KLA forecasts first-quarter revenue above estimates, but flags China weakness
New orders for chipmaking equipment are expected to benefit from strong demand for advanced processors capable of supporting artificial intelligence technology.
"These results reflect the unique and compelling opportunity within semiconductor capital equipment for KLA's continued role in enabling and supporting the AI infrastructure buildout," CEO Rick Wallace said in a statement.
KLA forecast revenue to be $3.15 billion, plus or minus $150 million for the first quarter ending in September, compared with analysts' average estimate of $3.05 billion, according to data compiled by LSEG.
Chip industry bellwether and KLA customer TSMC is expanding U.S. production, aligning with efforts by President Donald Trump to onshore chip supply chains, potentially boosting demand for KLA's equipment.
TSMC contributed more than 10% of KLA's total revenue in the fiscal year ended June 30, 2024.
In the June quarter, demand for leading-edge logic, high-bandwidth memory (HBM) and advanced packaging were key contributors to sales, the company said.
These refer to complex manufacturing processes employed in the production of AI chips and advanced memory chips used in AI applications.
For 2025, the company said it is maintaining its original forecast for mid-single-digit growth in the wafer-fab-equipment market.
The company reported fourth-quarter revenue of $3.18 billion, beating estimates of $3.08 billion.
Adjusted profit for the quarter ended June 30, at $9.38 per share, also beat estimates.
CHINA WEAKNESS EXPECTED
KLA expects lower overall demand from China this year, the company said in a letter to shareholders.
Shares of the Milpitas, California-based company fell about 1% in extended trading.
China, an essential market for semiconductor firms, was KLA's largest revenue driver in the June quarter, accounting for 30% of total sales.
However, Sino-U.S. trade tensions and export restrictions pose risks to American chip firms' ability to serve the market.
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