Applied Materials: China Revenue to Grow in 2026

According to Applied Materials, the company reported record quarterly revenue and raised its 2026 revenue outlook on August 14, supported by strong semiconductor demand driven by the rapid expansion of artificial intelligence infrastructure.

For the three months ended July 26, Applied Materials generated record revenue of $9.12 billion, up 25% year over year. Revenue from China reached $2.5 billion, accounting for 28% of total sales and making China the company’s largest market. However, China revenue declined from $2.6 billion a year earlier amid tighter U.S. restrictions on exports of advanced semiconductor manufacturing equipment.

Despite the export restrictions, Applied Materials Chief Financial Officer Brice Hill said during the earnings call that the company still expects revenue from China to increase in 2026. The growth is expected to be driven largely by investment in 28nm foundry logic, where Applied Materials has strong technological differentiation and market share.

Hill also expects growth in the Chinese market to continue into 2027, particularly across Internet of Things (IoT), communications, automotive, power and sensor applications.

Meanwhile, Applied Materials expects revenue for the August-to-October quarter to reach approximately $10.25 billion, with a range of plus or minus $500 million. The forecast reflects accelerating demand for semiconductor technologies supporting AI chips and infrastructure.

Although Applied Materials did not provide a specific full-year revenue forecast, the company said it has raised its expectations for 2026.

“With the rapid adoption of AI worldwide, demand for our materials engineering solutions is stronger than ever,” CEO Gary Dickerson said. He added that the company has further increased its 2026 revenue expectations for its Semiconductor Systems business and expects growth to exceed the broader market.

Based on increasingly visible demand trends from customers, Dickerson also expects 2027 to be another strong growth year for Applied Materials as investment in AI infrastructure and advanced semiconductor manufacturing continues.