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[News] Chip Equipment Giant KLA Predicts 20% Drop in China Sales for 2025 Amid New U.S. Export Curbs
As a new round of U.S. export crackdown on China’s semiconductor industry kicked off last week, global semiconductor giants have been evaluating the impact. Among them, U.S. chip equipment maker KLA may be the first company to go into detail, noting that the curbs would have roughly a USD 500 million incremental impact to the company’s 2025 revenue.
According to the information KLA revealed on the website, CFO Bren Higgins, when spoke at the UBS Global Technology and AI Conference, noted that of the estimated USD 500 million impact, 70% could be attributed to system-related revenue, while the other 30% pertains to service-related sales.
Notably, Higgins also noted that under the current scenario, KLA’s revenue in China is projected to decline by about 20% year-over-year in 2025. Moreover, China is expected to account for high 20% of its total sales in 2025, down from roughly 40% in 2024, he added.
However, KLA remains optimistic about its 2025 outlook. According to Higgins, new investments in advanced nodes led by 2nm, leading-edge memory, as well as the expansion of advanced packaging driven by high performance compute would further boost the company’s growth.
KLA reported first-quarter revenue (ending September 30th) of USD 2.84 billion, with adjusted earnings of USD 7.33 per share.
According to a previous Reuters report, it projects the momentum to continue in the current quarter, forecasting revenue to be in a range of USD 2.95 billion plus or minus USD 150 million. The company expects adjusted profit per share between USD 7.75 plus or minus 60 cents in the second quarter, the report noted.
It is worth noting that Dutch semiconductor equipment giant ASML does not expect any direct material impact from the sanction in 2024. For 2025, the Dutch tech giant expects the impact will fall within what was communicated earlier in October.
ASML expects 2025 total net sales to fall between €30 billion and €35 billion (roughly USD 31.5-36.7 billion), with its China business dropping to 20% of its total net sales. In the third quarter, 2024, China contributed 47% of its total sales, according to its statement.
Another major chipmaking equipment giant LAM Research states that at this time, it has no plans to update the financial guidance.
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(Photo credit: KLA)
