(Reuters) – Applied Materials (NASDAQ) has forecast revenue for the third quarter below its expectations. This is due to supply shortages that were exacerbated in China by lockdowns. It would be difficult for it to fulfill demand.

Extended trading saw shares fall 5.1%, to $105.10 for the maker of chip tools.

There is a semiconductor shortage and a parts shortage in the production of chips, which has increased demand for chipmakers’ products.

Gary Dickerson, chief executive officer of Applied Materials, stated: “Demand for Applied Materials products and services have never been stronger but we still remain constrained due to on-going supply chains issues.”

Taiwan Semiconductor Manufacturing Co was the largest contract chipmaker in the world. It warned last month that tool suppliers faced labour, component, and chip shortages. This is increasing delivery times for older technology.

Applied Materials projects current quarter revenue at $6.25 Billion, with an additional $400 Million. According to IBES data from Refinitiv, analysts expect $6.73 trillion in revenue on an average.

Below estimates of $6.38 trillion, the company reported that revenue rose by 12% to $6.25Billion for its second quarter ending May 1.