clients pages explain what Applied's revenue by country suggests about who they are.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - segment note: revenue, operating income, gross margin, research, capital spending and goodwill. — FY2025 · publ. 12 December 2025 · source ↗
  8. ReportedFoundry and logic took 62% of systems revenue in the first quarter, when DRAM took 34%, then 67% in the second and third.
    Applied Materials first-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - the BIS charge, the EPIC Center and manufacturing capacity. — Q1 FY2026 · publ. 12 February 2026 · source ↗
  9. ReportedFoundry and logic took 62% of systems revenue in the first quarter, when DRAM took 34%, then 67% in the second and third.
    Applied Materials second-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - the 15% dividend increase and the calendar-2026 outlook. — Q2 FY2026 · publ. 14 May 2026 · source ↗
  10. ReportedFoundry and logic took 62% of systems revenue in the first quarter, when DRAM took 34%, then 67% in the second and third.
    Applied Materials third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - record revenue, segment results, revenue by geography, employees and fourth-quarter guidance - segment results and end-market mix. — Q3 FY2026 · publ. 13 August 2026 · source ↗
  11. ReportedAcross the nine months the share was 65% and DRAM 29%.
    Applied Materials Form 10-Q for the quarter ended 26 July 2026 - FY2026 segment basis (200mm moved to Semiconductor Systems), nine-month results, customer concentration, geography, the BIS settlement and the balance sheet - nine-month results, customer concentration, geography, capital returns and legal matters. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  12. ReportedFoundry, logic and other rose from 59% of systems revenue in fiscal 2020 to between 65% and 77% in every year since 2022.
    Applied Materials Form 10-K for fiscal 2022 - segment results for FY2020-FY2022 including Display and Adjacent Markets, employees, China revenue, the Kokusai termination fee and backlog. — FY2022 · publ. December 2022 · source ↗
  13. ReportedFoundry, logic and other rose from 59% of systems revenue in fiscal 2020 to between 65% and 77% in every year since 2022.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - Semiconductor Systems revenue by end market. — FY2025 · publ. 12 December 2025 · source ↗
Sources
Generated September 25, 2026