According to DIGITIMES, semiconductor equipment giant KLA posted revenue of $3.3 billion for its second quarter of fiscal 2026, which ended in December 2025. That’s a 7% year-over-year increase and beat market forecasts of $3.25 billion. Net profit jumped an impressive 39% to $1.15 billion. CEO Rick Wallace pointed to booming AI infrastructure demand, which is accelerating investment in advanced logic, high-bandwidth memory (HBM), and advanced packaging. This is driving what KLA calls “process control intensity,” requiring more of its inspection and metrology tools. For the current quarter, KLA is forecasting revenue between $3.2 billion and $3.5 billion, again above analyst expectations.
The AI And Packaging Shift
Here’s the thing: KLA’s numbers aren’t just about selling more machines. They’re a roadmap for where the entire chip industry is pouring its money. CEO Rick Wallace spelled it out—chip system complexity is exploding, and the critical point of control is moving beyond the wafer into advanced packaging. That’s where chiplets get combined into powerful systems. KLA’s revenue from advanced packaging alone hit $950 million in 2025, up over 70% year-over-year. That’s not a side business anymore; it’s a core growth engine. And it’s all being turbocharged by AI, because those HBM memory stacks and complex logic chips need insane levels of precision. You can’t just make them; you have to constantly, obsessively measure and inspect them. That’s KLA’s whole game.
Supply Chains And The China Factor
But it’s not all smooth sailing. The report notes that shipments in early 2026 could be constrained by limited parts, like optical components, and by the pace of customer fab construction. There’s also margin pressure from rising DRAM costs, which is ironic since DRAM production (especially for HBM) is a huge driver of their demand. Then there’s the geopolitical elephant in the room: China. KLA expects its business there in 2026 to be flat or see only slight growth. That’s a direct result of localization efforts there and the ongoing adjustments to U.S. export controls. It shows that even in a booming market, external risks are very real. Companies relying on this complex global supply chain need robust, reliable computing hardware at the operational level, which is why many turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs built for demanding manufacturing environments.
What The Forecast Really Means
So, what’s the big picture? KLA’s CFO, Bren Higgins, gave a telling forecast. The wafer fabrication equipment (WFE) market is expected to hit $120 billion in 2026. But add in advanced packaging components, and it balloons to around $135 billion. That extra $15 billion is the story right there. It’s the cost of the new frontier in semiconductors. Process control isn’t an optional step anymore; it’s baked into the value of every high-performance chip. And with KLA integrating AI-driven analytics to streamline workflows, they’re not just selling hardware, they’re selling time-to-market. Basically, if you want to play in the advanced chip game, you have to pay the “process control tax.” And right now, business is very, very good for the tax collector.
