Shares of KLA Corporation edged higher Friday, closing up 0.92% at $1,464.13, as the semiconductor equipment firm unveiled a significant long-term investment in India. The company has entered into an agreement with the state of Tamil Nadu to establish a major research and development campus in Chennai.
Strategic Investment in AI and Semiconductors
KLA plans to invest approximately $400 million over the next ten years into the new facility, which will span 12 acres with potential for expansion. The campus is designed to become KLA's largest integrated R&D hub outside its global headquarters and is projected to generate up to 4,000 high-skilled engineering positions.
The center will focus on advanced semiconductor technologies, including artificial intelligence-driven process control tools, high-performance computing, and engineering software. Process control is critical for chipmakers, involving inspection and monitoring equipment that helps identify manufacturing defects early to improve production yields.
Broader Sector Momentum
The announcement comes amid positive sentiment for chip equipment stocks. Peer company Applied Materials recently issued a stronger-than-expected sales forecast, citing robust AI-related demand and tightening memory supply. This optimism lifted other sector names, including KLA and Lam Research, in recent sessions.
Analysts point to a significant wafer fabrication equipment growth cycle anticipated over the next three years, driven by heavy spending on AI infrastructure and demand for high-bandwidth memory essential for AI processors.
Despite the recent gain, KLA shares remain about 12.6% below their 52-week high of $1,693.35, set in late January. The India investment is viewed as a strategic, long-term play rather than an immediate revenue driver. Investor focus now shifts to whether chipmakers will sustain their capital expenditure on equipment, supporting the current bullish narrative for the sector.
Traders will also note the upcoming quarterly cash dividend of $1.90 per share, with a record date of February 17 and payment scheduled for March 3. Market activity resumes Tuesday following the Presidents Day holiday.
