KLA Exits Display Business

KLA has decided to exit its flat panel display (FPD) business, which is part of its PCB, Display and Component Inspection reporting on its financials, by December 31, 2024. The FPD business accounted for only 1.4% of KLA’s total revenue in 2023.

Source: KLA

The decision was based on factors including the cancellation of a significant new technology project by a major customer. KLA had previously disclosed it was investigating alternatives for its FPD business.

The exit decision does not affect KLA’s revenue expectations for Q1 2024. The company reaffirms its revenue guidance of $2.3 billion +/- $125 million for the quarter.

However, KLA expects to incur $60-70 million in non-cash expenses to write off inventory and $50-70 million for impairment of goodwill and intangibles related to the discontinued FPD product lines in Q1 2024.

Longer-term, exiting the FPD business is expected to have an immaterially favorable impact on KLA’s profitability margins.