Applied Materials expects fourth-quarter revenue of $10.25 billion, plus or minus $500 million, and projects packaging revenue will grow more than 50% in calendar 2026, according to the company's third-quarter earnings announcement.
Packaging represents the segment most exposed to advanced chip assembly and heterogeneous integration, two technologies central to AI chip production. Applied Materials manufactures deposition, etch, and metrology systems used in semiconductor fabrication and packaging lines. A 50% plus growth rate in that segment tracks with sustained demand from chipmakers investing in packaging infrastructure to match gains in logic and memory processing capacity.
The $10.25 billion guidance sits at the midpoint of the company's range and reflects demand across multiple end markets. Applied Materials serves logic chipmakers, memory producers, and foundries. The packaging projection covers calendar 2026, meaning it spans the company's fiscal fourth quarter of 2026 through three quarters of fiscal 2027.
Packaging technology has accelerated as chipmakers move toward chiplets and multi-die architectures. Advanced packaging allows smaller dies to be integrated into single packages, lowering costs and improving performance compared to monolithic designs. Nvidia, Advanced Micro Devices, and other fabless designers have emphasized chiplet strategies; foundries including Taiwan Semiconductor Manufacturing Company and Samsung have invested in packaging capacity to support those roadmaps.
Applied Materials supplies equipment used in both front-end semiconductor manufacturing and back-end packaging processes. The company competes with ASML, Lam Research, and Tokyo Electron in various process steps. Chipmakers are allocating capital to packaging at rates exceeding their overall capex growth.
The guidance projects Applied Materials' fourth-quarter revenue at roughly triple the company's mid-point annual revenue from 2020, when the semiconductor equipment industry was much smaller. Applied Materials' size and the magnitude of its packaging projection reflect the current scale of AI-driven capex cycles in semiconductor manufacturing.
The number that decides whether this guidance holds is whether Applied Materials reports actual Q4 FY2026 and full-year 2026 packaging revenue within the range it disclosed; any material miss would point to either softening demand or supply constraints in the packaging supply chain.
