Welcome to the Applied Materials Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. I would now like to turn the conference over to Michael Sullivan. Please go ahead, sir.

Good afternoon. And thank you for joining us. I’m Mike Sullivan, Head of Investor Relations at Applied Materials. We appreciate you joining us for our third quarter of fiscal 2018 earnings call, which is being recorded. Joining me are Gary Dickerson, our President and CEO and Dan Durn, our Chief Financial Officer. Before we begin, let me remind you that today’s call contains forward-looking statements, including Applied’s current view of its industries, performance, products, share positions and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially and are not guarantees of future performance. Information concerning these risks and uncertainties is contained in Applied’s most recent Form 10-Q and 8-K filings with the SEC. All forward-looking statements are based on management’s estimates, projections and assumptions as of August 16, 2018, and Applied assumes no obligation to update them. Today’s call also includes non-GAAP financial measures. Reconciliations to GAAP measures are contained in today’s earnings press release and in our reconciliation slides, which are available on the Investor Relations page of our Web site at appliedmaterials.com. And now, I’d like to turn the call over to Gary Dickerson.

Thanks Mike. I’m pleased to report that our revenue for the quarter was up 19% compared to the same period last year and the second highest in the Company's history. Fiscal 2018 remains on track to be another record setting year for Applied Materials, and we expect each of our major businesses to deliver strong double-digit growth. In today's call, I’ll start by providing our perspective on the market environment and our business performance. Then I’ll lay out our views on the industry's future growth drivers and describe how we’re evolving our strategy to take full advantage of the tremendous opportunities ahead. In aggregate, we see ongoing strength in our markets. Customers are making rational investments in new capacity resulting in well balanced supply demand dynamics. At the same time, they are aggressively pursuing their development roadmaps with healthy spending on next generation technologies. Demand for wafer fab equipment is on track to be an all-time record in 2018, and our view of 2019 remains positive, our thesis that spending in 2018 plus 2019 combined will exceed $100 billion remains firmly intact. The details within our 2018 forecast are consistent with the view we shared during our last call with the exception of a recent downward revision to our foundry outlook. As foundry customers optimize existing capacity, they’ve trimmed their capital spending plans for the year. They are still pushing forward with leading-edge developments, prioritizing current investment towards long lead time equipment, which is a positive leading indicator for 2019. NAND bit demand is expected to grow at about 40% this year with bit supply growing slightly faster. As a result, we see spending levels flat to modestly down from last year's record levels. DRAM investments are strong, up approximately 50% year-over-year as customers invest in capacity and technology to…

Thanks, Gary. In Q3, Applied delivered revenue and non-GAAP earnings that were both within 2% of the all-time records we set last quarter. On a year-over-year basis we generated strong revenue growth, and increased non-GAAP EPS by 40%, even as our memory customers made capacity adjustments during the period. We continue to see the wafer fab equipment market and Applied Materials being sustainably larger and less cyclical today than in the past and as Gary outlined, our outlook for 2019 and the longer term remains very positive. Given the adjustments in memory markets along with recent foundry CapEx reductions, I want to offer you a little help this quarter with how we see demand profiling from 2018 into 2019. My philosophy is to tell you what I see today based on our market analysis and customer engagements. I can't guarantee what happens in the economy in policy circles or in our markets, but I’m happy to be transparent with you and let you make your own judgment about the external factors. Our fiscal Q4 business outlook calls for semiconductor systems revenue to decline by about 4% year-over-year with non-GAAP earnings to increase by about 3% year-over-year at the midpoint to $0.96. From what I can see today, semiconductor systems revenue will be flat to slightly higher sequentially in Q1. Non-GAAP earnings will be slightly higher sequentially in Q1 as well, even when you include $0.05 headwind from an increase in our tax rate that takes effect in fiscal 2019. Our current outlook in the Q2 and the balance of fiscal 2019 is for continued growth. Returning to the bigger picture Gary described. You may notice how resilient the industry and the Company have become, particularly given the supply and demand adjustments now taking place in memory. Some of us remember…

Thanks, Dan. And now to help us reach as many of you as, we can please ask just one question at this time. If you have an additional question later, please just call the operator, we’ll do our best to answer it later in the call. Let’s please begin.

Thank you [Operator Instructions]. Our first question comes from C.J. Muse of Evercore ISI. Your line is now open.

I guess for my question, can you talk to just adjustments that you saw both memory and foundry recently. And then as you think about calendar ’19, can you discuss the puts and takes in terms of how you’re seeing each of the end markets, whether foundry, logic, DRAM, NAND. And as part of that if you could include your thoughts around clean room availability and timing of investments through the calendar year? Thank you.

Given the announcements in the last month, we’re now seeing some movements in foundry capital spending. That's reflected in the guidance we just provided for fiscal Q4. All other assumptions from last quarter still holds true. To give you more color on what we're seeing in foundry, we continue to see growth in trailing node geometries. The split between leading edge and trailing node geometries historically was 80-20 then it became 60-40. Today, it’s more like 50-50. And specifically, in 2018, we see trailing node spend up and leading edge node spend down. And on the leading edge, we’re seeing a prioritization towards spend to very long lead time items, which we believe is a good indicator of our business going into 2019 and beyond. In 2019, we expect both leading and trailing node geometries to be healthy. When we look at 2018 and 2019, just to provide the broader context; 2017 was an all-time record; 2018 is likely to be the new record being up over '17; and we’re seeing strength across all device types. Gary, in his prepared comments said 2018 plus 2019 combined will exceed $100 billion. And I think it’s too early to make a point estimate on either year. But based on customer conversations we’re having, 2019 will be above $50 billion and still healthy across all device types. And so we're really seeing a strong end market and how things profile into 2019.

And I think C.J. I might add a comment something about capacity at the fab level for some of it. So I think [multiple speakers] view hasn’t really changed.

Yes, so the best I can get to from a capacity standpoint is we’re tracking 32, 300 mm factories around the globe that still have to be facilitized. The average size of those 31 fabs is about 72,000 wafer starts per month and it represents about 200 billion of potential floor space for WFE equipment. So in terms of ability to deploy capacity in a fairly rapid fashion, I think the infrastructure and the build is out there. I think it’s just a matter of letting the demand led environment lead our customers’ investment profile to maintain rational supply demand dynamics and strong pricing in their markets.

Thank you. Our next question comes from Atif Malik of Citigroup. Your line is now open.

Dan, thank you for updating us on the $5 2020 target model. I have a question on the display segment. It looks like you guys are on track to do 30% year-over-year growth for fiscal '18. On the last earnings call, you guys talked about the decline of 15% to 20% for fiscal '19. I was curious if anything has changed to that outlook in the mobile or the DE markets? Thank you.

So our display forecast is really unchanged similar to what we communicated previously. As you said, '18 is going to be around $2.5 billion, up more than 30% from the previous year and up from $600 million in 2012, so tremendous growth overall in display. And we still see 2019 down in the 15% range and 2020 to be higher than 2018. In terms of mix, 2018-2019 is more weighted towards TV and one thing I’d remind everybody for large-screen TVs, if you compare Gen 10.5 to Gen 8.5 you get eight TVs versus three. So our view on the TV market is similar to what we previously communicated. And overall again we see 2020 up over 2018 continue to see display as a great growth driver for the company. Future technology inflections are more capital-intensive and we have a pipeline of new capabilities that create a strong opportunity for future growth.

Thank you. Our next question comes from Pierre Ferragu of Newstreet Research. Your line is now open.

I’d like to come back very rapidly on C.J.’s question and really make a difference between memory and logic. So if I understood you correctly than what you're saying is that in memory what you saw three months ago and that led you to tell us you could reasonably expect sequential growth between Q3 and Q4 in semiconductor system, that outlook didn’t change which meant that the low points in memory was Q3 and things should be improving from there based on your visibility today. And then the new thing is only logic and the push back to put out you mentioned about logic. And then on the back of that, my question would be how much confidence do you have in Q4 numbers is also baking in low points in logic, which means that we would have gone through in just a couple of quarters a pull back in memory and a pull back in logic and with therefore limited reason so they’re negative surprise down the line?

A couple of comments, on the memory side, everything that is out in the market today from an information standpoint it was reflected in our guide and that's playing out as we thought, so there's no incremental news or information. And the delta between what we thought -- how we thought Q4 was going to profile three months ago versus what we’re guiding to today is a foundry driven dynamic. So you used the word logic we differentiate between logic and foundry. And so I just want to be clear that our view is coming out of the foundry market. And it was versus our expectations on how Q4 was going to profile. So that is the big delta between what we thought three months ago. And as we roll the clock forward, the spending in foundry today is being driven by very long lead time items, which we see as a lead indicator for our business where the lead times are much shorter as capacity comes online to meet customer demand. So I think the set up around 2019 for us as a result of that in the foundry market looks good.

Thank you. Our next question comes from Krish Sankar of Cowen. Your line is now open.

Gary, earlier you mentioned some comments on the NAND market specifically what you’re seeing in terms of the demand growth of about 40% and supply growth little bit more in that. Just wondering if you could give us a little more color on how you see the NAND WFE profile going to the back end of this year and maybe into 2019, just based on some of those comments. And I guess the implication would be there might be some pricing pressure in the NAND market of the demand continues to play out. And if so would you expect that NAND WFE to see some slow down towards the back end of the year, because of pricing or do you think investments in upgrades to the 96 layers or above if that will continue and hence continue to keep NAND WFE strong?

So I guess here is the comment that I would make on the NAND market. We signaled a quarter ago that we’re going to see some back half weakness I think that’s playing out as we expected. In Gary prepared comments, he talked about the NAND market being down year-over-year versus 2017, we see that playing out. And as we look at the health of the market, if we take a step back and just look at the macro drivers driving semiconductor demand today, those macro drivers are impact and playing out as expected, things like artificial intelligence and data economy are going to drive structurally larger semiconductor industry demand as the demand for those devices to fuel those trends increases over time. As we take a look at customer profitability, it's better today than it's ever been. And they're investing a lot of money. But as a percentage of their profitability, it’s down substantially since 2012. In the memory market over that time period, CapEx as a percentage of the EBITDA is down 40%. And the customers are doing a better job of modulating supply and making demand lead investments. There will always be adjustments from a supply-demand standpoint to keep those markets in balance. And I think our customers have done a good job to strike the right balance in the environment that we’re in. And as we look forward into 2019, I’ll come back to an earlier comment on one of the earlier questions. We see a healthy dynamic across all four device types into 2019.

Thank you. Our next question comes from John Pitzer of Credit Suisse. Your line is now open.

Guys similar to your U.S. peers, you’re calling your October quarter as the bottom, a little bit different than U.S. peers. They’re a little bit emphatic about growth into their December quarter your January quarter. And I am just curious is that a function of your being over-indexed for foundry or not as indexed to 5 nano-meter on the process equipment side, i.e. if you were to look at your domestic peers and compare the apples-to apples-business. Would you be more confident that your January semi equipment business would be up sequentially?

So I think there is a couple things that play, John. And thanks for question. The first thing I would say is it's hard for me to know exactly what the assumptions were in each of the competitors’ and peers’ forecasts. So it's hard to make a direct comparison of what we see differently than others. What I would say is as our guide reflects everything we see our footprint is broader than our peers. We’re exposed to more of those end markets and device types. And the guidance we have reflects our view of the world and the conversations we’re having with our customers. From a foundry specific standpoint, we emphasize the fact that spending on the leading edge today is prioritizing some very long lead time items for capacity that will come online in the next year, 18 months which is a nice set up for shorter lead time tools, which creates a nice opportunity for us going into 2019. So it’s hard to be very specific on a comparative basis of how we’re profiling differently than others. All we can try to do is be transparent with what we see developing in the market and how our conversations with customers are profiling.

Thank you. Our next question comes from Harlan Sur of JP Morgan. Your line is now open.

Can you guys just help us understand the dynamics around the foundry push-outs? If I look at SEMICON coverage universe, some of the big complex as we see guys, Qualcomm, AMD, Xilinx, Qualcomm, so on, 7 nanometer tape out looks actually quite significant that’s going to start to around beginning of next year. So if you could just help us understand the rationale for your views on what you think in terms of why the push-out of investments here into second half of this year? And maybe just also address the breath of the foundry push-out. Is it primarily one customer or is it multiple customers?

As we take a look at the foundry segment, what we can reflect in our guide is what gets communicated from our customer base. And the customers have done a very good job in the foundry space, managing a supply statement commensurate with where they see demand coming from. As you now, tape outs come and capacity gets put in place. And so there's a pretty close synchronization in that market as the business materialize, capacity gets deployed to meet that demand statement. So we feel pretty good that what's in the market today from a capacity standpoint is able to absorb the demand that's coming into the foundry space. The second part of your question, over the past month, we’ve been reading about public comments on adjustment in the foundry spending reflects conversations we have with the customer base. You’re now seeing that reflected in our guidance going forward. The adjustment we’re seeing is primarily from what you've been reading about, but not exclusively one customer.

Our next question comes from Romit Shah of Nomura Instinet. Your line is now open.

I guess two part from me, and I mean you made the comment, Gary, in your prepared remarks that the business is seeing less fluctuations. But you three months ago said that July was going to be the bottom and October would grow and now you’re guiding October revenues down about 10%. So how was it that the business is more aligned and less cyclical than what we’ve seen [Technical Difficulty]? And I guess as a second part to that DRAM spending, I understand the strong, but all indications are that DRAM price is going to be down in Q4. So what gives you confidence that this isn’t the next -- DRAM is not the next year to drop? Thank you.

When we contemplated our July guidance and how October was going to profile, it was conditioned on set of conversations and a set of knowledge that was in the market. Subsequent to that, there was an adjustment in spend profiles in the foundry space, so new information became available and our guidance reflects all of the information that's out there today. When I take a step back and we talk about resilience and we talk about less cyclicality, let's talk about the overall markets and then specifically apply it to Applied Materials. 2017 in the WFE space was an all-time record year. 2018 is going to be up over ‘17 with strength across all device types in an environment where we’re talking about re-profiling of both, memory and foundry spend. And so I think that's a pretty strong statement from an end market standpoint that the industry is evolving in ways that I think will accrue benefits to us going forward. When we take a step back and look at Applied specifically in an environment characterized by those same pressures re-profiling memory and foundry spend. We talked about EPS in my prepared comments a single quarter is now larger than what this company used to do in a full year just a short time ago. And I think that's a pretty strong statement that our business is more resilient and less cyclical than we've seen in the past. So we feel pretty good about that context in those statements. And Romit, what was the second part of your question?

I was curious about DRAM, DRAM spending has been strong, but it looks like in Q4 DRAM prices could be down. And given that we saw earlier in the year weakness in NAND that preclude a decline in NAND spend. And I guess I'm [Technical Difficulty]…

So I guess the best way I would address that Romit is there can always be changes in markets what we’re giving perspective on today is what we're seeing in the market. The supply demand balance has been reasonably [Technical Difficulty] from DRAM standpoint, it’s led to pricing stability. It's something the customers monitor very granularly. And they’ve been very disciplined, from an investment standpoint, making demand led investments. Taking a step back [Technical Difficulty] I think the longer term demand drivers around silicon, DRAM, NAND, logic, foundry, all device types, are still there. And so if there are short-term disruptions, I don't think it takes -- it changes our long-term view of how these markets evolve. And so we view the market still is healthy.

Thank you. Our next question comes from Tim Arcuri of UBS Securities. Your line is now open.

Dan, I wanted to ask a question about SSG share. So even if I assume like $51 billion this year, which it sounds like it’s probably going to be at least that, if not higher. Other guys are saying $52 billion or $53 billion. It still looks like based upon your guidance for the fiscal Q1 that you’re still going to lose a little bit of WFE share this year after losing a little bit last year as well. Now maybe that $51 billion number is too high or something. But even if I look at the 2020 model, your comments on that, you said SSG is going to still be about $11.6 billion or higher, which is in line with your model. But your old model was at $45 billion WFE. And now it seems like you're saying that $50 billion is the new normal. So it seems like the share assumption has come down a bit, so I’m wondering what’s your read into all that? Thanks.

So I think -- so last year, the share wasn’t down. I think if you go back to the previous six years, the share was up or flat, mostly up in all of the previous six years. So if you take an overall look at the Company over the last few years. One of the big things that we've driven is a much better balance across all device types. So if go back to 2013, we had only greater than 20% share in foundry, less than 15% share in NAND, DRAM and logic. Since 2013, we’ve grown the memory revenue 5x and 7% share growth and almost 2x growth in revenue and logic. So again, tremendous balance across all the device types versus really just being more foundry focus. And what I would say going forward that certain Dan reiterated that we would exceed the model for 2020. And if I look at the Company, how we’re positioned, we’re in a great position for next technology nodes, a very strong pipeline of new products across many markets and compelling integrated material solutions, and we talked about some of that over the last two months. And in the new products in material solutions we’ll introduce some significant new capabilities in the next 12 months and beyond. And also, if you look from a macro perspective, I was the speaker at the AI Design Forum and the DARPA conferences and some of the themes that came out of that were around AI, Big Data being a major opportunity, at the same time, Moore's Law's challenged. So at those conferences and you see many people talking about the future being about materials, new structures, 3D driving future innovation, enabling AI, Big Data, power performance area and cost, future logic, memory, patterning packaging. And at one of those conferences, I gave examples of new capabilities, including three orders of magnitude improvement leakage current that provides lower power performance. And there’s again a very large value in time-to-market. So when you think about going from materials to systems, there's tremendous value in accelerating that whole process going from materials, to single process test, to integrated materials, to structures, to devices, to packages, to systems. And I really deeply feel Applied’s never been in a better position to use our breath to enable these new capabilities. So bottom line from a position standpoint, we've never been in a better position. We have a very strong pipeline of new products integrated material solutions, and Applied really to the foundation of accelerating these AI, Big Data industry inflections.

Thank you. Our next question comes from Toshiya Hari of Goldman Sachs. Your line is now open.

Gary, I was hoping to get an update on how you view your near and medium term opportunity in China. Obviously, there's lots going on from a political/trade perspective. I think some of your customers are making some progress on the technology front. I think one of your NAND customers had a pretty big presence at the Flash Memory Summit last week. So just curious what you're seeing today, and if you've seen any pull-ins from your customers in China? Thank you.

Our current forecast for China is in line with our prior assumptions. 2018 is going to be a great year for Applied. We’ll grow faster than the market. And based on our mitigation plans, we don't see any meaningful impact from tariffs that have imposed that I know people are wondering about. So overall, strong position in China. Regarding the geopolitical situation, certainly, we believe in fair trade and that successful resolution -- the current situation is important the overall ecosystem. And we believe that’s the likely ultimate outcome. Relative to Applied, we will continue to monitor the impact of any future developments to Applied supply chain customers and take any actions that are needed to mitigate impact to Applied and our customers. Relative to technology positions, I think nothing has really changed versus what we thought before. China will continue to incrementally invest. This year, the domestic business is more heavily weighted to foundry logic than memory. Similar to 2017 was more foundry logic. 2019 we see more weighted towards foundry logic. But China will definitely continue to incrementally invest. We don't see any hockey-stick relative to future investment. And we still believe it’s going to take a long time for their technology to mature to get anywhere close to leading-edge. But again, incrementally, we still see China as a very positive market for Applied.

Thank you. Our next question comes from Patrick Ho of Stifel. Your line is now open.

Gary, in the past Analyst Days, which by the way we have an update on when you think this year the Analyst Day you will be where and when. You’ve talked about capital intensity trends, particularly for the NAND industry and how that’s positively impacted Applied Materials as the industry moves to 96 layers and above. Can you give us a little bit of an update on Applied’s position both in its core edge and disposition businesses but also in other areas like CMP and process control where you gained share in the past and you’re looking to gain more share?

So I think it was 2000 -- maybe it was 2013, we talked about the 2D -- the 3D NAND inflection and the business moving from LIFO intensive to edge and deposition intensive. And as I talked about earlier, we’ve grown our memory revenue from 2013 about 5x, we’ve increased share 7%. We’re optimistic that the scaling is going to continue for 3D NAND. And we have some really tremendously enabling capabilities, the edge business for us is continuing to grow. Our conductor edge share is in a leadership position. We have new capabilities that we’re bringing to market in NAND. So we're very optimistic on edge. We’re optimistic in terms of deposition. CMP steps are growing in 3D NAND. So again overall I’m very optimistic about the market and our position.

And guys maybe I'll give an update on the Analyst Day. So we're looking at New York probably for the next one. I’ve got a venue that’s on hold. What we haven’t finalized is the date. And I’ve really got two choices that we’re thinking about. One is we squeeze it in before the end of the year. What I’m thinking about is if we do that, we’re going to give a long term outlook that sounds a lot like what we did at SEMICON and AI Design Forum. The other choice is to save the meeting for next year. If we do that, what we’ll be able to do is give you some updates on some of the products that we've been alluding to and also some of the initiatives that Gary has been describing, which might be a benefit. So if you ask me from where we sit here, I am leaning to next year and what we need to do is make a final determination and then send you a calendar notice. So I promise to do that, Patrick. Thanks.

Thank you. Our next question comes from Joseph Moore of Morgan Stanley. Your line is now open.

I have a question on the three-year outlook. We expect that the WFE number for FY’20 was $45 billion it’s not $50 billion. What’s the rationale for the change, what’s changed since you gave the $45 billion number? And then can you talk a little bit about you maintaining the gross margin guidance with some mix shift with display lower and services higher. What’s the impact of that mix shift? Thank you.

As we take a step back and just look at where we sit relative to what was communicated at the last Analyst Day just in terms of what the new normal is. 2017 was high 40s from a WFE standpoint. We talk about ’18 and ‘19 combined exceeding $100 billion. And so I think there is visibility on three nice proof points that get us to an industry that's larger than what was originally contemplated when we first went out with our long-term model. So we feel pretty good about $50 billion being the new norm in the industry going forward. And the second part of your question?

Just the gross margin impact of mix shift with the services, foundry and display…

So the gross margins of our business, while we don't disclose what they are, in order our semi business, our display business and our service business. And you rightfully point out as display is falling short of the target that was originally contemplated by 2020. That shortfall gets made up by our services business, creates a natural headwind in the business. And the management team is working hard on a number of fronts to drive gross margins in our execution to deliver on our shareholder commitments. And so it's just a lot of hard work that underpins the journey we've been on. And the Company has made great progress on this in the last four or five years where our gross margins are up 500 basis points. So we feel good about the journey ahead.

Thank you. Our next question comes from West Twigg of KeyBanc Capital Markets. Your line is now open.

I wanted to ask about cobalt adoption. You’ve detailed it a couple of months ago, just wondering if you could comment on the traction you’re seeing. And are customers successfully integrating it, or do you see any yield risk. And I think you said there was around $500 million opportunity of 7-nanometer. How far into that opportunity do you think you will get in 2019 based on the current customer activity?

So we see cobalt continuing to be adopted over the next three, four years. Just for reference, one layer of cobalt adds about $70 million incremental business. So from where we’re at right now, we continue to see adoption. It’s probably in $250 million $300 million range over the next few years in terms of incremental business.

Thanks Wes. Operator, I think we got time for one more question.

Thank you. Our next question comes from Edwin Mok of Needham & Company. Your line is now open.

On the prepared remarks, you guys talk about patterning, you guys have growing a patterning business and potentially adding $1 billion over the next five years. And you when we talk to investors, some of them are worried that you might actually reduce the patterning TAM. So is this possible, can you guys slide maybe some examples of why you think your patterning business didn’t grow? Is it driven by share gain, new process, new architecture, et cetera?

We have a number of strong products in the patterning market, the Sym3 and Selectra, the CMP business is also growing as more patterning steps are adopted. We have new deposition capabilities. So our overall market as you talked about grew a billion dollars over the last two years. We have a lot of confidence and line of sight to additional billion dollars over the next two years. So if you look at the market overall, about 50% is memory. Certainly, our share is growing a significant amount. You have trailing geometries about 25%. 25% is leading foundry and logic. And we see in the foundry logic significant traction. If we look at our share of patterning in 5-nanometer and our overall TAM 5 versus 7 goes up something like 25%, our positional share in 5 will also go up, especially in patterning. So as multi-patterning gets further adopted and EUV steps are adopted, all of that is incrementally positive for Applied. EUV steps are replacing positions that Applied really isn’t present today; so both of those areas, the growth in EUV, the growth in multi-patterning are positive for applied. And the other thing I would say relative to patterning. There are really to major areas of focus; one is shrinking features; but the other one is placing features in the right position. And if you look from an overall industry perspective, this pattern placement or alignment is a big challenge for customers. So we have a very good position as some of these new processes are adopted and certainly we have good line of sight to the future technology node. So for applied EUV is positive, our positions are positive and we have good line of sight to that additional growth.

Thanks Edwin for your question. And Dan, would you like to add anything in closing.

Thanks Mike. To me it comes down to three things. First, our markets and in particular company what we continue to see going forward, our business is going to be sustainably larger. It's more diverse, less volatile, less cyclical than it's been in the past. Couple of proof points we look at. In my intro talked about how we can now do the same level of earnings in a single quarter that we used to do in a full year a short while ago. Something else to think about; even with the adjustments and spend that our customers have made this year, the lowest quarter of EPS in 2018 will be higher than any quarter in 2017, which was an all-time record for the Company; second, 2019, we see continued strength. The more we talk to both customers and others in the tech ecosystem, the more we believe. We’re on the beginning of a powerful new wave. Applied Materials is on the critical path. Those trends depend on what Applied does best. Third, 2020 financial model, on track to exceed the targets we have out there. What it also says behind the scenes, we’re building a pipeline, strong pipeline of new products, new innovations, new opportunities that set us up extremely well in the years beyond. As Gary said, we’ve never been better positioned as a company than we are today. Lastly, Citigroup conference is coming up in a few weeks. Look forward to seeing many of you there. And just let us know if you have any questions. We want to be helpful we’re here to help, just let us know. With that, Mike, let's go ahead and close the call.

Okay, great. Thanks Dan. And we’d like to thank everybody for joining us. A replay of this call is going to be available on our Web site by 5 PM to Pacific Time today. And thank you for your continued interest in Applied Materials.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.