Michael Sullivan - Vice President-Investor Relations Gary E. Dickerson - President, Chief Executive Officer & Director Robert J. Halliday - Chief Financial Officer & Senior Vice President

James Vincent Covello - Goldman Sachs & Co. C.J. Muse - Evercore ISI Institutional Equities Timothy Arcuri - Cowen & Co. LLC Farhan Ahmad - Credit Suisse Securities (USA) LLC (Broker) Krish Sankar - Bank of America Merrill Lynch Atif Malik - Citigroup Global Markets, Inc. (Broker) Harlan L. Sur - JPMorgan Securities LLC Stephen Chin - UBS Securities LLC Romit J. Shah - Nomura Securities International, Inc. Patrick J. Ho - Stifel, Nicolaus & Co., Inc. Sidney Ho - Deutsche Bank Securities, Inc. Mark J. Heller - CLSA Americas LLC Mahesh Sanganeria - RBC Capital Markets LLC Thomas Diffely - D.A. Davidson & Co. Edwin Mok - Needham & Co. LLC

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. As a reminder, this conference is being recorded. I'd now like to turn the conference over to Michael Sullivan, Vice President of Investor Relations. Please go ahead, sir. Michael Sullivan - Vice President-Investor Relations: Thank you, Kyle. Today we'll discuss the results for our second quarter, which ended on April 26. Joining me are Gary Dickerson, our President and CEO, and Bob Halliday, 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, profitability, and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements 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 SEC. All forward-looking statements are based on management's estimates, projections, and assumptions as of May 14, 2015, and Applied assumes no obligation to update them. This webcast also includes non-GAAP adjusted financial measures. Reconciliations to GAAP measures are contained in today's earnings press release and in our reconciliation slides, which are available on the Investors page of our website at appliedmaterials.com. Also, as a reminder, Applied will hold its next analyst meeting in San Francisco on Monday afternoon, July 13, preceding the SEMICON West trade show. We hope to see many of you there. And now I'd like to turn the call over to Gary Dickerson. Gary E. Dickerson - President, Chief Executive Officer & Director: Thanks, Mike, and good afternoon. In our second quarter of fiscal 2015, Applied delivered our highest quarterly revenue in the past three years and earnings near the top of our guidance range. These results reflect robust customer investment in both semiconductor and display, and most significantly that Applied is delivering the enabling products and services our customers need as they transition complex new devices into volume production. The magnitude of the technology change facing our customers is unprecedented, and this creates incredible opportunities for Applied Materials now and in the future. Our core competencies and unmatched talent in materials engineering provide a great platform for profitable growth. Applied has a compelling strategy. We are investing in that strategy and making meaningful progress towards our goals. The traction we are demonstrating is made possible by our employees' relentless focus on moving the company forward and their tremendous passion to create value for customers and investors. Over the past few years, we have been driving significant changes across the company, strengthening our capabilities and processes while aligning the organization to take advantage of our vast opportunities. We have aggressively shifted spending within the company to better support our customers, provide additional fuel for product development, and improve our financial performance. By increasing investment in key areas, we have created a pipeline of differentiated products that will accelerate Applied's growth, and we are already seeing a positive impact. Starting with semiconductor equipment business, the trend is clear. We are winning market share. Over the past two years, we have increased our overall share in wafer fab equipment around 1.5 points. And, based on our current view of customer spending, we expect to build on those gains this year. Our traditional leadership businesses, where we have high share, remain strong. And in 2014 we added around three points of share in both PVD and epi. We have our strongest momentum in areas of the market that represent large growth opportunities for us. Our combined revenues in CVD and etch were up over 50% year over year, significantly outgrowing the market. This past year we gained two points of share in CVD, and we have highly differentiated products in our pipeline that will expand our addressable market. We are very excited about how our new products are positioned, and we'll provide more details about our progress at our analyst meeting in July. Since 2012, we gained seven points of market share in etch, including 12 points in conductor etch. In the past two quarters, the installed base for our latest generation etch system has grown from 10 chambers to more than 160. This is one of the fastest adoption rates for any new Applied product, and customers are telling us they see technical advantages in uniformity and defect performance. We believe our technical position is getting stronger, and this provides a foundation for future share gains. We are also driving growth in our service business, where we delivered our highest ever quarterly revenue, and we're on track for a record year. At both the leading and trailing edge, our customers face incredible challenges as they strive to bring new innovations to market faster and more efficiently. By helping our customers solve their device performance, yield, and cost challenges, we believe that service can be a meaningful component of our long-term growth. We have adapted our strategy, strengthened our team, and are bringing together capabilities from across the company to deliver expanded service offerings that provide more value for our customers. Service and spare parts revenues have grown more than 17% from this time last year. During this period, we have significantly increased the number of tools under service contract, which we believe is one indicator of our growth potential. Turning to display, we expect 2015 to be a third consecutive year of double-digit revenue growth, and to increase our overall share by about two points. As we've highlighted before, our revenue and margin profiles in this business can be uneven. While we see some margin headwinds in 2016 due to customer mix and a weak yen, overall market trends remain positive. As the display industry introduces new technologies, customers' manufacturing processes are becoming more complex and capital intensive. We have invested in a strong portfolio of products aimed at enabling next-generation TVs and mobile displays. One example of this is organic LED, which expands our served available market. We recently received a large order for our OLED encapsulation tool, and in 2015 we expect to book about $200 million in this new application. Overall, our growth trajectory in semi and display is supported by a sustained period of industry investments in both capacity and technology. Even after recent customer announcements have been taken into account, we still believe 2015 wafer fab equipment investment will be up slightly over 2014, driven by increased memory spending. Sustained NAND bit growth in the 35% to 40% range, similar to 2014, enables these customers to maintain their investment levels. We expect 3D NAND to represent more than 40% of NAND investment in calendar 2015, and installed capacity should exceed 120,000 wafer starts per month by year end, which is only around 10% of total NAND capacity. This inflection not only increases our available market, but is also enabling us to gain share. Based on the positions we have won, we believe that in the transition from planar to 3D NAND, we will increase our served market share by at least five points at these customers. In DRAM, supply and demand remain well balanced, and we anticipate bit growth of 25% to 30%. We are expecting this to translate to an increase in customer spending of 15% to 25% relative to 2014. These investments are primarily focused on 20-nanometer upgrades for mobile DRAM with some capacity additions. In foundry, the leaders are engaged in a fierce battle to ramp FinFET technology at the right yield and cost. The intense pressure for our customers to accelerate volume production of their FinFET devices is a major area of focus for Applied and creates a great growth opportunity over the next few years. In summary, our customers are making incredible advances in technology, enabled by materials innovation, and this plays directly to Applied's strengths. Across the company, we are making meaningful progress towards our growth goals and driving opportunities to accelerate our strategy. Going forward, we are prioritizing three areas to further improve execution. First, we feel very positive about our new product pipeline and our ability to drive growth at Applied. In the near term, as we ramp these new products, we see some effects on our margins, particularly in cases where rapid adoption has exceeded our expectations. Bringing margin performance back in line with our financial model is a major companywide focus. Second, we will continue to actively manage our product portfolio to ensure we are deploying our investments and resources towards our most promising growth opportunities. In the past two weeks, based on our view of future market potential, we have taken actions to further lower the breakeven level of our solar business. And third, we are taking additional steps to optimize our structure, making sure that the organization is aligned to major areas of value creation for our customers and that we have the right talent in the right areas. Now let me hand the call over to Bob, who will provide additional detail about these priority areas and our financial performance. Robert J. Halliday - Chief Financial Officer & Senior Vice President: Thanks, Gary. I'll add my comments about how we're doing in the transition underway at Applied Materials. Gary talked about how we've moved money from headquarter functions and underperforming businesses to higher-growth opportunities, notably in etch, CVD, display, and AGS. We've also strengthened the linkages between SSG and AGS for growth. SSG plus AGS revenue grew 20% in FY 2014, and we expect both businesses to outpace WFE in 2015. Focusing on the total life cycle of our products will increase both our revenue and profit growth. When excluding EES, Applied's trailing four-quarter revenue was the highest in seven years. Now let's look at profitability. You'll recall that our non-GAAP gross margin was 40.9% in 2012, grew to 42.1% in 2013, and reached 44.1% in 2014, or 43.6% when excluding non-run rate items. Our progress is trending ahead of plan. This year, we've faced some headwinds due to mix and the higher initial cost of fast ramping new products. In Q1, our non-GAAP gross margin was 42.3%. And in Q2, it increased to 43.2%, which was nearly a point better than our forecast. We expect gross margin to be flat to up a little in Q3. Looking ahead to FY 2016, gross margin remains a key challenge to financial model performance. Within SSG, if we have similar demand in new product ramp patterns, we could experience gross margin headwinds in the first half. In display, Gary mentioned some of the margin challenges associated with the strong mobile ramp along with yen-based competition. However, leaders throughout the company are intensely focused on gross margin improvement. Based on our gross margin initiatives, we believe we can achieve year-over-year improvement in fiscal year 2016, but we expect it to be below model performance for the year. We are equally focused on managing our operating expenses. Quarterly non-GAAP OpEx should be around $575 million through the end of this year. We have a number of new products to launch which require additional support, but we will stay focused on our cost structures and continue to optimize our portfolio investments. Last week, we further reduced our solar spending and we will continue to monitor the market closely. Looking to our overall model, we continue to believe that non-GAAP EPS of $1.70 is the right level of profitability for the company when WFE spending is at $33.5 billion. With the merger pending, we were unable to take certain actions, including share repurchases. Next week, we'll begin to buy back stock under our three-year, $3 billion repurchase authorization. We plan to be opportunistic, and we could execute the program in under two years. As the buyback and other initiatives take hold, we believe that we are on a path to $1.70 in 2017, assuming WFE demand of $33.5 billion. We'll share our detailed model with you at the analyst meeting in July. Now I'll summarize our second-quarter results as compared to the prior quarter. Orders of $2.5 billion were up 11%, led by SSG. Net sales of $2.4 billion were up 4%, which was above our expectations. Non-GAAP gross margin was 43.2%, which was better than expected due to a favorable customer mix. Non-GAAP operating expenses were $579 million, in line with guidance. Non-GAAP EPS at $0.29 was $0.01 above the midpoint of our guidance. We ended the quarter with approximately $4.2 billion of cash and investments, and about $2.8 billion of this was offshore. In SSG, orders of $1.7 billion were at a three-year high and were up 19% on increases in foundry and NAND. SSG net sales of $1.6 billion were up 8%, at the high end of our expectations. SSG's non-GAAP operating margin grew by almost three points to 26.8%, driven by higher volume and a favorable product mix. AGS orders of $641 million were down 7% sequentially due to a seasonal decline in service contract renewals. AGS orders were up 19% from the second quarter of 2014. AGS achieved record net sales of $646 million. The 11% increase was driven by growth in spares and services along with 200-millimeter equipment. AGS non-GAAP operating margin was 26.3%. Display orders increased slightly to $120 million and net sales declined to $163 million, as expected. Display non-GAAP operating margin decreased to 24.5% on lower volume. EES orders were $50 million and net sales grew to $73 million, as expected. EES posted a non-GAAP operating loss of $4 million. Now I will provide our third quarter business outlook. We expect our overall net sales to be up 2% to 6% sequentially. Within this outlook, we expect SSG net sales to be up 3% to 8% sequentially. AGS net sales should be up 2% to 7%. We expect display net sales to be approximately flat, and EES net sales should be approximately $50 million. We expect non-GAAP earnings per share to be in the range of $0.31 to $0.35, which would be up 18% year over year at the midpoint. Now let me turn the call back over to Mike for questions. Michael Sullivan - Vice President-Investor Relations: Thanks, Bob. To help us reach as many of you as we can, please ask just one question and no more than one brief follow-up. Kyle, let's please begin.

Your first question comes from the line of Jim Covello from Goldman Sachs. Your line is open. James Vincent Covello - Goldman Sachs & Co.: Hi, guys, good afternoon. Thanks so much for taking the question. I guess, Bob, first question is on the margins. If I think about what's going to be necessary to get you back in line with the target model, of the three, mix, scale, or lower component costs, how would you rank order those drivers in terms of the importance of getting your margin model back to where you want it to be? Robert J. Halliday - Chief Financial Officer & Senior Vice President: I'd say in the short to intermediate term, which is the next year and a half maybe, mix hurts us the most quarter to quarter. In terms of the second one, probably margin cost because most of our component costs, most of our product costs is materials. And then the third one is the scale issue, which is overhead absorption. Now longer term, if you can make progress on that. Those are time sequenced also. James Vincent Covello - Goldman Sachs & Co.: Okay, that's helpful. And then if I could follow up, Gary, on the 3D NAND ramp, it really seems like that's gaining some incremental traction in the back half of this year. What is it that's finally making customers feel more comfortable to ramp to 3D NAND? Is it that yields are where they need to be? Is it that the opportunity in enterprise solid-state drives is bigger? Is it just the customers trying to make sure one doesn't get too far ahead of the other? What's really – why are we starting to see this inflection because it's been a while in the making? Thank you. Gary E. Dickerson - President, Chief Executive Officer & Director: Good question, Jim. The yield was certainly a big challenge. This is the biggest change in memory technology in decades, going from planar scaling to 3D. So that was a big, big challenge. All of the customers were focused on making the transition, as we had discussed before, but the yield is getting to the point where more volume is going towards 3D NAND. All the customers have been focused with heavy technology investments in that area, but more customers now are moving to that technology and to manufacturing, so that certainly is a big transition. And what we said for Applied Materials is that the transition from planar to 3D NAND is really good for our business because planar is more litho-intensive and 3D NAND is more in the sweet spot of materials engineering types of technologies, etch, deposition. We have additional epi steps there. So we talked about the opportunity for us on an equivalent wafer start basis going up 35% to 50%. And what we're seeing, we are very optimistic more towards the top end of that range relative to the opportunity for us in growth. And the other aspect is not only is the TAM increasing, but we believe that we will increase, as I talked about in the script, our share of that TAM. So that's another incremental growth driver for us within Applied. So we see the 3D NAND ramping certainly in 2015, and then really the majority of spending in NAND beyond 2015 is really towards 3D NAND. We also said that the capacity for 3D NAND is really 10% of total NAND capacity by the end of this year. So there's still opportunity as customers make that transition and really good tailwinds for us in terms of TAM and market share. James Vincent Covello - Goldman Sachs & Co.: That's really helpful. Thank you so much, good luck.

Your next question comes from the line of C.J. Muse from Evercore ISI. Your line is open. C.J. Muse - Evercore ISI Institutional Equities: Good afternoon. Thank you for taking my question. I guess first question, can you walk through your latest thoughts on linearity first half/second half in terms of you and industry shipments? Robert J. Halliday - Chief Financial Officer & Senior Vice President: Sure. We think the second half is a little stronger than the first half. And we think particularly, we think foundry is up second half versus first half. I'm doing revenues. DRAM is a little softer. NAND is stronger, and logic is about neutral. C.J. Muse - Evercore ISI Institutional Equities: That's very helpful. And I guess as a follow-up, as you look at the handoff from DRAM to NAND going first half to second half, can you walk through what your intensity looks like in one sector versus the other, and also how we should think about the implications to gross margins? Thank you. Robert J. Halliday - Chief Financial Officer & Senior Vice President: If you look at it historically, in the last year or so our share in DRAM versus NAND overall is comparable. If you go look at the transition though at NAND, as Gary said earlier, growth in 3D for a company like Applied, we said 35% to 50% increase in the greenfield; it's probably a little more even. And if you look at our share gains, they're about five points in that transition, so we gained five points of that TAM. So the transition from DRAM to NAND – 2D NAND is somewhat better for us. The transition to 3D is substantively better for us. Gary E. Dickerson - President, Chief Executive Officer & Director: So the other thing I would say is that we're gaining share in memory in both NAND and DRAM. Last quarter, what we had discussed was we had our highest DRAM orders since 2010. We actually exceeded that this quarter. So for the last two quarters, the DRAM business for us is up significantly, and we are gaining share in both of those different areas.

Your next question comes from the line of Timothy Arcuri from Cowen & Company. Your line is open. Timothy Arcuri - Cowen & Co. LLC: Thank you, a couple things. I guess, Bob, first a question on OpEx. Did I hear you say that OpEx will be down $35 million quarter on quarter between April to July? Robert J. Halliday - Chief Financial Officer & Senior Vice President: No, I said it would be about $575 million. Timothy Arcuri - Cowen & Co. LLC: $575 million, okay, all right. Then I guess to follow on to that, if you look at that element relative to your financial model, that seems to be the area where, given where your revenue is, that's the line item that is the most out of whack. So either you have to grow revenue without growing OpEx or you have to cut OpEx to bring that in line to where revenue is. So can you just talk about that? Can you talk about which of those two you think is more likely? Thanks. Robert J. Halliday - Chief Financial Officer & Senior Vice President: Sure, the model was a 2016 model, so we actually see revenues growing next year. We think this year is probably a little under a $33 billion year for WFE. Next year the model is at $33.5 billion, so WFE is a little better in that model. Second, we think our share will be up in WFE this year and next somewhat. And then we think AGS is showing good growth momentum. And display should be pretty good in revenues next year. So we think the revenues could be an uptick and approach the model next year. In terms of the biggest discrepancy, in my opinion, frankly, is a little bit of gross margins. 44.5% was the model. If you look at the document, it said 45%, but the math is 44.5%. We're up to 44.1% in fiscal 2014. The quarter just ended, we were at 43.2%. We go up a little bit maybe the second half, but in the first half if etch is heavy and there are a little bit of display mix problems, we're not up. So I'd say the biggest delta is probably the gross margin line. If you look at expenses, we're at $575 million. If we hold at that line, which is what we're saying, then we'll be at $2.3 billion. The model is $2.2 billion to $2.8 billion, so we're $72 million over. But a lot of that's related to all the new products coming out. I think the biggest discrepancy is probably the gross margin line, personally. Michael Sullivan - Vice President-Investor Relations: Thanks, Tim. Timothy Arcuri - Cowen & Co. LLC: Okay, Bob. Thanks much. Thanks.

Your next question comes from the line of Farhan Ahmad from Credit Suisse. Your line is open. Farhan Ahmad - Credit Suisse Securities (USA) LLC (Broker): Thanks for taking my question. My first question is regarding the backlog. I saw that there were some debookings in the quarter. Can you talk about what those were? And was some of the impact from the recent cuts that we have seen from TSMC and Intel? Robert J. Halliday - Chief Financial Officer & Senior Vice President: Sure. The backlog, there were some debookings of stuff that either slipped out of the quarter or turned around. There was cats and dogs in there too, frankly. There was a little bit of foundry, some of the miscellaneous. Foreign exchange was $10 million of that, so that was just FX. So I wouldn't draw too many conclusions on it. Farhan Ahmad - Credit Suisse Securities (USA) LLC (Broker): Got it, and then another long-term question, just talking about the balance sheet structure. Have you given any thought to what level of debt you need or you can support on the balance sheet and try to recapitalize your balance sheet and return some cash to shareholders? Robert J. Halliday - Chief Financial Officer & Senior Vice President: We've given a lot of thought to everything, especially the last few weeks, in looking at the $3 billion. We think – I'm actually pretty optimistic we can get the $3 billion done in less than two years. I'm actually reasonably optimistic that we can continue a significant buyback for a number of years without going into heavy debt. I think we'll go into moderate debt, but I'm actually getting optimistic on the tax and the cash flow. And then if we need to take on some debt to continue significant share returns to investors, we're willing to look at that too, and we plan to do some of that too. But I'm actually getting more optimistic on the foreign cash lately. Farhan Ahmad - Credit Suisse Securities (USA) LLC (Broker): Thank you, that's all I have.

Your next questions comes from the line of Krish Sankar from Bank of America Merrill Lynch. Your line is open. Krish Sankar - Bank of America Merrill Lynch: Yes, hi. Thanks for taking my question, two of them, first one for either Bob or Gary. As you look ahead and focus on both trying to gain share and renewed focus on gross margin, I'm curious. Is there going to be a difference in the pricing philosophy for the company? Are you going to look at pricing differently, be more rational, or is it going to be status quo? I'm just curious on that, and I also had a follow-up after that. Gary E. Dickerson - President, Chief Executive Officer & Director: So let me talk a little bit about the model. Tim had asked this question earlier. In semi, we're very optimistic. We talked about the growth in our business as these new memory technologies are ramping into production. And certainly in FinFET first generation, 10-nanometer, that's a great opportunity for us with the products we have enabling those transitions. We gained 1.5 points over the last two years. We indicated we believe we'll gain share again this year. And as these transitions ramp, we're still in the early innings in terms of some of these transitions in the semiconductor area. So we're optimistic in that area. Display, I talked earlier today about three years of double-digit gains in revenue in the display market. Again, there are major technology transitions there. We talked about a new area where that generated $200 million in revenue – will generate $200 million in revenue this year. So again, we have some good growth opportunities in display. And service, our service and spares was up 17% in our service and spares from last year, record revenue. So we have really good growth opportunities. So when you look at the model, the top line revenue growth, if you look at where we were when we published that model to where we think we'll be, we're going to be in the range of that number for top line revenue growth, which was an incredible accomplishment versus what we said we would do. We still believe these opportunities are great opportunities for us. One of the things I also talked about was in etch, we went with a – we're introducing a new chamber that customers are telling us technically has advantages in uniformity and defect performance. But as you're ramping these many new areas simultaneously, we have great, great new products that are targeted at these inflections. There's going to be some margin pressure with startup in some of these areas, and frankly they're going even faster than we had expected due to the pull from the customers. The key thing in any business is to have value, technical value, and differentiation you're delivering to our customers. So our focus is to enable these inflections for our customers in semiconductor and display. And in that process, we will drive market share higher, and hopefully the value for the customer with these differentiated products will also go up over time. As Bob had said earlier, in 2016, due to mix, we believe that the margins are going to be behind. But we are still driving to achieve those margin goals. The timing may be a little bit later than what we had talked about, but the momentum for the company relative to revenue growth is in the range of what we discussed when we published the model. And again, the margins are going to be off, as Bob talked about. But we are driving. There are a number of opportunities for us to drive, to close and exceed that gap from a gross margin standpoint. Krish Sankar - Bank of America Merrill Lynch: Got it, guys. And then just as a follow-up along the same path, if I look at SSG products, the one that has the biggest potential for share gain is conductor etch, but that also looks like it has probably one of the lower gross margins. Will the conductor etch product, do you think, get to the same level as some of your other dominant products like PVD, or do you think that it's going to be structurally a lower gross margin product division? Gary E. Dickerson - President, Chief Executive Officer & Director: Over time, we see a lot of opportunity for us to drive higher margins in that business. Certainly, the share gains over the last couple years have been pretty significant. Our business went from I think 2012, from $350 million to about $1 billion last year, so just dramatic gains in the etch business. We think over time there's still a lot of upside potential. And it really, as I said, comes back to how are you technically positioned in the markets. And there are some significant advantages that customers are seeing. It's in the early innings of that being validated with customers. But you really look for architectural advantages in your products where you can solve high-value problems for customers in these inflections. We believe there are those areas that we can drive over time, and certainly a lot of opportunity for us to improve our margins in that area. Krish Sankar - Bank of America Merrill Lynch: Got it. Thanks, Gary. Michael Sullivan - Vice President-Investor Relations: Thanks, Krish.

Your next question comes from the line of Atif Malik from Citigroup. Your line is open. Atif Malik - Citigroup Global Markets, Inc. (Broker): Hi, thanks for taking my question and good job on the results. Gary, if I look at the foundry spending at one of your customers that cut their CapEx, if I look at the CapEx and divide it by the capacity, the CapEx per year at capacity is flat over last year, and that's partly because the 20-nanometer demand wasn't strong and they were re-using more equipment. So my question is it if I look at 10-nanometer, how should we think about that ratio of CapEx to capacity as you move to 10-nanometer for the equipment makers? Gary E. Dickerson - President, Chief Executive Officer & Director: So 10-nanometer is – we'll talk more about this at SEMICON. I've heard some customers say that this is the most important node in the history of their company. So you look really at where the pull is from an end user perspective in terms of mobile devices. Certainly there is a lot of value. People are trying to pack more performance, more features, and drive lower power for those devices. So 10-nanometer is a big battle for all of the different companies, and there is tremendous focus there, and the engagement with the customers are very deep and very broad. When we look at the opportunity for the CapEx, if you take equivalent number of wafer starts, it goes up a significant amount versus what we're looking at for the 16-nanometer and 14-nanometer node. We'll talk more about this at SEMICON. But it is a great opportunity, and there is a significant change in that device as the customers are ramping 10-nanometer, and we look at that being a great opportunity for us. In the transistor area, we have more epi steps, real strength in PVD, implant, a number of different areas, and then also the interconnect structures there will also change. So this, as we've said many times, is the sweet spot relative to materials engineering. And we look at 10-nanometer being a really, really great opportunity to drive our business over the next few years. I don't know, Bob, if you want to add anything else on that one. Robert J. Halliday - Chief Financial Officer & Senior Vice President: Maybe I could, if you don't mind. If you want to look at some of this capital intensity and reuse and nodal transitions, you have to look at three things really. One is, what's the relative capital intensity of the node? Two, where are they in the transition to a node? And three, how big is the node? So what is worrisome to some people right now is gee, they're getting a lot of reuse, and is that not as good for you on capital intensity? I'm not actually too worried. If you look at the data, we think this year is probably a $33 billion year. And if you adjust for foreign exchange with the weaker yen and weaker euro, it's probably north of $33.5 billion. So the year is pretty good. Now look at what they're spending on. For three years in a row, 2012 to 2013, 2013 to 2014, and 2014 to 2015, the percentage of the spending that is going to companies like Applied, actually Applied, has gone up as a percentage of 100%. So this PME thing is really taking traction. Third, if you look at where they are in the nodal transition, 16-nanometer to 14-nanometer they're pretty early. 20-nanometer wasn't a big node and they're doing some reuse. But if you look at it as they get later into the node, the percent of reuse probably goes down somewhat. And two, as Gary said, 10-nanometer is a big node. And if you look at the capital intensity, which we'll talk to you more about at Analyst Day, it looks like 10-nanometer mix again plays for companies like us. So I'm actually not too upset about the nodal transition or the mix for us. Atif Malik - Citigroup Global Markets, Inc. (Broker): Thanks, that's very helpful. And as a follow-up, Bob or Gary, your services growth is outstanding if I compare it to the wafer start growth, which is about 3% to 4% year over year. Can you provide us a percentage of your install base that's currently under contract so we can see how much headroom you have? Gary E. Dickerson - President, Chief Executive Officer & Director: What I would say on the service contracts is that we are making really significant progress relative to service contracts. And all of those tools under contract really provide a great forward momentum for us in the service business. We've made a lot of changes relative to our strategy, our structure, bringing new talent into the organization, and also the connection between the service business and the semiconductor business units. We've relocated people. It's really stronger than ever in terms of those value roadmaps for customers. So that's translating into significant growth in our service and spares business, which I talked about earlier was 17% growth in service and spares year over year. And we believe there is a huge opportunity. If you look at the share, it's still very, very, very low. We have a lot of momentum there, and we think the growth opportunity there for us is significant. Robert J. Halliday - Chief Financial Officer & Senior Vice President: Let me add something, connect the dots with a question that was asked earlier. The point question that was asked earlier is, can etch gross margins get to be where some of your higher product gross margins are? I think the answer is they can certainly improve from where they are. But even if you look at other etch companies in our industry, the overall etch gross margin is not as high as some of our other high gross margin business, higher-share businesses. But what is very attractive about etch is a few things. One, if you look at our growth in operating profits since 2012 in etch, it's outstanding in terms of what's dropped through to the bottom line. It's very good. Second thing is, if you look at etch in the aftermarket, and we're focused more and more at the total product lifecycle profitability of a business, etch is probably the biggest opportunity because these tools, as Gary said, many times eat themselves. So in terms of driving long term profitability and predictable profitability, etch is a very attractive business. Gary E. Dickerson - President, Chief Executive Officer & Director: Thanks.

Your next question comes from the line of Harlan Sur from JPMorgan. Your line is open. Harlan L. Sur - JPMorgan Securities LLC: Good afternoon and nice job on the quarterly execution, guys. As a follow-up to the previous question on 10-nanometer, it sounds like another solid move up in intensity for the Applied team. We've heard pilot production later this year to first half of next year. The question is, are you guys seeing the 10-nanometer spending in your order pipeline for this quarter, the July quarter, or is it more targeted to come into your order pipeline more in the second half of this year? Gary E. Dickerson - President, Chief Executive Officer & Director: It's really not amounting to a large number right now. And certainly the engagements that we have with the customers is really better than ever across all of our different products, certainly in the transistor area with epi, PVD, more epi steps. That's a great opportunity for us. And in the patterning space, one of the things that we did in the organization is pull all of the patterning groups together. So we have etch, the selected material removals, CVD, ALD. And the synergies there for us as we are delivering these new materials, our ability to deliver those materials and etch them and remove them, that's a great synergy that we're driving as part of the organization change that we made. So the opportunity for us there, the engagements we have are great leading indicators of where we're going to be when that ramps, and they're broader and deeper than we've ever had. But from a revenue standpoint right now, it's not a significant number for us. It's a very small number for us. Harlan L. Sur - JPMorgan Securities LLC: Got it, okay. I was talking more about orders there. But I understand where you're going with that. And then on the NAND segment, obviously very strong orders, up I think 40% sequentially. How much of this order mix in the April quarter was 3D, or is it still being focused on planar? And I'm assuming that the 3D spending mix is moving higher here in the July quarter. Are you seeing this order trajectory spread across multiple customers? Robert J. Halliday - Chief Financial Officer & Senior Vice President: On NAND in total, we had a good bookings quarter, as you said, and we think it's pretty strong for the rest of the year, as we told you earlier. The second thing we told you earlier was by the end of the year we see 120,000 wafer starts installed, which is about 10% of overall capacity, up from about 60,000 last year at the end of last year. So we see a heavier weighting of the 3D in the second half spending. Harlan L. Sur - JPMorgan Securities LLC: Great. Thanks, guys. Michael Sullivan - Vice President-Investor Relations: Thanks, Harlan.

Your next question comes from the line of Stephen Chin from UBS. Your line is open. Stephen Chin - UBS Securities LLC: Thanks. Hi, Gary and Bob, just a follow-up question on the gross margin next year. So is the gross margin issue mostly because of the display margin headwinds and less from these new etchers? And what is the display margin issue? Is it mostly from this new OLED display win that you're just ramping for the first time? Robert J. Halliday - Chief Financial Officer & Senior Vice President: If you go look at it – I'm looking at the data actually so I can be more accurate. So if you look at it, we're a little more where we want to be. We'll be up next year, we believe, in SSG in absolute gross margin percentages, but not as far up as we want. Now the reason we're not getting as far as we want is mostly mix. The reason we're improving in absolute dollars is within each product we're doing better. But the mix is still a little bit off, particularly in the first half. Within display, again, it's a mix thing that next year, our business predominantly for many years has been driven by TV equipment. So we sell equipment to make TV panels or TV screens. Next year is a disproportionate number of sales of very high, I think the highest ever, and probably the highest we will have for the foreseeable future sales of smaller screen sizes, which is a somewhat different mix of tools, somewhat different mix of customers. So that's just for cell phones mostly. And so that's the mix that's hurting us in display next year, and it's unprecedented in the volume. Stephen Chin - UBS Securities LLC: Okay, thanks for sharing that. And my follow-up question is just a general question on multiple patterning. There seems to be a perception that once EUV tools are put into production, there will be a big decline in some of these etching deposition sales for multiple patterning. I was just hoping you could share your thoughts on this given the big EUV order that we saw recently. Thanks. Gary E. Dickerson - President, Chief Executive Officer & Director: Thanks, Stephen. I think our position on EUV is consistent with what we've said in the past. We think it's post-10-nanometer when you would start seeing any real volume on EUV. And so as we said, over the next few years, the real big driver for us will be the 10-nanometer node and maybe the second generation of the 10-nanometer node. That we anticipate to be a big node, a real important competitive battle for our customers. And we'll talk more about this at SEMICON, but really a great driver for us from a TAM standpoint. EUV is out beyond that timeframe, so it's out beyond the next few years. And then the other aspect is when EUV comes in, we believe that we'll also come in potentially with multiple patternings. So the timeframe for EUV to the really have any impact on our business is out there several years, so we don't see anything really near term. And certainly again the big, big, big driver for us over the next, I would say, two to three years is going to be the 10-nanometer node and maybe the shrink of that node. Gary E. Dickerson - President, Chief Executive Officer & Director: Okay. Thanks, Gary.

Your next question comes from the line of Romit Shah from Nomura. Your line is open. Romit J. Shah - Nomura Securities International, Inc.: Thank you. Gary, you've mentioned that revenue growth in this industry is hard to come by. And given that and the developments over the last couple of weeks, why can't you guys do better than the OpEx run rate of $2.3 billion? Gary E. Dickerson - President, Chief Executive Officer & Director: I'm not sure I completely understand the question. The revenue growth, as I talked about earlier, we have a lot of momentum around these inflections in semiconductor and display. And in semi, we gained 1.5 points over the last couple of years. We expect that we will gain share again this year. And as these new technologies ramp, we're still in the early innings in terms of the change in memory technology and the whole FinFET battle that is happening with our customers. So we're very optimistic based on the investments we've made and our teams that we will continue our momentum in growing our share of WFE in the semiconductor business through those transitions. As I said earlier, in display, three years of double-digit revenue gains in the display business, so we have very good opportunities there. And also in display, that market is undergoing significant changes from a technology standpoint, including this new area in OLED that we're ramping. So again, we have a lot of confidence in the growth longer term in our display business, a great team. They're gaining share, and also we're expanding our TAM with these new applications. So that part we're very, very, very happy with the progress that we're making in all of the major parts of our business. The OpEx question relative to the $575 million number where we're at right now, our number one focus is that we want to capture these inflections with our products, in semiconductor and display, and continue to grow the service business. And as I said earlier, we're pretty much on track for significant top line growth. If you looked at where we were at when we talked about the model versus the momentum that we have, we're in the range of what we talked about earlier for top line revenue growth. So as you said, it's really hard, but I am very proud of this team that we have at Applied and what we've been able to accomplish and the momentum that we have in these different businesses. We will continue to look for opportunities to optimize the business. We moved hundreds of millions of dollars over the last couple of years into areas that will drive longer-term shareholder value. Bob talked about the action that we are taking in the solar business right now. There are probably more opportunities for us to continue to optimize the portfolio. And longer term, we will continue to look at structural changes that will lower our overall spending in the company and improve productivity. But in the next year, we are very, very focused on top line revenue growth. And as you said, that's very, very difficult to come by. Romit J. Shah - Nomura Securities International, Inc.: Thank you for that. And one of the things you highlighted in your monologue was just the strength of the services business. And if I look at that as a percentage of SSG, it's around 41% attach rate. Is that the right way to think about it, services as a percentage of SSG? And is that 41% a number that you think you can improve on? Gary E. Dickerson - President, Chief Executive Officer & Director: So again, the 17% growth in service and spares in the last year, so think about the service business around $2.5 billion. This year will be north of $2.5 billion. And I think in the model, we had something like $2.6 billion – $2.7 billion for... Robert J. Halliday - Chief Financial Officer & Senior Vice President: No, the original model was only $2.561 billion. Gary E. Dickerson - President, Chief Executive Officer & Director: $2.561 billion. So anyway... Robert J. Halliday - Chief Financial Officer & Senior Vice President: We beat it. Gary E. Dickerson - President, Chief Executive Officer & Director: So we'll beat that. But if you can achieve double-digit revenue growth in service, as we are this year, that's $250 million – $300 million. That's almost 1% of WFE. So through a lot of changes in our strategy, our structure, we are increasing our service and spares business. We're adding value to the products. So that can be a great revenue driver as we're adding more value for our customers. So certainly, that's an area that the whole company is focused on is really creating more value for customers and then driving growth in that area. Romit J. Shah - Nomura Securities International, Inc.: Thank you. Michael Sullivan - Vice President-Investor Relations: Thanks, Romit.

Your next question comes from the line of Patrick Ho from Stifel, Nicolaus. Your line is open. Patrick J. Ho - Stifel, Nicolaus & Co., Inc.: Thank you very much. Gary, first, in terms of the share gains you've garnered on the memory space, can you give a little more color on the gains that you've achieved on the foundry space, where you've traditionally have had strong exposure in many of your process segments? Can you give a little bit of color where you see some of the gains? Gary E. Dickerson - President, Chief Executive Officer & Director: Are you talking about in foundry, Patrick? Patrick J. Ho - Stifel, Nicolaus & Co., Inc.: Yes. Gary E. Dickerson - President, Chief Executive Officer & Director: In the last year, certainly PVD and epi, we talked about both of those areas being up 3%, and those are great growth drivers for us. All of the different areas around the transistor, if you look at our implant business, for instance, that business is very, very, very strong. The switching cost in the memory is much higher than in any other market. So that area, our high current share in foundry... Patrick J. Ho - Stifel, Nicolaus & Co., Inc.: In foundry? Gary E. Dickerson - President, Chief Executive Officer & Director: Our high current share in foundry is in the 90% range. So that area is extremely strong. Last quarter we said that our etch business had the highest revenue in foundry since 2007, so we are making some progress there. We are making more significant progress certainly in V-NAND and the memory space, but that's an area that we think longer term is a really, really great opportunity for us. So there are a number of areas. I don't know, Bob, if you want to add anything on this one. There are a number of different areas, and I think as you go to the future nodes in FinFET, our TAM opportunity will increase a significant amount around transistor, interconnect, and a number of different areas. Robert J. Halliday - Chief Financial Officer & Senior Vice President: I think the three things you look at here is how big is your product footprint in foundry and how strong is it? And two and three are you getting D2R wins? So if you go look at – our foundry footprint is very strong and they're highly differentiated products. That's why it stays strong. It's a share position. In terms of gaining share, because they run so many different devices and so many different customers and they're so complex, turning D2Rs into P2Rs takes a little longer, but we've got some pretty damn good D2R positions that we've worked on the last two years, which very well could turned into P2Rs later this year. Patrick J. Ho - Stifel, Nicolaus & Co., Inc.: Great. Gary E. Dickerson - President, Chief Executive Officer & Director: The other thing I would say, in our PDC area, we're stronger in foundry and logic, and this last quarter we had some good wins in a couple of major foundries. One of the things also, if you look at our 2015 business in PDC, it's about 60% E-Beam and 40% optical. And in E-Beam, we have very high share in the E-Beam review area with the SEMVision. And if you look at the different areas of the segments within E-Beam, CD SEM, E-Beam inspection, and defect review, those are all areas that are growing very fast. And our technology there, especially electron optics imaging capability, is really world class. So that's another area we look at as we go forward where we see a potential for growth. Patrick J. Ho - Stifel, Nicolaus & Co., Inc.: Great, that's helpful, and maybe, Bob, a specific question for you in terms of the margin impacts on some of these new product ramps. Obviously, you mentioned that the faster than expected traction has obviously put some pressure on the near term. When do you expect to see some of those supply chain efficiencies kick in, in terms of I guess supply agreements and volume buys that will help margins improve over time? Robert J. Halliday - Chief Financial Officer & Senior Vice President: What we're doing, Patrick, is what's driving us down is mix, where we're gaining some share a little faster than we probably expected and the new products are starting to track in. Now what we're doing to mitigate that is get the new products up the gross margin curve faster and also to get gross margins up everywhere else across the company, and that's through material cost absorption. So the cost reduction efforts across the whole company in terms of PPV are picking up reasonably, not heroically yet. We're getting better. In terms of the new products, it's picking up faster. So my guess is you'll start to see – you're seeing progress now. It will pick up more next year. What's killing us in the first half of next year is mix again. Patrick J. Ho - Stifel, Nicolaus & Co., Inc.: Great, thank you.

Your next question comes from the line of Sidney Ho from Deutsche Bank. Your line is open. Sidney Ho - Deutsche Bank Securities, Inc.: Thanks for taking my question, first a clarification. Did I hear correctly that earlier, Bob, you said you expected 2016 WFE market to be $33.5 billion, or are you just referring to your operating models that you talked to in the past? Robert J. Halliday - Chief Financial Officer & Senior Vice President: We don't have an official forecast. That's our model. We don't have any detailed analysis of that. If you ask and take me out for a beer, it's a working model that's okay to work with, but we don't have a real number yet. Sidney Ho - Deutsche Bank Securities, Inc.: Okay. My first question then is, on the DRAM side, obviously very strong bookings in the first two quarters and record level last quarter. And you've talked about the second half DRAM revenue will be lower than the first half. I know you're not giving 2016 guidance yet, but are there any reasons why this strength will not continue in 2016 given the increased complexity and multiple patterning steps used in advanced nodes? Robert J. Halliday - Chief Financial Officer & Senior Vice President: In terms of DRAM, you said? Sidney Ho - Deutsche Bank Securities, Inc.: Correct. Robert J. Halliday - Chief Financial Officer & Senior Vice President: I'll tell you my guess. I don't know if you've got it here, but I'll tell you my guess. I think the V-NAND thing is going to pick up momentum because I think you're going to see more and more go to 3D. Patterning doesn't play there. So in fact, if you look at the mix of etch and deposition, it plays particularly well for us. If you go to DRAM, patterning does play an increasing role there. I agree with that. Now if you look at DRAM, prices are down a little bit, so they're very driven by economics in that business. So the cost is getting a little higher to make those devices, so the patterning is positive for them, but the cost is an issue in the pricing. So I think that DRAM capacity adds will be moderate. Sidney Ho - Deutsche Bank Securities, Inc.: Okay. And my follow-up question is, now that the deal is over and the reason being future product roadmap, can you talk about what areas within etch and deposition that you are not currently strong in but you are expecting to gain share in the future? Robert J. Halliday - Chief Financial Officer & Senior Vice President: The DOJ certainly was confident, I'll tell you that. Gary E. Dickerson - President, Chief Executive Officer & Director: I think as we've talked about last year, we had just tremendous momentum in etch and CVD with 50% revenue growth, and we really are optimistic about the momentum we have in both of those different areas. And so we continue to believe that the opportunity for us for share gains and growing those businesses is very good. Another area that we see as a great opportunity is ALD. We've been investing in new technology there. And we believe that that has potential for significant future growth. We have very strong pull from customers for this new technology that we've developed, but we're not in a position really to give any more color at this time. But that's certainly another area on top of the momentum that we have in etch and CVD where we see a great opportunity. Sidney Ho - Deutsche Bank Securities, Inc.: Okay, great. Thanks.

Your next question comes from the line of Mark Heller from CLSA. Your line is open. Mark J. Heller - CLSA Americas LLC: Thanks for taking my question. Gary, I didn't quite catch it. But the display mix in I guess fiscal 2016, did you say if that's LCD or OLED related? Robert J. Halliday - Chief Financial Officer & Senior Vice President: The 2016 mix is – I'll start at the higher level. Most of it's weighted towards smaller feature sizes. That would be the cell phones versus TVs. And when you look within it, most of those are all OLED, and it's particularly LTPS, a lot of it. Gary E. Dickerson - President, Chief Executive Officer & Director: The mix, as Bob talked about, the mobility mix versus TV is really up about – the percentage of the mobility is up about 2x if you look year to year, and then it goes back down to a more normalized mix between the two different markets for us. So that particular year, we see the mix of mobility up a significant amount, double what it was the year before, and we think the year after it will go back down to this more normalized mix that we've seen for a number of years. Mark J. Heller - CLSA Americas LLC: Okay, got it. And then going back to this WFE question, I remember in 2013 you gave the financial model before the TEL deal was announced, talking about WFE may be as high as $37 billion. I know you're not giving an official forecast for next year. But is there something that's tempering how high WFE can go in a given year? Has something changed there? Robert J. Halliday - Chief Financial Officer & Senior Vice President: I'll give you my observations. When we put the model out in July 2013, one of the biggest reasons for that number was that was Dataquest's number basically at that time. We didn't know 2017 – 2016 rather. And then we put up three numbers at that time, $30 billion, $33.5 billion and $37 billion. And a fair amount of our focus was on the $33.5 billion. In terms of what next year will be, we really haven't spent much time. I think it's a pretty healthy year. Could be north of that. I honestly don't know. I don't even know what Dataquest says. Do we know what Dataquest says for next year? It's up a little more than that. I think Dataquest is maybe $34 billion or something. Mark J. Heller - CLSA Americas LLC: Thank you. Gary E. Dickerson - President, Chief Executive Officer & Director: I think certainly what we can see relative to our business, if you look at what's going to happen over the next two or three years, this transition in 3D NAND, as we said, by the end of this year you only have 10% of the capacity with 3D NAND. So that transition is really a good one for us, and the 10-nanometer transition we believe is a great opportunity. So those are going to be some of the major drivers for us over the next two or three years. And then we try to size the business relative to a normal run rate on WFE. And certainly there could be drivers to make it higher than that. But from a planning standpoint, we're sizing it around the $33 billion to $33.5 billion level. Mark J. Heller - CLSA Americas LLC: Thank you.

Your next question comes from the line of Mahesh Sanganeria from RBC Capital Markets. Your line is open. Mahesh Sanganeria - RBC Capital Markets LLC: Yes, thank you. I just want to – I have a follow-up question on 3D NAND. Right now you have a couple of customers adding capacity for production and the use are probably not at the highest level. And they're working – different customers are working on different structures. My question is at the maturity on 3D NAND, 48-layer TLC, what bit density do you get on the wafer compared to planar? Are they closer to getting three-to-one, or are they far behind that? Robert J. Halliday - Chief Financial Officer & Senior Vice President: I'll do it from memory. I don't have this in front of me, Mahesh. Our take on it was the initial transition from planar to 3D, they got traditional type of bit growth that they get in a planar shrink. They get the bigger capital efficiency and bit growth going from first generation to second generation 3D. Now what we used to run in models was a lot of 32-bit to 64-bit. So 32-bit to 64-bit, you get over 100% because you get the scaling and also the size. I don't even know if it shrinks at 40-nanometer – 50-nanometer stuff. So I think the big opportunity for them is 64-bit. 48-bit is a midway I'd say. So I'd say it's moderate. It's better than first generation, not as good as 64-bit. Mahesh Sanganeria - RBC Capital Markets LLC: Okay. And then on your WFE number, I suppose the last quarter you had a little bit higher number than now, and of course a lot of changes has happened since last quarter. Can you articulate what you have seen changes in segment-wise from last quarter to this quarter in terms of DRAM flash and logic and foundry? Robert J. Halliday - Chief Financial Officer & Senior Vice President: We haven't actually changed a lot. We were about a $33.5 billion last quarter. Kind of about $33 billion now. Some of that's just FX as you run it through the euro on WFE. The euro doesn't affect us much, but euro and yen. So then the second thing is there have been some announcements like TSMC seems a little less. But I'm actually feel like maybe NAND is a little stronger later in the year. So net-net, I'm neutral on the year. In terms of how we feel specifically by space, we're a little higher on DRAM now than we were last quarter, a little higher on NAND than we were last quarter. We're a little lower on foundry, and logic probably a little negative too from last quarter. Mahesh Sanganeria - RBC Capital Markets LLC: That's very helpful. Thank you very much. Robert J. Halliday - Chief Financial Officer & Senior Vice President: You're welcome.

Your next questions comes from the line of Tom Diffely from D.A. Davidson. Your line is open. Thomas Diffely - D.A. Davidson & Co.: Good afternoon. So as it pertains to growth, you talked a lot today about 3D NAND and you talked about the 10-nanometer transition. What about DRAM? Is DRAM in your mind a growth market for you in the next couple years? Robert J. Halliday - Chief Financial Officer & Senior Vice President: Yes, I think so. I mean I think so. I think that if you'll look at it, what's driving it: number one, wafer starts; number two, capital intensity; number three, our position there. So if you go look at 2015, we think overall spending is up, I don't know, 15% or something like that, 15% to 25%. And if you look at our position there, it's been improving. We gained share in DRAM in the last year or two, and we think that will continue this year. Gary E. Dickerson - President, Chief Executive Officer & Director: Yes. Robert J. Halliday - Chief Financial Officer & Senior Vice President: Go ahead, Gary. Gary E. Dickerson - President, Chief Executive Officer & Director: I think DRAM, mobile DRAM especially has been driving incremental investment, and we're happy that our share of that market is increasing. And so that is a positive driver. But you don't have the same... Robert J. Halliday - Chief Financial Officer & Senior Vice President: Inflections. Thomas Diffely - D.A. Davidson & Co.: Yes. Gary E. Dickerson - President, Chief Executive Officer & Director: ...inflections in the DRAM business going forward that you have in 3D NAND and you have certainly in the FinFET technologies. The 3D NAND, the litho CapEx is declining, and the areas that we're participating in are going up a significant amount. And so we have an opportunity there with not only the CapEx increase, but more of the CapEx being spent on our area of the market, a significant change from what was there in the planar technology node. And the same thing is true on the FinFET technology. Again, that really leverages our materials engineering, some of our strongest products, as those technologies inflections are happening. So the DRAM opportunity is a good one for us, but it's not the same order of magnitude driver for us as the transition to 3D NAND and FinFET. And that's my feeling. Robert J. Halliday - Chief Financial Officer & Senior Vice President: I agree with you. Most of what they're doing this year is conversions versus capacity adds. Thomas Diffely - D.A. Davidson & Co.: Okay, that's helpful. And then on the display side, is the move of OLED to TVs, is that the sweet spot for you going forward, or do you think margins might be an issue at that point as well? Gary E. Dickerson - President, Chief Executive Officer & Director: We think that OLED is more focused on mobile right now, the smaller screens for mobility types of applications, not so much on TVs. Robert J. Halliday - Chief Financial Officer & Senior Vice President: It's pretty expensive for TVs. Thomas Diffely - D.A. Davidson & Co.: I was thinking out the next couple of years when it does ultimately move to TVs if that is more of the sweet spot for you versus next year. Gary E. Dickerson - President, Chief Executive Officer & Director: There's no question. OLED in general, we've said, if you look at it more as silicon compared to OLED, our TAM grows about 2x. So certainly as OLED is adopted, both in mobility and in the future in the TV market, that is a really great transition for us. And you really can see it also in the thin film encapsulation. We talked about the incremental opportunity there, but there are more deposition steps as you go to OLED technology. So the adoption in any of these different markets for us is a really good driver. Thomas Diffely - D.A. Davidson & Co.: Okay, thank you. Michael Sullivan - Vice President-Investor Relations: Thanks, Tom. And, Kyle, we have time for just one more question, please.

Your last question comes from the line of Edwin Mok from Needham. Your line is open. Edwin Mok - Needham & Co. LLC: Hey, thanks for squeezing me in, guys. So first question in terms of just directionally maybe in the second half of the year versus first half, how do you see your booking trending between the DRAM/foundry and logic buckets? Robert J. Halliday - Chief Financial Officer & Senior Vice President: We think foundry is up in the second half. We think – do you have bookings? Edwin Mok - Needham & Co. LLC: Yes. Robert J. Halliday - Chief Financial Officer & Senior Vice President: Foundry is up. DRAM is down a little bit. NAND is up. Logic is flat. Edwin Mok - Needham & Co. LLC: Okay, great. That's helpful, and then I guess a question on PDC. So we saw some of the data from Gartner they published around market share, and it seems like PDC may be down a little bit last year. Can you maybe help us with that a little bit? Is it due to mix? How do you guys see your position? And I think you talked about 10-nanometer being an opportunity and obviously it's much higher process control intensity. How do you think you're positioned there? Do you think that could drive some incremental growth there potentially starting in 2016? Gary E. Dickerson - President, Chief Executive Officer & Director: Again, relative to the intensity of the percent WFE, PDC – this area has not been a great driver over the last couple years. And relative to some of the other inflections that we're focused on, we don't see this as being as large an inflection in our markets as some of the other areas. But as I talked about earlier, our business is really, if we look at 2015, more heavily weighted towards E-Beam segments, where we have a lot of strength, really great technologies. That segment of the market is growing fast and we really see a great opportunity for us to leverage that strength in growing that part of the market. In the optical inspection area last year, certainly the mix of customers worked against us, but we recently had a really strong quarter relative to orders from a couple of large foundries. And we look at our technology position there as incrementally better than where we were at before. So we're optimistic overall PDC growth in 2015 will be good for us, and then really being positioned from a technical standpoint going forward in PDC where we think this can be a growth driver. I wouldn't say this is on the same scale as some of the other opportunities we have on the inflections and the 3D NAND and 10-nanometer FinFET. But certainly incrementally it's a positive for us, and the incremental profit from that business is also very good overall. Edwin Mok - Needham & Co. LLC: Great, thanks. Michael Sullivan - Vice President-Investor Relations: Thank you, Edwin, for your question, and we'd like to thank everyone for joining us this afternoon. A replay of this call will be available on our website beginning at 5 PM Pacific Time today. Thank you for your continued interest in Applied Materials.

This concludes today's conference call. You may now disconnect.