(Bloomberg) -- KLA Corp., one of the largest makers of semiconductor manufacturing equipment, gave a strong revenue forecast for the current period, signaling that the chip industry may be nearing a recovery.
Sales in the period ending September will be about $2.35 billion, the company said Thursday in a statement. Analysts on average estimated $2.22 billion, according to a Bloomberg survey.
The outlook suggests that chipmakers are ready to start spending on new equipment again following an industry slowdown. KLA and its peers saw a steep drop in orders of new gear after demand for many types of electronics faltered. The chip-equipment industry is famous for its boom-and-bust cycles, and investors have been trying to pinpoint when the next upswing will begin.
The shares increased about 4.5% in extended trading after closing at $482.35 in New York. The stock has gained 28% this year.
Global semiconductor revenue is projected to fall 11% this year, according to forecast from Gartner Inc. But the industry remains optimistic that sales will bounce back in the longer term. Chipmakers such as Intel Corp. are projecting that the market will double to a $1 trillion in annual sales by 2030. That expansion will require much more capacity — and the kind of machines that KLA makes.
The Milpitas, California-based company is the leader in so-called production control. Its machines check that the steps in manufacturing semiconductors have been completed properly. As complexity increases, KLA’s gear has a more vital role in the process.
Lam Research Corp., another Silicon Valley chip-equipment maker, gave a stronger earnings forecast than expected on Wednesday, helping bolster its shares.
But KLA, Lam and Applied Materials Inc. — the three big US makers of chip machinery — are facing headwinds in what was their fastest-growing market: China. The Biden administration has set export controls on some of their products as part of its efforts to restrict China’s ability to make cutting-edge chips. That wiped out hundreds of millions of dollars in revenue.
Excluding some items, KLA’s fiscal fourth-quarter profit was $5.40 a share. Revenue declined about 5.3% to $2.36 billion in the period ended June 30, the company said. That compared with the average estimates of $4.85 a share in earnings and sales of $2.25 billion.
©2023 Bloomberg L.P.
Advertisement