KLA gains from packaging boom
KLA is seeing strong growth as AI demand drives advanced chip packaging, though competition and valuation concerns remain.
KLA is seeing strong growth as AI demand drives advanced chip packaging, though competition and valuation concerns remain.KLA Corporation is benefiting from rising demand for advanced semiconductor packaging as AI and high performance computing push chip complexity higher.
The company reported advanced packaging systems revenue of about $950 million in 2025, up more than 70 percent year on year. It expects further growth in 2026 in the mid to high teens, supported by demand for process control tools.
Across the industry, the wafer fabrication equipment market is forecast to reach the low $120 billion range in 2026. Advanced packaging is expected to account for around $12 billion, reflecting its growing role in chip production.
KLA faces competition from ASML and Applied Materials, both of which are also benefiting from AI driven demand.
Shares in KLA have risen about 26 percent this year, outperforming the broader technology sector. The company expects third quarter fiscal 2026 revenue of around $3.35 billion but flagged supply constraints and tariffs as near term pressures.
Analysts expect continued earnings growth, though some caution that the stock trades at a premium to the wider sector.
