'Inventory Build’ in TV Supply Chain Suggests Some 2020 Softness, Applied Materials Says

Applied Materials finished fiscal 2019 ended Oct. 27 with revenue down by about a third from the year earlier, as the company had forecast several quarters ago (see 1902150002). Applied supplies large-area deposition systems for LCD and OLED display manufacturing and can be a bellwether of display industry health. It expects fiscal 2020 revenue to stay “at similar levels as we bounce along the bottom of this market cycle,” said CEO Gary Dickerson on a Thursday call. “In this environment, our display business remains profitable even as we fund R&D for next-generation products. We still believe the display market provides good long-term growth opportunities for Applied as the industry becomes increasingly technology-intensive.” It sees “recovery” in the smartphone display business in the new year, “creating incremental growth for the company,” said Dickerson. Since many panel makers delayed their investments in new fabs, “there's a bit of inventory build on the TV side,” he said. “So as we look forward into 2020, we think there's going to be some incremental softness on the TV side that reflects all of the news that's out in the market to date.”