Applied Materials Forecast Disappears on Supply Chain Issues, Auto News, ET Auto

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The forecast caused the stock to drop almost 6.7% in extended trading.

Applied Materials Inc forecast first quarter sales and earnings on Thursday below market estimates as chip shortages slowed the supply chain of the world’s largest maker of tools for making chips.

The forecast caused the stock to drop almost 6.7% in extended trading.

Applied the machines used to manufacture semiconductor and other High-tech components, expects net revenue of $ 6.16 billion for the current quarter, plus or minus $ 250 million, compared to analyst estimates of $ 6.50 billion, according to data from Refinitiv IBES.

Speaking on a conference call with investors, Chief Executive Gary Dickerson said that demand remained strong and that Applied’s fourth quarter revenue would have been $ 300 million higher without supply restrictions, which he believes will last through the company’s 2022 fiscal year.

“Factory capacity is not a limiting factor for us. Like many in the industry, the biggest challenge we face today is the availability of certain silicon components,” said Dickerson.

Chip makers are stepping up performance and buying new tools as the world migrates to 5G and consumers upgrade their phones, laptops, and game consoles. The wider shift to remote working and learning during the pandemic has also increased the demand for chips.

Applied, which counts top chipmakers like Intel Corp and Taiwan Semiconductor Manufacturing Co Ltd, also forecasts adjusted earnings between $ 1.78 and $ 1.92 per share, compared to estimates of $ 2.01 per share .

In the fourth quarter, the company’s revenue rose 31% to $ 6.12 billion, down from an estimate of $ 6.35 billion. On an adjusted basis, the company made $ 1.94 per share, according to refinitive data, a cent below expectations.

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The plan followed an announcement by Taiwan Semiconductor Manufacturing Co (TSMC) last week that it was planning to build a $ 7 billion chip factory in Japan with Sony Group, a move welcomed by the Japanese government.


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