Applied Materials, a leading US chip equipment maker, has reported strong fiscal third-quarter earnings driven by the increasing demand for artificial intelligence (AI) chip equipment. The company’s revenue reached a record high, driven by surging demand for AI chipmaking, particularly in China. Despite exceeding analysts’ expectations, Applied Materials’ shares fell slightly in extended trading hours.
CEO Gary Dickerson stated that the race for AI leadership is fueling demand for their products and services, positioning the company for long-term outperformance in the market. Sales of data storage, specifically Dynamic Random Access Memory (DRAM), accounted for a significant portion of the revenue growth. However, semiconductor equipment makers like Applied Materials may face challenges due to US regulatory restrictions impacting sales in China.
The company also provided slightly higher-than-expected guidance for the current quarter, suggesting a slight slowdown in growth compared to the reported quarter. Applied Materials’ strong performance highlighted its growing competition with European tech giant ASML. Despite ASML’s higher market capitalization and revenue, some analysts believe that Applied Materials may have stronger growth prospects due to its introduction of new technology that competes with ASML’s offerings.
Both companies supply similar AI chip equipment to major tech firms, but with slight differences in product offerings. Applied Materials specializes in integrated circuits used in electronic devices, while ASML provides more advanced technology for creating smaller, more powerful chips. The competition between the two companies is intensifying as they strive for dominance in the AI chip equipment market.
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