October 1, 2023

July 27 (Reuters) – Chip-making tools maker KLA Corp (KLAC.O) forecast first-quarter revenue and profit above Wall Street estimates on Thursday, boosted by higher investments in artificial intelligence (AI), sending its shares up nearly 3% after the bell.

Businesses across sectors have been racing to integrate AI tools after OpenAI’s ChatGPT caught the attention of consumers and investors, benefiting companies like KLA that are essential to the chip supply chain.

“KLA is benefiting from demand drivers in markets including silicon wafer and photomask manufacturing, each of which is experiencing general capacity expansion,” the company said in a letter to shareholders.

The company has also benefited from chipmakers looking to diversify their supply chains out of China, as trade tensions with the U.S. intensify.

KLA shipped additional manufacturing tools during the fiscal fourth quarter to one of its Chinese memory customers because of a clarification of the export rules, finance chief Bren Higgins said in the conference call with analysts.

Companies, including Intel, TSMC, Samsung, Texas Instruments and Micron, are building new plants across the United States, raising the demand for chip tools.

KLA makes tools for inspecting the silicon wafer discs, on which semiconductors are built, for defects.

The company, forecast first-quarter adjusted profit of $5.35 per share, plus or minus 60 cents. Analysts were expecting $4.75 per share, according to Refinitiv data.

In the quarter ended June 30, revenue came in at $2.36 bln while adjusted profit was $5.40 per share. That compared with analysts’ estimate for revenue of $2.26 bln and adjusted profit of $4.85.

In the June quarter, 30% of KLA’s revenue came from China and 21% from Taiwan, while North America contributed to 13% of sales.

Meanwhile, KLA’s client Intel (INTC.O) posted a surprise profit as a PC market slump started to ease after the personal computer market tumbled over the past year.

Reporting by Akash Sriram, Akshita Toshniwal and Tanya Jain in Bengaluru, additional reporting by Max A. Cherney in San Francisco; Editing by Arun Koyyur and Cynthia Osterman

Our Standards: The Thomson Reuters Trust Principles.

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