External Use

The Display Technology Revolution

Increasing Opportunities in an Innovative Industry

Tom Edman

Group VP, GM Display Business Group

External Use

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Safe Harbor Statement

These presentations contain forward-looking statements, including those regarding Applied’s performance,

market outlooks, strategic positions, capital allocation, integration of Varian, operating models, business

outlooks, products, and opportunities, and all other statements that are not historical facts. These

statements are subject to known and unknown risks and uncertainties that could cause actual results to

differ materially from those expressed or implied by such statements, including: the level of demand for

Applied products, which is subject to various factors such as uncertain global economic and industry

conditions, government renewable energy policies and incentives, end demand for electronic products and

semiconductors, and customers’ new technology and capacity requirements; the concentrated nature of our

customer base; our ability to (i) develop, deliver and support a broad range of products and expand our

markets, (ii) effectively integrate Varian and realize synergies, (iii) timely align cost structure with business

conditions, and (iv) attract, motivate and retain key employees; and other risks described in SEC filings.

All forward-looking statements are based on management’s estimates, projections and assumptions as of

March 28, 2012, and Applied undertakes no obligation to update any forward-looking statements.

This presentation also contains non-GAAP financial measures. Reconciliations to GAAP measures are

provided in the accompanying slides, available on the Investor Page at www.appliedmaterials.com.

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External Use

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Display FY 2011 Scorecard

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FY'10 FY'11

$0.9B

$0.7B REVENUE 30.5%

22.0% OPERATING

MARGIN*

Responded to unprecedented

technology & market shifts

Adapted portfolio to capture

new high growth segments

Further strengthened

China infrastructure

* Operating margins are non-GAAP – see reconciliations at the end of presentation

External Use

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4 4

2012 Display Focus

4

Build on Mobility

Leadership

Position for Next

TV Wave

Deliver Financial

Performance

External Use

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Display Equipment Recovery Expected in 2013-14

5

$B

* Mobile includes <Gen 7 display and touch equipment

0

5

10

15

CY09 CY10 CY11 CY12F CY13F-CY14FAverage

DISPLAY EQUIPMENT TOTAL MARKET SIZE (TAM)

MOBILE*

TV

CY13F-14F

AVERAGE

External Use

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0

500

1,000

FY09 FY10 FY11 FY12F FY13F-14FAverage

$M APPLIED MATERIALS DISPLAY REVENUE

New Applications Expanding Growth Opportunity

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* Market share includes all generations of segment

**Mobile includes <Gen 7 display and touch revenue

MOBILE**

TV

54%

64% MARKET

SHARE*

FY13F-14F

AVERAGE

External Use

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LTPS* 2X

Display Technology Overview

7

TV Large size

High-resolution

Vivid color

3D

Value

MOBILE High-resolution

Thin and light

Low power

Interactivity

TECHNOLOGY

SOLUTIONS

α-Si LCD

High-res LCD

OLED

BACKPLANE

SOLUTIONS

Metal Oxide 1.3X

OPPORTUNITY (vs. a-Si)

* Low Temperature Polysilicon

External Use

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NEW PRODUCTS

Product Portfolio: Leading Share in Core and New Markets

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CORE TFT-LCD PRODUCTS

+ Equipment

Applications

Products

TV Monitor & Notebook

CVD Array Array Test PVD Array PVD Color

Filter

OLED TV Tablet Smart Phone

+ Metal oxide + Touch +LTPS

External Use

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Emerging Markets Drive TV Growth

18% China/India

+ ROW

CAGR (’11-’15F)

4% Mature

Markets

(US, Japan,

W. Europe)

Source: DisplaySearch (2009-11), Advanced Data Research (2012-14), Applied Materials

TV DEMAND DRIVERS

Emerging markets

Replacement cycle

New Smart TV “ecosystem”

0

50

100

150

200

250

300

350

2009 2010 2011 2012F 2013F 2014F 2015F

LCD TV SETS

China/Asia

ROW

Mature Markets

Units

(M)

9

12% Worldwide

INVESTMENT REQUIRED

100M unit incr. demand 2012-15

~13 new Gen 8.5 fabs

~$850M annual SAM 2013-15

~100M

units

External Use

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0

5

10

15

20

25

2010 2012F 2015F

Are

a D

em

an

d (

M m

2)

SMARTPHONE, TABLET, AND TOUCH DEMAND

Touch Panel (including Notebook)

Smartphones/Tablets Expanding Our Display Market

10

Source: Advanced Data Research; Applied Materials

*SAM estimated on CY Shipment based timing

AVG. SAM* CY 2012-14

Tablet &

Smartphone $300M

Smart

Phone

Tablet

Touch

Panel

$200M

Note-

book &

other Mobile

Display

Tablet

Smart

Phone

External Use

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Display 2012 Key Actions

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OPERATING MODEL

Revenue $B

$0.7 $1.0

Operating Margin $B, Non-GAAP*

$0.2 $0.3

% Operating Margin Non-GAAP*

22-27% 28-32%

* Model non-GAAP operating measures exclude the impact of certain items that can vary from period to period.

Return of television investment

Position products for

mobility transition

Manage cost structure to maintain

profitability in FY’12

External Use

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12 12

2012 Focus: Positioning for the Future

12

Build on Mobility

Leadership

Position for Next

TV Wave

Deliver Financial

Performance

External Use

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RECONCILIATION OF GAAP TO NON-GAAP

DISPLAY OPERATING MARGIN

Fiscal 2010 Fiscal 2011

(in millions) (in millions)

Net sales (GAAP basis) $ 899 $ 699

Operating income (GAAP basis) $ 267 $ 147

Certain items associated with acquisitions $ 7 $ 7

Restructuring and asset impairments - -

Non-GAAP operating income $ 274 $ 154

Non-GAAP operating margin (% of net sales) 30.5% 22.0%

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