KLA-Tencor (KLAC) shares tumbled 5.92% in after-hours trading on Wednesday, despite the company forecasting upbeat second-quarter revenue. The semiconductor equipment maker's stock decline comes amid growing concerns over its China business and the impact of ongoing U.S.-China trade tensions.

In its quarterly report, KLA-Tencor projected second-quarter sales of about $3.23 billion, surpassing analysts' average estimate of $3.18 billion. The company also reported strong first-quarter results, with revenue of $3.21 billion and non-GAAP earnings of $8.81 per share, both exceeding Wall Street expectations. However, these positive figures were overshadowed by warnings about the company's future performance in China.

KLA-Tencor expects U.S. trade tensions with China to significantly impact its sales, estimating a hit of $300 million to $350 million over the next five quarters. The company cited "additional market access loss related to certain customers in China resulting from extended export controls from the U.S. government" as a key factor. This outlook has raised investor concerns, particularly as sales to China accounted for 39% of KLA-Tencor's total third-quarter revenue. The semiconductor industry continues to grapple with the challenges posed by escalating trade restrictions between the United States and China, potentially affecting the growth prospects of companies heavily reliant on the Chinese market.