KLAC Scales in Advanced Packaging: Is Growth Set to Increase Further?

KLA Corporation KLAC is scaling its advanced packaging business as demand rises for High-Bandwidth Memory (HBM) and advanced logic nodes to support AI workloads. KLAC’s inspection and metrology tools support 2.5D and 3D integration, which are critical for improving performance and yield in multi-die architectures.

To meet growing complexity, KLAC is expanding its packaging portfolio to address tighter tolerances, process variability and accelerated production ramps. Foundry and memory customers are deepening adoption across high-density nodes, reinforcing momentum in performance-centric packaging flows.

The advanced packaging business is included in the Semiconductor Process Control segment, which reported $2.74 billion in revenue for the third quarter of fiscal 2025, up 31% year over year. The figure beat the Zacks Consensus Estimate by 0.76%. Advanced packaging revenues are projected to surpass $850 million in 2025, driven by rising demand from both foundry and memory customers. 

As AI-centric architectures scale, KLAC’s tools are playing a central role in enabling next-generation packaging. With deep domain expertise and an expanding footprint, the company is well-positioned to capture share as advanced packaging becomes a key growth driver across the semiconductor industry.

KLA Faces Competitive Pressure

KLAC’s inspection and metrology leadership in advanced packaging is facing growing competition from Applied Materials AMAT and ASML Holdings ASML, both of which are scaling their roles in enabling complex integration across logic and memory devices.

Applied Materials is advancing its position with deposition, etch, and bonding solutions tailored for high-density packaging. AMAT’s investments in hybrid integration platforms and packaging-specific workflows support rising demand from AI-driven logic and HBM customers. These capabilities give Applied Materials an expanding footprint in advanced back-end processes.

ASML Holdings is gaining relevance through its EUV lithography systems, which are increasingly used in advanced patterning steps that support downstream packaging performance. As customers transition to tighter geometries and 3D structures, ASML Holding’s tools play a critical role in enabling pattern fidelity and placement precision, indirectly supporting the adoption of advanced packaging across leading fabs.

KLAC’s Share Price Performance, Valuation and Estimates

KLAC’s shares have appreciated 46.2% year to date, while the broader Zacks Computer & Technology sector has increased 5.7% and the Zacks Electronics - Miscellaneous Products industry has jumped 12.9%.

KLAC Performance

KLAC stock is trading at a premium, with a forward 12-month Price/Sales of 10.11X compared with the industry’s 3.2X. KLAC has a Value Score of C.

KLAC Valuation

The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings is pegged at $8.53 per share, up by a penny over the past 30 days, indicating 29.24% year-over-year growth.

KLA Corporation Price and Consensus

KLA Corporation price-consensus-chart | KLA Corporation Quote

The consensus mark for KLAC’s 2025 earnings is pegged at $32.46 per share, which is up by a penny over the past 30 days. The figure indicates a 36.73% increase year over year.

KLAC currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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