Semiconductor equipment maker Applied Materials has reported revenue of $6.52 billion (+5 percent), gross margin of 46.1 percent and operating income of $1.92 billion for its third quarter ended July 31, 2022.

US-based Applied Materials has achieved record revenue, thanks to a flurry of orders from chipmakers building capacity in a bid to ease a widespread supply crunch.

Applied Materials CEO Gary Dickerson allayed the concerns, saying Applied Materials can overcome the dour economic outlook and that he remains positive about the prospects of the sector.

Applied Materials said revenue is expected to be $6.65 billion, plus or minus $400 million, in the current quarter.

Applied Materials said it generated revenue of $4.734 billion from Semiconductor Systems, $1.420 billion from Applied Global Services, $333 million from Display and Adjacent Markets.

Within Semiconductor Systems business, 66 percent of the revenue came from Foundry, logic and other, 19 percent from Flash memory and 15 percent from DRAM business.

Demand has been weakening from memory-chip makers who had hoarded supplies over the quarters to meet a strong demand and are now facing a sales drop. Semiconductor equipment supply will catch up with orders and then (orders will) weaken as capital spending must match up to end demand, said Summit Insights Group analyst Kinngai Chan.

Applied Materials has been struggling to source components essential to its equipment due to supply chain bottlenecks that have been worsened by COVID-19 flare-ups in China.

That has forced the company to spend more on logistics, driving up expenses. Quarterly gross margin fell to 46 percent from 47.9 percent, pushing the profit down by 6 percent.

“We expect Applied to remain supply-constrained for the next several quarters,” said CEO Dickerson.

Chipmakers Intel and Micron Technology have recently warned of an inventory build-up and declining spending on electronics, sparking worries that the industry’s years-long growth run was at an end.