[News] Applied Sees >30% Equipment Growth, >50% Packaging Surge in 2026; China Remains Top Market in 2Q

Riding sustained AI-driven demand across both logic and memory, Applied Materials has struck a more bullish tone for 2026, projecting over 30% growth in its semiconductor equipment business and more than 50% growth in packaging revenue, according to Reuters.

The outlook marks a notable upgrade from the company’s February earnings call, when Bloomberg reported that Applied had guided for semiconductor equipment business growth of more than 20% for the calendar year.

Notably, Reuters reports that surging AI infrastructure spending from hyperscalers is prompting chipmakers such as TSMC and Samsung Electronics to expand capacity, further boosting demand for Applied Materials’ chipmaking and packaging tools. This demand shift is reflected in its latest revenue mix, with Taiwan accounting for 27% of sales in 2QFY26 and South Korea 20%, according to a company press release.

According to a Yahoo! Finance earnings transcript, the company also emphasized its strong position in memory, as CEO Gary Dickerson said Applied holds a leading position in memory equipment, underpinned by strength in DRAM wiring, patterning, and peripheral logic steps.

Applied Materials forecasts third-quarter revenue of about $8.95 billion, plus or minus $500 million, topping analysts’ average estimate of $8.09 billion, Reuters reports. Meanwhile, it projects adjusted earnings of $3.36 per share, plus or minus 20 cents, comfortably ahead of analysts’ average estimate of $2.88, the report adds.

For its fiscal second quarter ended April 26, Applied Materials posted revenue of $7.91 billion, with adjusted earnings came in at $2.86 per share.

China Outlook in Focus

Meanwhile, the outlook for Applied Materials in China is coming under increased scrutiny as the proposed MATCH Act gains traction in the U.S. Congress. According to The Next Web, the legislation targets China’s advanced semiconductor ecosystem by designating firms including SMIC, Huawei, Hua Hong, and the country’s leading memory makers as “covered facilities.” The bill, as per the report, would ban exports of deep ultraviolet (DUV) immersion lithography equipment—still supplied to China by ASML—and restrict allied firms from servicing installed tools, potentially eroding China’s existing fab capacity over time due to the maintenance intensity of DUV systems.

Despite the policy headwinds, China remained one of Applied Materials’ largest market, accounting for 27% of its 2QFY26 sales. CFO Brice Hill said in the Yahoo! Finance earnings call transcript that the company expects both its China business and global ICAPS segment to be flat to slightly higher over the calendar year.

According to CEO Gary Dickerson, all related risks have already been factored into the company’s quarterly guidance and its outlook for the calendar year.

The company expects about a $710 million revenue impact from U.S. export restrictions published by the Bureau of Industry and Security, as reported by The Wall Street Journal in October 2025, following the Commerce Department’s expansion of the Entity List rule to automatically cover subsidiaries that are 50% or more owned by listed companies.

Read more

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• [News] Applied Materials Teams Up with Micron, SK hynix for Next-Gen DRAM, HBM and NAND Development

(Photo credit: Applied Materials)