In the quarter ending January 31, 2022, Applied Materials (AMAT), a semiconductor equipment manufacturer, says its semiconductor systems backlog grew by $1.3 billion to a record $8 billion. On its earnings call, Applied’s CFO Bob Halliday made it clear the company could have sold much more if not for supply constraints:

“What this tells us is that in an unconstrained environment, we would have produced substantially higher revenue and demonstrated a healthy share gain in calendar 2021.”

Even better, Applied forecast wafer fab equipment (WFE) spending to grow more than 15% to $100 billion in 2022. The company, which had a record 2021, expects to grow sales each quarter by mid-single digits through the end of calendar 2022. It also expects 2023 to be a growth year.

Supply chain issues aside, the only black eye in the quarter was a 13% decrease in sales to Korea— home to chipmakers Samsung and SK Hynix, which combined have pledged to spend more than $250 billion by 2030. In its latest 10-Q, Applied provided no detail about the Korean decline:

“The decrease in net sales to customers in Korea for the three months ended January 30, 2022 compared to the same period in the prior year primarily reflected decreased investment in semiconductor manufacturing equipment.”

But with seemingly everyone in the industry concerned about the possibility of double ordering, Applied hinted the Korean pause is temporary. The global number of new shell counts— or fabrication plants that have to be built before being outfitted with chip manufacturing equipment— will usher in strong sales when construction is complete.

Likewise, Applied cited two key demand drivers; demand for cutting edge nodes, and less cutting edge node equipment rolling over to produce legacy nodes as when replaced (it’s still needed to meet demand for more advanced chips). Without specifically reassuring on Korea, CFO Halliday still signaled the all-clear for the next two years:

“I don't think we're overheated right now. We have lots of orders. The mix is the type of mix, it's not crazy mix. Now you can drill into ICAPS in China a little bit. But I think we're pretty good this year and probably next year.”