Applied Materials (AMAT) stock plunged 8.19% to $45.77 during Tuesday's intraday trading, a decline of $40.76 per share, even as demand for AI chips remains strong. The drop came after the semiconductor equipment maker presented ambitious growth targets running through 2030. Alongside the long-term outlook, the company detailed expansion plans that span advanced manufacturing capacity, research facilities, and semiconductor services.

The market reaction puts a spotlight on those targets because of where Applied Materials sits in the chip supply chain. The company ranks among the world's largest suppliers of wafer fabrication equipment — the machines chipmakers use to pattern, deposit, etch, and inspect silicon wafers — so its long-range outlook offers a window into how equipment vendors size the semiconductor industry's capital-spending cycle.

AI Chip Equipment at the Center of the 2030 Strategy

Applied Materials presented its long-term growth strategy during the 2026 SEMICON West Investor Breakfast on Tuesday. SEMICON West is a leading annual trade event for the global semiconductor industry, where the tools behind chip production take center stage. The company said it expects the expanding buildout of AI infrastructure to support sustained demand for wafer fabrication equipment. Its strategy focuses on three core areas: advanced chip production, memory technology, and semiconductor packaging. The presentation detailed how the company intends to capture a larger portion of equipment spending tied to AI infrastructure buildouts.

Chief Executive Officer Gary Dickerson identified AI infrastructure development as a major driver of future semiconductor equipment spending. He emphasized the company's leadership in technologies that improve computing performance, energy efficiency, and production costs. Applied Materials expects broader adoption of artificial intelligence to increase demand for advanced silicon manufacturing going forward.

The company projects that three semiconductor segments will generate approximately 75% of wafer fabrication equipment growth between 2025 and 2030. These segments are leading-edge foundry logic, DRAM memory, and advanced packaging technologies. The latter covers techniques for combining multiple chips into single, higher-performance assemblies, an approach that has become central to modern AI hardware. Applied Materials aims to increase its equipment market share by more than two percentage points during this period — a notable shift in a market supplied by a small group of major vendors.

eBeam Revenue Set to Reach $2 Billion as Services Expand

Applied Materials expects its electron-beam (eBeam) inspection equipment business to generate $2 billion in revenue during calendar 2026. The technology helps semiconductor manufacturers identify production defects and improve yields during advanced chip manufacturing. The company's imaging systems also support faster production processes and more efficient factory operations.

The company additionally expects its semiconductor services revenue to increase more than 20% during 2026. Management projects annual services revenue will exceed $12 billion by 2030, supported by a mid-teens compound growth rate. These services are designed to help semiconductor manufacturers improve equipment performance, factory productivity, and manufacturing efficiency. Because both the eBeam and services goals are framed around calendar 2026, they give the company's 2030 targets their nearest-term checkpoints.

Chief Financial Officer Brice Hill outlined plans to strengthen profitability while expanding research and development spending. According to Hill, previous technology investments have established the company's position across important semiconductor manufacturing processes. He said the company now plans to increase operating leverage as semiconductor equipment demand continues to expand.

Research and Production Capacity to More Than Double by 2030

Applied Materials plans to more than double its research laboratory and manufacturing capacity by 2030. The expansion supports expected growth in semiconductor production and demand for advanced manufacturing equipment. The company continues to invest in facilities that enable closer collaboration with semiconductor manufacturers on process development.

On Monday, Applied Materials unveiled its new Equipment and Process Innovation and Commercialization Center in Silicon Valley. The facility supports joint research into semiconductor process technology and equipment development. The company has already announced 15 partnerships involving chipmakers, technology companies, equipment manufacturers, and universities.

Applied Materials has also expanded its manufacturing infrastructure across several international locations, with operations in Austin, Texas; Singapore; and Treviso, Italy. The company said these investments underpin its long-term production strategy as semiconductor manufacturers expand capacity for increasingly complex computing applications.

This article first appeared on Blockonomi.