Top Chipmakers Forecast Revenue Growth as AI and Consumer Product Demand Rebounds: Report

Taiwan Semiconductor Manufacturing Co TSM supplier Applied Materials Inc AMAT will likely gain revenue this quarter, as shown by company and market forecasts, indicating a reversal in the global market downturn.

Eight out of nine leading device makers are on track to exceed last year’s quarterly revenue, contrasting the previous quarter, where six out of nine saw sales decrease, the Nikkei Asia reports.

This shift results from increased AI demand and China’s efforts to build a self-sufficient chip industry. Demand related to smartphones and other consumer products will likely rebound.

Applied Materials recently projected revenue between $6.25 billion and $7.05 billion for the May-July quarter. 

Applied Materials clients have increased factory utilization rates, and demand for equipment used in manufacturing DRAM memory semiconductors is growing.

Optimism about AI-related demand drives these optimistic forecasts. Applied Materials, in particular, cited high bandwidth memory used in generative AI computing.

Analysts flagged the company as a long-term share gainer thanks to Logic/Foundry (i.e. Gate-All-Around) and DRAM (i.e. HBM) rebound backed by the data center market.

Tokyo Electron will likely boost revenue by around 30% in the April-June quarter, based on market forecasts. Investment in servers for AI development and operations will play a significant role.

Tokyo Electron anticipates the global market for front-end chipmaking processes to grow 5% this year to $100 billion.

Dutch competitor ASML Holding NV ASML is the exception among the nine companies with a negative quarterly forecast, but expecting a stronger recovery in demand in the second half of the fiscal year.

Earnings for chipmakers and chipmaking device manufacturers fell short of high market expectations during the January-March quarter, leading to a sector sell-off.

Price Action: AMAT shares are trading higher by 2.50% at $223.60 premarket at the last check on Thursday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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