Lithography — the machine that prints a chip's pattern — usually gets credited as the hero. But the machines that actually "build" the transistors are a different group, working quietly in the background: they spray on films just atoms thick (deposition), then etch away the excess to leave a pattern (etch). Repeat that over a hundred times and you get a single chip. This tool market runs into the tens of billions of dollars a year, is controlled by just a handful of companies, and is the real "picks and shovels" that every AI chip has to pass through.
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News & notes movingDeposition, Etch & Process Tools
Deposition, Etch & Process Tools▲impact 4
KLA Lifts Calendar 2026 WFE Market Estimate to Low-$150 Billion Range
KLA Corporation is benefiting from accelerating artificial intelligence infrastructure spending, which is driving higher investments in leading-edge foundry and logic technologies and boosting demand for its process-control solutions. In fiscal 2026, the Semiconductor Process Control segment's revenues increased 12% year over year, and overall fiscal 2026 revenues rose 12% year over year to $13.58 billion. During the fourth quarter of fiscal 2026, management raised its calendar 2026 wafer-fabrication equipment market estimate, including advanced packaging, to the low-$150 billion range, up from its previous $140 billion-plus view and approximately $120 billion in calendar 2025. KLAC expects second-half 2026 revenues to be approximately 20% higher than the first half, aided by high-performance computing, high-bandwidth memory, increasing extreme ultraviolet adoption in DRAM and advanced packaging technologies such as hybrid bonding, and said backlog was expected to reach about $12.5 billion. The company faces intensifying competition from Applied Materials, which expects its process diagnostics and control business to grow more than 50% in calendar 2026, and from ASML, which expects advanced foundry and logic revenues to rise about 25% in 2026 and extreme ultraviolet revenues to increase roughly 45%.
Kingsemi's second-largest shareholder Liaoning Kefa plans inquiry-based transfer of 1% stake; share price up over 145% this year
After market close on September 18, Kingsemi announced that shareholder Liaoning Kefa Industrial Co., Ltd., which holds more than 5% of the company, intends to carry out an inquiry-based transfer of pre-IPO shares totaling 2.021 million shares, representing 1.00% of the company's total share capital, citing its own capital needs. Liaoning Kefa currently holds 21,315,832 shares, or 10.55% of total share capital, making it the company's second-largest shareholder, behind only NAURA Technology Group Co., Ltd. at 17.84%. The transfer is being organized by CITIC Securities Co., Ltd., with a minimum transfer price of no less than 70% of the average stock trading price over the 20 trading days before September 18, 2026. Transferees must be institutional investors and may not transfer the shares within six months of acquisition. Based on a rough estimate using the September 18 closing price of 363.98 yuan per share, the corresponding market value is approximately 736 million yuan. Just over a month earlier, company directors and senior executives Zhang Xinchao, Wang Mingbo, Cheng Hu, and Liu Shujie had announced reduction plans to sell no more than 63,093 shares in total. As of September 18, Kingsemi's share price had risen 145.09% year-to-date. In the first half of 2026, the company achieved operating revenue of 897 million yuan, up 26.47% year-on-year, while net profit attributable to shareholders of the listed company was 8.0622 million yuan, down 49.37% year-on-year.
Applied Materials Bets $5 Billion on India Semiconductor Buildout
Applied Materials is committing $5 billion over a decade to India's semiconductor push, a bet on research, suppliers and talent that Reuters reported Thursday. The spending plan works out to roughly $500 million a year and targets the infrastructure India still needs to become a serious chip-manufacturing hub. India expects semiconductor consumption to reach $110 billion by 2030, up from roughly $45 billion to $50 billion in 2025, but only three packaging plants are operating and a large-scale fabrication ecosystem has yet to fully emerge. For Applied, the annualized commitment equals only about 1.4% of revenue based on its record $9.12 billion quarterly sales, leaving room to build an early position without letting India dominate capital allocation. The shares traded around $416.40, up roughly 0.3%, and GuruFocus data shows the market price sitting 68.39% above GF Value of $247.28.
Aeluma Targets AI Datacom With $30 Million CHIPS LOI and $56 Million Cash
Aeluma Inc is shifting its near-term commercialization focus to the AI datacom market, backed by a letter of intent with the Department of Commerce CHIPS R&D Office for up to $30 million in non-dilutive funding. The company ended fiscal 2026 with $56 million in cash and no debt, but reported a net loss of $9.2 million, wider than the $3 million loss in fiscal 2025, and adjusted EBITDA of negative $5.2 million versus positive $186,000 a year earlier. Aeluma expects government contract revenue to fall to approximately $2.3 million in fiscal 2027 from $4.5 million in fiscal 2026, while planning capital expenditures of $10 million to $12 million, mainly for two Aixtron G10 MOCVD reactors. The company strengthened its manufacturing partnership with Sumitomo Chemical Advanced Technologies and is negotiating commercial NRE agreements, though no deals are guaranteed. Management said the CHIPS award, if finalized, would likely be accounted for as an equity investment by the U.S. government rather than revenue.
Axcelis Eyes Mid-Single-Digit 2026 Revenue Growth as Veeco Merger Awaits China Approval
Axcelis Technologies is pointing to renewed growth as memory, power and aftermarket demand improve, with management expecting full-year 2026 revenues to grow at a mid-single-digit rate and further growth in 2027. The Zacks Consensus Estimate calls for 2027 revenues of $981 million and earnings of $5.29 per share, versus $884 million and $4.12 expected for 2026. Customer Solutions & Innovation revenues increased 35.1% year over year to $82.8 million in the second quarter of 2026, up 14% sequentially from $72.6 million. Second-quarter non-GAAP gross margin was 42.7%, down from 45.2% a year earlier, and non-GAAP operating margin fell to 14.7% from 17.7%, even as revenues rose 10.6% year over year. Axcelis trades at 21.2X forward 12-month earnings, above the Zacks industry multiple of 20.0X and its five-year median of 18.6X, and its pending all-stock combination with Veeco Instruments still depends on regulatory approval from China's State Administration for Market Regulation after shareholders approved the related share issuance in February 2026.
Axcelis to Invest $35 Million in New South Korea Manufacturing Facility
Axcelis Technologies plans to invest $35 million in a new ion implantation equipment facility in Pyeongtaek, Gyeonggi Province, South Korea. The planned site will span approximately 200,000 square feet and include warehousing, Class 1,000 and Class 10,000 cleanrooms and a training center, building on the company's existing Asia Operations Center in the country. South Korea generated 26% of second-quarter revenues, up from 13% a year earlier, making it the company's second-largest revenue region after China. Systems bookings increased 36.1% year over year to $130.9 million in the second quarter, while systems backlog was $451.6 million, down 21.6% from $575.7 million a year earlier. Axcelis ended the second quarter with $577 million in cash, cash equivalents and marketable securities, and free cash flow of $14.8 million included about $6 million of cash transaction expenses related to the pending Veeco merger.
Applied Materials AGS Revenue Hits Record $1.78 Billion, Up 22%
Applied Materials' Applied Global Services business posted record revenue of $1.78 billion in the third quarter of fiscal 2026, up 22% year over year, with operating margin improving 280 basis points. Management said customers are bringing new fabs online while optimizing existing facilities, and more than 37,000 chambers are now connected to Applied Materials' AIx software for AI-powered monitoring, diagnostics and predictive analytics. The company added more than 1,500 manufacturing and AGS support employees in the quarter and plans to double quarterly system output from current levels by 2028, with further capacity additions through 2030. Customers are providing longer-term forecasts that support AGS revenue growth of more than 20% in 2026 and a sustainable mid-teens annual rate over the longer term, and Applied Materials expects AGS revenue of approximately $1.84 billion in the fourth quarter of fiscal 2026. Applied Materials expects non-GAAP earnings of $4.02 per share, plus or minus 20 cents, for 85% year-over-year growth at the midpoint, while the Zacks Consensus Estimate points to 86.6% growth.
BofA Lifts US Semiconductor Growth Forecast to 18% Through 2030
Bank of America raised its growth forecast for the US semiconductor industry, projecting an 18% compound annual growth rate between 2026 and 2030, up from its previous estimate of 14%. The bank attributed the revision primarily to higher expectations for memory chips and server-related components, and now forecasts the industry's total addressable market will reach $3.2 trillion by 2030, up from its previous estimate of $2.7 trillion. BofA said the industry took approximately 50 years to reach $1 trillion in sales but could double its current estimated market size of $1.7 trillion within four years, citing customer orders and capacity commitments across the data-centre and AI sectors. Separately, the bank raised its forecasts for the wafer fabrication equipment market, expecting spending to reach $156 billion in 2026, a 33% increase from the prior year, and $210 billion in 2027, representing projected annual growth of 34%, with the revisions reflecting higher expected spending on memory manufacturing equipment, particularly for DRAM production. BofA forecasts DRAM equipment spending of $61 billion in 2026 and $85 billion in 2027, and estimates the overall wafer fabrication equipment market could reach $360 billion by 2030, a compound annual growth rate of approximately 23% between 2026 and 2030.
Applied Materials Forecasts First $10 Billion Quarter This Fall
Applied Materials is guiding toward its first-ever $10 billion revenue quarter, with management setting a midpoint of $10.25 billion, plus or minus $500 million, for its fiscal fourth quarter of 2026, which runs through late October. That midpoint sits about 51% above the year-ago period, when fiscal fourth-quarter revenue fell 3% to $6.80 billion. The guidance range bottoms out at $9.75 billion, so management's own forecast leaves room to fall short of the milestone. The company's fiscal third quarter, ended July 26, was itself record-setting, with revenue rising 25% year over year to $9.12 billion and non-GAAP earnings per share reaching a record $3.50, up 41%. Management has beaten its own guidance all year, and CEO Gary Dickerson said in the fiscal third-quarter earnings release that based on increased demand visibility from customers, the company expects another strong growth year in 2027. Applied guided fourth-quarter adjusted earnings per share to $4.02, plus or minus $0.20, up about 85% from the year-ago quarter's $2.17, and shares trade around $462, down about 38% from their 52-week high of $739.67.
AI Leaders Call for Slowing Frontier Development as DeepMind RSI Rumors Swirl
Anthropic CEO Dario Amodei called for slowing frontier AI development, a position OpenAI CEO Sam Altman backed by saying the industry needs to "pace the frontier," and Elon Musk agreed, as fears grow that the alignment problem remains fundamentally unsolved. Amodei wrote on September 12 that AI has been advancing drastically faster since roughly this summer, driven by AI's growing ability to help build the next generation of AI, a dynamic he now explicitly calls recursive self-improvement and says is beginning across the industry, including at Anthropic. OpenAI has disclosed that its researchers were already using 3.1 agent-workdays for every human workday by mid-August, and Reuters reported on August 12 that Google co-founder Sergey Brin had been pushing resources inside DeepMind toward recursive self-improvement, putting Alphabet directly inside the story. Amodei's proposal hinges on China: he argues U.S. frontier labs can only slow by roughly the amount of their technological lead over Chinese projects, and his first recommendation is to stop selling powerful AI chips and semiconductor-manufacturing equipment to China, saying chips will be the main determinant of China's AI strength. That places Nvidia at the physical center of the debate, since its Data Center revenue reached $89.0 billion in fiscal Q2 2027, up 117% from a year earlier, yet the company has said current U.S. policy has effectively shut it out of China's data-center compute market and its fiscal Q3 outlook assumes no Data Center compute revenue from China. DeepMind Chair Demis Hassabis has said Amodei's essay points toward the right path forward, while noting the details still need work.
Cramer Calls Applied Materials a Long-Term Buy as CEO Flags 40% Growth
Jim Cramer told a Mad Money caller on September 9 that he would go beyond holding Applied Materials and make it a long-term buy, citing CEO Gary Dickerson's interview with David Faber that day. Speaking at the Goldman Sachs Communacopia + Technology Conference on September 9, Dickerson said Applied's semiconductor equipment business was approaching 40% revenue growth in 2026, up from forecasts of more than 20% in February and more than 30% in May, driven largely by AI and data-center demand, with agentic AI identified as a major 2026 driver. Dickerson said the company has an eight-quarter rolling forecast and customer commitments extending through 2030, and that growth in 2027 would be strong and growth beyond 2027 very strong, though he gave no specific 2027 figure. Applied Materials' fiscal third-quarter revenue rose 25% year over year to a record $9.12 billion, while GAAP EPS increased 43% to $3.17. The stock closed at $468.85 on September 9, a 26.25 forward P/E, with China at $2.506 billion, or 28% of fiscal third-quarter revenue, down from 35% a year earlier, and the company recorded a $253 million charge tied to a settlement with the U.S. Commerce Department's Bureau of Industry and Security over export-controls compliance. Hedge fund holders of Applied Materials numbered 137 in the second quarter versus 138 in the first, and short interest stood at approximately 1.5% of the float.
Lam Research Says Chip Equipment Demand Is Sold Out, Eyes Mid-50% Gross Margins
Lam Research said semiconductor equipment demand is "fundamentally sold out," with eight to 10 new clean rooms expected at its tier-one customers between now and the end of next year. Speaking during a Goldman Sachs discussion, an unnamed Lam executive said the company is prioritizing customer execution, capacity readiness and product-roadmap delivery, and is expanding manufacturing, hiring and installation resources to meet tool demand that customers want sooner than Lam can provide it. Lam's Customer Support Business Group posted its third consecutive record revenue quarter at nearly $2.5 billion, covering spare parts, services, equipment upgrades and the Reliant mature-node product line. The company reported gross margin of 52%, its highest in 20 years, and reiterated guidance of 51% to 52%, while saying differentiated products, operating closer to customers and pricing efforts could lift gross margin into the mid-50% range over several years. Lam expects DRAM wafer-fab-equipment spending to remain the largest contributor next year, followed by leading-edge foundry and logic, with NAND also growing, and it said the NAND conversion cycle should involve about $40 billion in spending through the end of next year. The executive added that major M&A is not part of Lam's ongoing strategy, though the company may pursue small tuck-in acquisitions from time to time.
Applied Materials Posts Record Q2 Revenue of $9.12 Billion, Up 24.8%
Applied Materials reported quarterly revenues of $9.12 billion, up 24.8% year on year, exceeding analysts' expectations by 0.9%, as the 14 semiconductor manufacturing stocks tracked by the report delivered a very strong Q2 in which group revenues beat consensus estimates by 3.5% and next quarter's revenue guidance came in 6.5% above. President and CEO Gary Dickerson called it another record-breaking quarter with the highest sequential revenue growth in the company's history, citing significant improvement in inventory levels and next-quarter revenue guidance above analysts' expectations, though the stock is down 15.3% since reporting and trades at $453.00. Among peers, Kulicke and Soffa posted the group's fastest growth with revenues of $330.4 million, up 123% year on year and 5.7% above expectations, yet its stock is down 11.7% at $82.90, while KLA Corporation, the weakest of the group, reported revenues of $3.66 billion, up 15.2% and 1.3% above expectations, with its stock down 7.3% at $176.86. FormFactor reported revenues of $258.2 million, up 31.9% and 7.6% above expectations, with its stock up 34.7% at $112.38, and Lam Research reported revenues of $6.72 billion, up 30% year on year, meeting expectations, with its stock up 17.8% at $297.23.
TSMC Trades at $428 as 24/7 Wall St. Sets $492 Target on Record August Sales
Taiwan Semiconductor Manufacturing is trading at $428.29 against a 24/7 Wall St. price target of $492.37, implying 14.96% upside on a buy rating with 90% confidence. The call rests on record August 2026 revenue that surged 53.3% year over year, with January-through-August revenue up 39.3%, prompting management to raise full-year 2026 revenue guidance to slightly above 40% USD growth. Q2 2026 delivered EPS of $4.31 against a $3.8866 estimate, revenue of $40.20 billion, up 36.05% year over year, and a 67.7% gross margin, while Q3 revenue is guided to $44.6 billion to $45.8 billion and the 2026 capital budget was raised to $60 billion to $64 billion. The bull case leans on demand from Nvidia, whose Q3 guide of $108 billion, and Broadcom, whose Q3 FY26 AI semiconductor revenue reached $16.7 billion, up 221% year over year, effectively lock in TSMC's advanced-node order book, while Intel Foundry lost $2.1 billion in its latest quarter. The main near-term risk is gross-margin compression, with the 2nm ramp expected to dilute gross margin by 3 to 4 percentage points and overseas fabs adding another 2 to 3 points of drag, alongside Taiwan-Strait geopolitics as an unpriced tail risk; the bear-case one-year price is $413.79 against a bull case of $525.08 and a sell-side consensus target of $552.38.
Applied Materials has been drawing heavy investor attention after Zacks Investment Research assigned the chipmaking equipment maker a Zacks Rank #2 (Buy), citing upward revisions to analyst earnings estimates. The company is expected to post earnings of $4.05 per share for the current quarter, a year-over-year change of +86.6%, with the Zacks Consensus Estimate rising +13.3% over the last 30 days. For the current fiscal year, the consensus earnings estimate of $12.76 points to a change of +35.5% from the prior year, while the next fiscal year's estimate of $18.28 indicates a change of +43.3%. Revenue forecasts call for $10.29 billion in the current quarter, up +51.3% year over year, with current and next fiscal year estimates of $34.21 billion and $45.69 billion, representing changes of +20.6% and +33.6%. In its last reported quarter, Applied Materials posted revenues of $9.12 billion, up +24.8% year over year, and EPS of $3.5 versus $2.48 a year earlier, beating the Zacks Consensus Estimate of $9 billion by +1.31% on revenue and by +3.55% on EPS, and the company has topped consensus EPS and revenue estimates in each of the trailing four quarters. Despite the strong estimate momentum, Applied Materials carries a Zacks Value Style Score of D, indicating it trades at a premium to its peers.
JPMorgan Names KLA Top Chip-Equipment Pick, Lifts WFE Forecasts
JPMorgan raised its forecasts for the wafer fabrication equipment market and named KLA as its top pick among U.S. chip-equipment makers in a note to clients on Friday. Analyst Mio Shikanai lifted the bank's WFE market growth estimates to 31% for 2026, taking the market to $163 billion, 38% for 2027 at $225 billion and 17% for 2028 at $263 billion, a 28% compound annual growth rate over 2025 to 2028. Shikanai said cloud service providers are accelerating their investments in response to further growth in AI-related demand, with spending by the top four U.S. players seen growing at a 58% annual rate through 2028. DRAM memory and TSMC drove the upgrade, with the analyst expecting memory supply to lag demand even in 2028 and TSMC's leading-edge capacity to stay above 100% utilization. Shikanai said she sees the most attractive risk/reward in KLA given its relative underperformance year to date, underappreciated exposure to foundry and logic-led WFE spending in 2027, and potential for upward revisions to consensus revenue estimates, noting KLA shares are up about 50% this year but have lagged peers Lam Research and Applied Materials, up roughly 85% and 82%, respectively.
Memory Boom to Drive Chip Equipment Spending to Record $135.2 Billion in 2026
Global wafer-fabrication-equipment spending is projected to rise 16.9% to a record $135.2 billion in 2026, up from $115.7 billion in 2025, with memory equipment growing faster than the broader market. Within that total, 300mm DRAM equipment spending is projected to rise 29% to $37 billion and 300mm 3D NAND equipment spending is expected to increase 28% to $14 billion, while logic, foundry and other equipment spending remains the largest category at approximately $84.2 billion but grows just 10.6%. The combined $51 billion of DRAM and NAND equipment spending is being driven by Samsung Electronics, Micron Technology and SK hynix simultaneously expanding investment in advanced DRAM, high-bandwidth memory, NAND, cleanrooms and advanced packaging. Lam Research, the most direct beneficiary, reported record June-quarter revenue of $6.72 billion and fiscal 2026 revenue of approximately $23.23 billion, up from $18.44 billion in fiscal 2025, and recently raised its quarterly dividend 27% from $0.26 to $0.33 per share. KLA reported fiscal fourth-quarter revenue of $3.66 billion, up approximately 15% year over year, with fiscal 2026 revenue of $13.58 billion and GAAP net income of $4.83 billion, while ASML reported second-quarter 2026 net sales of €9.3 billion, a 54% gross margin and net income of €2.9 billion, and raised its expected 2026 net sales range to between €43 billion and €45 billion. The principal industry risk remains eventual memory overinvestment, though current investment is concentrated on advanced products, cleanrooms and process migrations.
Lam Research Returns Over $5.12 Billion to Shareholders in Fiscal 2026
Lam Research returned more than $5.12 billion to shareholders in fiscal 2026 through share repurchases and dividends. Buybacks were the larger component at $3.85 billion, up from $3.42 billion in fiscal 2025, while dividends totaled $1.27 billion. In the fourth quarter of fiscal 2026, revenues rose 30% year over year to $6.72 billion, non-GAAP operating margin expanded to 38.4% from 34.4%, and non-GAAP earnings per share climbed 37% to $1.82. In August 2026, the company raised its quarterly dividend by 27% to 33 cents per share from 26 cents. The Zacks Consensus Estimate for fiscal 2027 projects revenues of $8.10 billion, implying 52.1% year-over-year growth.
TSMC August Revenue Jumps 53% as Capex Hits Record $64 Billion
Taiwan Semiconductor Manufacturing Co. reported August revenue of NT$514.8 billion, or $16.3 billion, up 53.3% from a year earlier, though its shares slipped 0.40% premarket. Analysts expect 46.8% growth for the quarter as a whole, and the company guides to full-year sales growth slightly above 40% in dollar terms. TSMC is trying to build and equip roughly 20 factories at home and abroad, against a previous record of four or five simultaneously, with deputy co-chief operating officer Cliff Hou saying chipmaking tool requirements have nearly doubled since the end of last year. Capital expenditure is set for a record $60 billion to $64 billion in 2026, raised in July alongside revenue projections. TSMC also agreed this week to deploy ASML's High NA extreme ultraviolet machines in mass production from 2030, reversing a position it had held repeatedly on cost grounds, with the systems running up to $400 million each. Shares are up about 40% this year.
Axcelis to Build $35M Manufacturing Facility in Pyeongtaek, Korea
Axcelis Technologies, Inc. (Nasdaq: ACLS) announced plans to invest $35 million in a new ion implantation equipment manufacturing facility in Pyeongtaek, Gyeonggi Province, Korea, as part of its global manufacturing expansion. The facility will span approximately 200,000 square feet and include warehousing, cleanrooms, and a training center, with production slated to begin in the second half of 2028. President and CEO Russell Low said the investment underscores Axcelis' commitment to supporting global semiconductor demand. The announcement follows an Investment Declaration Ceremony in Washington, D.C., with Korean trade officials, and a groundbreaking is scheduled for October 20, 2026.
Weihong recently released an ultrafast laser cutting and cleaving integrated solution, officially entering the precision processing of glass substrate base materials. The solution integrates femtosecond or picosecond ultrafast lasers with Bessel beam shaping technology to achieve nanoscale precision micro-modification, and features self-developed PSO functionality triggered by physical spatial distance to improve cross-section consistency and yield. The accompanying ULC100 laser controller is based on EtherCAT bus and supports dual-laser synchronized control. The solution is currently adapted for cutting base materials such as OLED flexible glass substrates and semiconductor packaging carriers, with applications spanning semiconductor chips, photovoltaic new energy, and next-generation display panels. The company stated that the next step will be to advance R&D on large-format integrated cutting and cleaving production lines and five-axis PSO technology.
Sanfu Shares Hit Limit-Up with 160,000 Lots Queued
On September 8, major A-share indices opened mixed, with agricultural products and precious metals among the leading sectors. Sanfu Shares hit limit-up at 44.43 yuan per share, with 160,000 lots queued on the buy side. On the news front, on September 7, China's Ministry of Commerce issued an announcement deciding to impose provisional anti-dumping measures on imports of dichlorosilane originating from Japan. Dichlorosilane is mainly used in thin-film deposition during chip manufacturing, and several A-share companies have production capacity for it. Among them, Sanfu Shares' wholly-owned subsidiary Tangshan Sanfu Electronic Materials has an electronic-grade dichlorosilane capacity of 500 tonnes per year, with plans to expand to 850 tonnes per year.
Four U.S. Companies to Invest $2 Billion in South Korea in Semiconductors and Energy
South Korea's Ministry of Trade, Industry and Energy announced on the 4th that four U.S. companies have decided to invest a total of $2 billion in South Korea in the fields of semiconductors, advanced materials, and energy. The investments were announced at a ceremony attended by Trade Minister Cheong In-kyo in Washington on the 3rd. U.S. industrial gas giant Air Products will expand facilities for semiconductor gases and rare gases in Pyeongtaek, Gyeonggi Province, and semiconductor equipment maker Axcelis will expand its production of ion implantation equipment in South Korea. Additionally, materials giant Corning will invest in advanced glass and other materials used in displays and semiconductors, and renewable energy developer Pacifico Energy will proceed with a 3.2-gigawatt offshore wind power project in the southwest, where a new semiconductor cluster is expected to be established.
Applied Materials Enters New AI-Driven Growth Cycle
Applied Materials has entered a new AI-driven growth cycle, reporting record revenue of $9.12 billion with non-GAAP EPS of $3.50 and GAAP EPS of $3.17, and gross margin above 50% for the 13th consecutive quarter of year-over-year expansion. The company expects Q4 revenue of approximately $10.25 billion, up 51% year-over-year, with non-GAAP EPS of $4.02, up 85%, and Semiconductor Systems revenue projected to rise 62% to about $7.9 billion. UBS analyst Timothy Arcuri maintains a Buy rating with a $675 price objective, citing aggressive capacity expansion and share gains, and the company aims to double systems output capacity by CY 2028. Applied Materials also rolled out six new systems targeting DRAM and advanced packaging, and its $500 million Singapore expansion more than doubles advanced cleanroom capacity there. However, rising expectations leave little room for error, as any slowdown in AI-related semiconductor spending, subdued DRAM investment, or delays in advanced-node capacity additions could weigh on the stock.
Applied Materials Faces Growing China Risk from Domestic Equipment Push
Reports that Shanghai Aishengna Electronic Technology Group has begun producing immersion DUV systems sent shares of ASML Holding (ASML) down sharply, but the immediate threat to Applied Materials (AMAT) is overstated. Applied Materials does not make lithography systems; a Chinese immersion DUV machine competes directly with ASML, not with Applied Materials' deposition, etch, and other systems. However, China's directive requiring semiconductor manufacturers to use at least 50% domestically produced equipment when adding new capacity pressures Applied Materials' $4.2 billion annual China revenue. In fiscal Q1 2026, China accounted for $2.095 billion, or 29.9% of total revenue, and in Q2, $2.087 billion, or 26.4%. Six major Chinese equipment suppliers saw combined sales surge from $748 million in 2020 to $7.608 billion in 2025, and CXMT, a key DRAM maker, sources an estimated 40% to 50% of its tools domestically, potentially overtaking Micron in physical wafer capacity by 2030. While five initial DUV systems are too few to impact 2026 earnings, the longer-term risk is that China's domestic equipment ecosystem reduces Applied Materials' addressable market over several years.
BofA flags eight chip stocks as enhanced buying opportunities
Bank of America told clients that the risk/reward in semiconductors is positive despite near-term pressure, flagging eight names as enhanced buying opportunities. Analyst Vivek Arya pointed to Nvidia, Marvell, Micron, Lam Research, AMD, Intel, Analog Devices and ON Semiconductor. He said demand remains solid, but three headwinds could cap the group near term: macro factors including rising rates, data-center backlash and geopolitics; circular financing at the micro level; and heavy positioning, with chips 13% overweight versus the S&P 500 per BofA's holdings report. BofA sees roughly 10% further downside risk to the SOX index, which would return it to its pre-ChatGPT valuation discount to the broader market, though BofA called that unjustified on fundamentals. Arya cited bullish fourth- and first-quarter seasonality and a 20 times forward multiple against a 70% earnings CAGR through 2028. On Nvidia, Arya stated that another beat-and-raise is expected but may not be enough, with the core worry being that its open-ended funding of customers and suppliers is diluting earnings quality. The bank sees an opportunity for Nvidia to follow Apple's post-2012 playbook by lifting cash returns from around 50% of free cash flow to 75% or more. BofA named Lam Research and Micron its favorite long-term picks-and-shovels investments.
TOWA Reports Higher Revenue and Return to Profit for April-June Quarter, but Shares Fall Despite Strong Results
Semiconductor manufacturing equipment maker TOWA announced results for the first quarter of the fiscal year ending March 2027, with revenue up 100.3 percent year on year to 16.183 billion yen, operating profit of 2.212 billion yen marking a return to the black, and orders of 21.811 billion yen, a record high on a quarterly basis. Benefiting from expanding capital investment in semiconductors for AI and data centers, its mainstay semiconductor manufacturing equipment business accounted for 93.5 percent of revenue, with strong demand for molding equipment in the memory segment. However, the company kept its full-year forecast for ordinary profit at 10.24 billion yen, a conservative level about 22 percent below the market consensus of 12.525 billion yen, and profit-taking after a roughly 71 percent rise from the year-to-date low weighed on the stock. On the next trading day after the earnings announcement, the share price plunged 11.47 percent from the previous day to 2,532 yen.
Naura Technology first-half net profit attributable to parent at 3.37 billion yuan, up 5.1% year on year
Naura Technology released its 2026 half-year report. First-half operating revenue was 20.161 billion yuan, up 24.9% year on year, and net profit attributable to the parent was 3.37 billion yuan, up 5.1% year on year. Second-quarter operating revenue was 9.84 billion yuan, up 24.0% year on year, and net profit attributable to the parent was 1.74 billion yuan, up 6.6% year on year. The company said that in its semiconductor equipment business, the market share of equipment such as etching and thin-film deposition continued to rise, and it is actively advancing business integration with its controlling subsidiary Kingsemi.
Lam Research Sees Strong Growth Extend Into 2027 as AI Spending Accelerates
Guinness Global Innovators Fund highlighted Lam Research Corporation as a top performer in its second-quarter 2026 investor letter, with the stock gaining 103.0% in USD during the quarter. The fund noted that Lam, which specializes in etch and deposition, has been supported by accelerating DRAM and high-bandwidth memory demand, resilient China revenues, and faster-than-expected growth in its high-margin services business. Management has repeatedly raised its outlook for global wafer fabrication equipment spending, framing the current cycle as supply-constrained rather than demand-constrained, and extended its elevated growth outlook into 2026 and 2027. Lam Research closed at $314.00 per share on August 21, 2026, with a market capitalization of $383.62 billion and a 52-week gain of 210.03%.
Lam Research to Invest Over $3 Billion in R&D Expansion
Lam Research announced plans to invest more than US$3 billion over five years to expand its global research and development lab network and increase experiment capacity. The announcement follows a strong run for the stock, with a year-to-date share price return of 69.67% and a one-year total shareholder return of 211.75%, though the seven-day return declined 8.68% and the 90-day return fell 2.69%. Based on the most followed narrative, Lam Research's fair value of $323.38 sits slightly above the recent $314 close, framing the new R&D spending as part of a longer-term earnings story. However, a discounted cash flow model from Simply Wall St estimates fair value at $169.91, well below the recent price.
Applied Materials Beats Estimates but Shares Fall as Lam Research Rises
Applied Materials reported fiscal third-quarter results that beat Wall Street estimates on revenue and adjusted profit, yet its shares fell nearly 5% in after-hours trading and kept sliding into August 14, 2026, while rival Lam Research saw its stock rise 6% after its own stronger-than-expected results on July 29, 2026. Applied Materials posted adjusted earnings of $3.50 a share versus the $3.40 expected and revenue up 25% year over year to $9.12 billion, topping the roughly $9 billion forecast, and guided fourth-quarter revenue to about $10.25 billion, above the $9.55 billion analysts expected. Investors punished the stock because they wanted clearer proof the company is outpacing rivals rather than falling behind them, with Summit Insights Group noting Applied's topline has lagged peers including ASML and Lam Research, and Morgan Stanley calling the quarter good but not great. Lam Research forecast first-quarter revenue of $8.10 billion, well above the $7.09 billion expected, and adjusted earnings of $2.15 a share versus the $1.83 Wall Street expected, and its prior quarter also beat with revenue of $6.72 billion and adjusted earnings of $1.82 a share. Applied Materials trades at 32.14 times forward earnings, a discount to Lam's 34.59 times, KLA's 36.85 times, and ASML's 33.39 times, and a $220 million unrealized investment loss dragged GAAP earnings per share below estimates even as the adjusted figure beat.
Tuojing Technology's first-half net profit surges 1,324% year on year; Lante Optics up 163.21%
Several companies on the STAR Market have disclosed their half-year results for 2026. Tuojing Technology's net profit surged 1,324% year on year to 1.343 billion yuan, while Lante Optics' net profit rose 163.21% to 272 million yuan. Tuojing Technology's operating revenue reached 2.913 billion yuan, up 49.06% year on year, driven by substantial growth in its advanced process product business, and it plans to pay a cash dividend of 3.5 yuan for every 10 shares. Lante Optics' operating revenue reached 1.012 billion yuan, up 75.5% year on year, with growth across its optical prism, lens, and wafer businesses. Pinming Technology's net profit was 1.8176 million yuan, down 94.18% year on year, while Jinpan Technology's net profit was 303 million yuan, up 14.23% year on year, and it plans to pay 2.2 yuan for every 10 shares. In addition, Alibaba CEO Wu Yongming said that investment in AI infrastructure has reached 190 billion yuan, and capital expenditure is expected to be recouped within three years.
Tuojing Technology's first-half net profit surges 1,324% year on year
Tuojing Technology released its 2026 semi-annual report. In the first half, it achieved operating revenue of 2.913 billion yuan, up 49.06% year on year, and net profit attributable to shareholders of the listed company of 1.343 billion yuan, up 1,324.1% year on year. The company said that with technological breakthroughs and large-scale mass production applications of thin-film deposition equipment such as PECVD, ALD, SACVD, HDPCVD, and FlowableCVD, as well as three-dimensional integration equipment, the core competitiveness of its products in advanced process fields has significantly improved and business scale has grown substantially. Fair value gains from the company's trading financial assets increased by about 960 million yuan compared with the same period last year. The company plans to distribute a cash dividend of 3.5 yuan per 10 shares, tax included, to all shareholders, with no conversion of capital reserve into share capital and no bonus shares.
Xinyichang's first-half net profit attributable to parent surges 1706.7% year on year
Xinyichang's first-half net profit attributable to the parent company surged 1706.7% year on year to 47.26 million yuan, mainly due to a low base in the same period last year. The company achieved first-half operating revenue of 547 million yuan, up 36.05% year on year, but net cash flow from operating activities was negative 84.65 million yuan, a year-on-year decrease of 1216.71%. Revenue from its semiconductor equipment business reached 219 million yuan, with its share rising to 40.22%. The company disclosed this segment's revenue separately for the first time, with customers including Huawei, JCET, Huatian Technology, Tongfu Microelectronics, Yangjie Technology and Infineon. Tuojing Technology's first-half net profit attributable to the parent company was 1.343 billion yuan, up 1324.1% year on year; Advanced Micro-Fabrication Equipment's net profit attributable to the parent company was 2.825 billion yuan, up 300.22% year on year.
AMEC posts interim net profit of 2.825 billion yuan, up 300.22% year on year
AMEC has released its 2026 interim report, with net profit attributable to the parent company of 2.825 billion yuan, an increase of 2.119 billion yuan from the same period last year, up 300.22% year on year. Total operating revenue was 6.691 billion yuan, up 34.89% year on year, marking a fifth consecutive year of growth. Net cash inflow from operating activities was 685 million yuan, up 237.39% year on year. The company's latest asset-liability ratio was 19.73%, gross margin was 39.74%, and diluted earnings per share was 4.33 yuan.
AMEC plans to invest 3.5 billion yuan in the second phase of its Lingang industrialization base
AMEC's wholly owned subsidiary AMEC Lingang plans to invest in the second phase of the AMEC Lingang industrialization base in the Lingang Special Area, with a total planned investment of 3.5 billion yuan, including 1.7 billion yuan in fixed asset investment. The project focuses on competitive products such as etching equipment, inspection and measurement equipment, and thin film deposition equipment. After reaching full production, it is expected to achieve annual sales revenue of 3 billion yuan.
HTECH ramps up AI production lines, raises revenue target for this year
HTECH announced it is raising its 2026 revenue target to 10 percent growth, up from 7 percent, after second-quarter profit rose 45.44 percent and its central warehouse business began generating income. The company is preparing to receive two new machines in October and November this year and plans to invest at least 100 million baht more to address insufficient production capacity. Meanwhile, its Central Warehouse joint venture with JJ Tools from South Korea has been operating since May 2026, with plans to expand sales overseas within this year.
Silvaco Partners with Dassault Systèmes on Semiconductor Digital Twin Workflows
Silvaco Group announced a partnership with Dassault Systèmes to develop interoperable digital twin workflows for semiconductor manufacturing. The collaboration will connect Silvaco's Victory Process feature-scale simulation with Dassault Systèmes' SIMULIA plasma and structural analysis tools, enabling multiscale studies of etch and deposition processes and transfer of structures into stress and deformation analyses. The companies aim to help manufacturers achieve first-time-right process development, accelerate yield ramps, and reduce costly fab experiments. Silvaco CEO Walden C. Rhines said the partnership combines Silvaco's process simulation expertise with SIMULIA's multiphysics leadership to advance digital twin adoption across the industry.
Disco reports 27.1% revenue growth and 42.2% operating profit growth in Q1 FY March 2027, maintains target price of 88,000 yen
Disco's first quarter of the fiscal year ending March 2027 saw revenue of 114.308 billion yen, up 27.1% year on year, and operating profit of 49.033 billion yen, up 42.2%, beating company forecasts. Shipments rose from 121.664 billion yen in the previous quarter to 135.906 billion yen, helped by demand for generative AI and advanced packaging. Rakuten Securities raised its earnings forecast for the fiscal year ending March 2028 and maintained its target price for the next six to twelve months at 88,000 yen.
China Micro Semicon's first-half 2026 net profit rises 98.48% year on year
China Micro Semicon released its 2026 interim report, achieving operating revenue of 726 million yuan, up 44.01% year on year, and net profit attributable to shareholders of the listed company of 172 million yuan, up 98.48% year on year. Second-quarter net profit was 120 million yuan, while first-quarter net profit was 51 million yuan, meaning second-quarter net profit rose 134% quarter on quarter.