Applied Materials Inc, the largest US maker of chip-manufacturing equipment, gave a lackluster forecast for the current period, highlighting the potential cost of the US trade dispute with China.
Sales would be about US$7.2 billion in the fiscal third quarter, plus or minus US$500 million, the company said in a statement on Thursday.
That was about in line with Wall Street estimates, although some analysts projected as much as US$7.4 billion. Profit would be about US$2.35 a share.
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Applied Materials and other chip-industry companies are adjusting to restrictions on sales to China, one of the biggest markets for their products.
The impact of tariffs imposed by Washington are also making it more difficult to project future revenue.
“There is more uncertainty in the market,” Applied Materials chief executive officer Gary Dickerson said in an interview.
“Despite that, the company is performing incredibly well,” he added.
Applied Materials shares fell more than 4 percent in extended trading following the announcement. They had earlier closed at US$174.75, leaving the stock up 7.5 percent for this year.
Applied Materials in February said rules adopted in the final months of former US president Joe Biden’s administration would knock about US$400 million off fiscal revenue for this year.
That is because Applied Materials would have to stop servicing equipment at some customer sites in China. However, technology export restrictions have continued to evolve under US President Donald Trump.
China accounted for 25 percent of Applied Materials sales previous quarter, down from 43 percent a year earlier.
Fiscal-second quarter profit was US$2.39 a share, excluding some items, compared with an analyst prediction estimate of US$2.31.
Revenue rose 7 percent to US$7.1 billion in the period, which ended on April 27, in line with estimates.
Demand remains strong for machines needed to make high-end processors for AI computing, but orders for less complex machinery used to make cars and industrial components have slowed, Dickerson said.
Applied Materials’ management has said that the industry is in a historic period of expansion. The rapid spread of semiconductors to new products and the AI boom would help maintain demand, Dickerson has said.
The sheer complexity of chips has also added pressure on customers to upgrade their equipment.
Applied Materials’ customer ranks include some of the biggest names in the chip industry, including Taiwan Semiconductor Manufacturing Co. (台積電) Samsung Electronics Co and Intel Corp.
Those manufacturers order gear well ahead of starting production, making Applied Materials’ forecasts a barometer for future demand.
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