[News] Applied Materials Lifts 2026 Packaging Growth Above 70%; DRAM Set to Accelerate, China Remains Key Market

U.S. semiconductor equipment giant Applied Materials posted record earnings for the third quarter of fiscal 2026 and raised its growth outlook on robust demand. Reuters reports that advanced packaging is emerging as a key growth driver, with sales expected to jump more than 70% in 2026, up from its previous forecast of over 50%. DRAM revenue is also set to accelerate in the second half of the year as memory makers ramp up spending, Reuters adds.

Beyond these individual business segments, Applied Materials also raised its outlook across key operations, with semiconductor systems revenue now expected to grow more than 30% in 2026, up sharply from its previous forecast of over 20%, Reuters notes.

Investing.com, on the other hand, suggests that the company also sees Applied Global Services to grow by more than 20%, while revenue from process diagnostics and control is expected to surge over 50%.

As a key supplier of semiconductor manufacturing equipment, including tools for physical vapor deposition and ion implantation, Applied Materials is riding stronger chipmaker spending as AI infrastructure expands. The momentum is reflected in its financial outlook: fourth-quarter revenue is expected at roughly $10.25 billion, plus or minus $500 million, well above the $9.54 billion LSEG consensus, Reuters reports.

For the third quarter ended July 26, revenue reached $9.12 billion, topping the $8.99 billion analyst estimate. CEO Gary Dickerson called it another record quarter for Applied, including the strongest sequential revenue growth in the company’s history, according to a company press release.

China Remains Key Market Despite U.S. Curbs

Notably, despite tighter U.S. restrictions, China remains Applied Materials’ largest market, with its sales mix showing signs of stabilization. China accounted for 28% of total sales in 3QFY26, down from 35% a year earlier but little changed from 27% in the previous quarter.

Meanwhile, Taiwan ranked second at 22% of total sales in 3QFY26, followed by Korea at 17% and the U.S. at 15%.

Beyond geopolitical risks, Investing.com points to several near-term challenges, including margin pressure as management kept its gross margin outlook flat. Capacity constraints at customers, particularly limited clean room availability, could delay shipments, while aggressive hiring and manufacturing expansion may add to operating costs before revenue catches up, the report notes.

Read more

• [News] NVIDIA Rubin Ultra and Feynman Reportedly to Boost TSMC SoIC; Besi, Applied Materials, TEL to Benefit
• [News] ASML Raises 2026 Guidance for Second Time This Year; Taiwan Sales Share Climbs to 30%

(Photo credit: Applied Materials)