(Reuters) -U.S.-based Applied Materials ( AMAT ), a maker of semiconductor manufacturing equipment, forecast upbeat first-quarter revenue on Thursday, signaling that robust demand for tools used to make AI chips is set to overpower a broader industry slowdown.

The surge in AI-driven demand for advanced memory chips is spurring heavy investment in new fabrication equipment, boosting orders for Applied Materials' ( AMAT ) manufacturing tools.

The company forecast current-quarter revenue of $6.85 billion, plus or minus $500 million. Analysts on average expect revenue of $6.76 billion, according to data compiled by LSEG.

Shares slipped 1.5% in extended trading.

As chipmakers expand capacity to produce high-bandwidth memory and next-generation semiconductors, the company stands to benefit from a substantial increase in capital spending across the industry.Its advanced equipment remains in demand at customers including Taiwan Semiconductor Manufacturing Co and Samsung, which use the tools to produce high-performance chips that power data centers and AI applications.

The company reported revenue of $6.8 billion for the quarter ended October, compared with analysts' average estimate of $6.67 billion, according to data compiled by LSEG.