Semiconductor Equipment Giant Reveals Secrets to Profitability in BofA Securities Conference: Industry Insights Unveiled by KLA Corporation CFO

San Jose, California – KLA Corporation recently participated in the BofA Securities 2024 Global Technology Conference, where Bren Higgins, the Executive Vice President and CFO of KLA, shared insights into the company’s strategies for future growth. During the conference, discussions revolved around the company’s plans for achieving 9% to 11% topline growth by 2022, aiming for $14 billion in sales and $38 in earnings. Higgins shed light on the challenges faced by the semiconductor industry due to supply chain disruptions and customer corrections, emphasizing KLA’s resilience in navigating these difficulties.

Looking ahead, KLA anticipates a growth in semiconductor revenue, driven by increasing capital intensity and rising demand for semiconductor products. The company projects a continuation of the trend towards higher capital intensity in the industry, particularly in the logic/foundry sector. With a focus on process control, KLA aims to leverage its position in the market to address the needs of leading-edge logic/foundry customers, where process control intensity is a critical factor.

One of the key areas of growth for KLA is in its service business, which is expected to see a 12% to 14% growth through cycle. Higgins highlighted the factors contributing to the growth of the service business, including the extend life of systems in the field servicing various markets like automotive, industrial, and communication. With a strong focus on customer support and service contracts, KLA remains confident in the steady growth of its service revenue stream over time.

In discussing the outlook for wafer fab equipment demand in the second half of the year, Higgins emphasized the potential for mid to high single-digit growth rates in the semiconductor and WFE market. With a focus on leading-edge investments and advancements in transistor architecture, KLA is preparing for growth opportunities in the coming years, particularly in areas like advanced packaging.

When it comes to advanced packaging, KLA plays a significant role in providing process control solutions for various stages of packaging, including plasma dicing, barrier seed layers, and RDL and TSV reveal steps. The company expects continued growth in this segment, driven by the increasing complexity and density of semiconductor devices. As the industry evolves, KLA remains committed to innovating and delivering products that meet the changing needs of its customers.

Looking forward to 2025, KLA is confident in its ability to meet the growing demand for its products, with lead times of around nine months for its tools. The company anticipates strong foundry/logic and memory dynamics in the coming year, setting the stage for continued growth and success in the semiconductor industry. As KLA positions itself for future opportunities and challenges, its focus remains on driving innovation, efficiency, and profitability across its product and service offerings.