Applied Materials, Inc. (AMAT) in Santa Clara, Calif., provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems; Applied Global Services; and Display and Adjacent Markets. In comparison, KLA Corporation (KLAC) in Milpitas, Calif., designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nanoelectronics industries worldwide.
Semiconductor companies have been thriving as chip demand has increased tremendously with the world trying to stay afloat remotely and the government taking measures to increase the use of EVs. While the need is rising, the shortage of semiconductors, which has been exacerbated by rising COVID-19 cases in China and the Russia-Ukraine war is driving soaring prices. The industry is also witnessing increasing domestic and international investments to ramp up production. And with the increasing use of IoT, 5G, and AI, the demand for semiconductors should keep growing. Indeed, according to BlueWeave consulting, the global semiconductor market is estimated to grow at a 5.2% CAGR between 2022 -2028. Therefore, both AMAT and KLAC should benefit.
