(Reuters) -Applied Materials, a semiconductor manufacturing equipment supplier, projected stronger-than-expected first-quarter revenue on Thursday, suggesting that demand for tools used in AI chip production may offset weakness in some parts of the industry.

The growing need for advanced memory chips used in artificial intelligence applications is driving increased investment in fabrication equipment and fueling orders for Applied Materials’ tools

“Based on our conversations with our customers and partners, we are preparing Applied’ s operations and service organizations to be ready to support higher demand beginning in the second half of calendar 2026,” said Brice Hill, chief financial officer, at Applied Materials.

The company forecast current-quarter revenue of $6.85 billion, plus or

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