ASML Holding NV yesterday said that the continued chip supply chain crisis and a rise in costs could constrain earnings, after demand continued to rise for its cutting-edge machines.
Net sales forecast for the second quarter of this year fell short of analyst expectations after a decision to delay testing its machines to speed up deliveries once again hit earnings.
Europe’s largest semiconductor equipment maker said that it predicts sales of 5.1 billion euros (US$5.52 billion) to 5.3 billion euros for the second quarter compared with an estimate of 5.86 billion euros in a Bloomberg analyst survey.
In the second quarter, 800 million euros of net delayed revenue was excluded from the company’s guidance, chief financial officer Roger Dassen said.
“That is the result of the fact that we expect more fast shipments at the end of Q2 than we had at the end of Q1,” he said.
Dassen also cited the increase in labor, component, freight and energy prices.
“If I were to quantify that, I think all in all we might be looking this year about a 1 percent incremental impact on the gross margin,” he said.
Inflationary pressures are growing amid a rise in service fees to secure parts that are in short supply and very high demand, jump in freight costs on changing shipping corridors and fuel prices, and “very strong” competition in labor markets in Asia and Silicon Valley, Dassen said.
Despite the costs from the delays, ASML remained optimistic about demand.
“We continue to see that the demand for our systems is higher than our current production capacity,” CEO Peter Wennink said. “In light of the demand and our plans to increase capacity, we expect to revisit our scenarios for 2025 and growth opportunities beyond. We plan to communicate updates in the second half of the year.”
ASML has cornered the market for the latest advanced extreme ultraviolet (EUV) lithography equipment needed to make cutting-edge chips that are faster, cheaper and more efficient.
However, the company began skipping some final testing in its factories last year to speed up delivery. This meant customers get their machines more quickly, but ASML had to delay about 2 billion euros of sales that were expected to ship in the first quarter.
The Dutch company’s customers include Samsung Electronics Co and Taiwan Semiconductor Manufacturing Co (台積電), which have been investing heavily to keep up with rebounding demand as COVID-19 lockdowns ended. It competes with Japan’s Nikon Corp in deep ultraviolet machines used to produce more mature chips.
In the first quarter, ASML shipped nine of its newest EUV machines, which etch smaller circuits while increasing capacity and speed.
The company kept its guidance for 20 percent sales growth and a capacity for 55 EUV units this year, as it is doubling capacity in comparison to 2020 for EUV, Dassen said.
POTENTIAL SETBACK: Although Chinese chip designers and foundry firms already have US EDA software, they might be unable to update those programs under new US rules The US’ latest ban on advanced electronic design automation (EDA) software exports to China might hinder Chinese chip companies from accessing advanced semiconductor technology, as they attempt to upgrade to 3-nanometer processes in the next three to five years, market researcher TrendForce Corp (集邦科技) said yesterday. The US Department of Commerce’s Bureau of Industry and Security on Friday announced bans on EDA tools for gate-all-around field-effect transistors (GAAFET), a new-generation semiconductor technology that US chipmaker Intel Corp and Samsung Electronics Co from South Korea are adopting to make 4-nanometer and 3-nanometer chips. The bureau in a statement said that gate-all-around field-effect transistor
WIDENING THE FIELD: Human resources managers must drop prejudices regarding gender, appearance and age to find the best candidates, Micro Technology said The job market for Taiwan’s semiconductor industry remained tight this quarter, as hiring activity slowed from a record high last quarter, a survey released yesterday by online human resource firm 104 Job Bank (104人力銀行) showed. Ongoing labor shortages have prompted local semiconductor firms to recruit more women and foreigners in Taiwan and in Southeast Asia, the job bank said. The talent gap in the first quarter reached 35,000 people per month, a surge of 39.8 percent from the same period last year, as the contactless economy and digital transformation shore up demand for semiconductors, 104 Job Bank said in its annual report
POSITIVE CULTURE: Pursuing 12-inch wafers earlier than peers helped TSMC lead the industry, said a former executive, whose main regret was working for SMIC in China Corporate culture at Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is what made the chipmaker a leading player in the global industry, a former executive said in an interview with California’s Computer History Museum. “One of the really important reasons that TSMC succeeded” is the culture at the firm, where “if equipment went down at two o’clock in the morning, we just called an equipment engineer,” and the worker would not complain, said former TSMC joint chief operating officer Chiang Shan-yi (蔣尚義). “We didn’t really do anything special, anything great, but we didn’t make any major mistakes,” when compared with competitors, such
Cloud computing equipment company Wiwynn Corp (緯穎科技), which counts Meta Platforms Inc as one of its key customers, is boosting capacity expansion in Malaysia through a new investment of about NT$1.94 billion (US$64.7 million), it said yesterday in a statement filed with the Taiwan Stock Exchange. The investment, which aims to help the company with business development and strategic arrangements, would be made through subsidiary Wiwynn Technology Services Malaysia Sdn Bhd to build a new factory, Wiwynn said in the filing. The announcement came about one-and-a-half months after the company started phase II of its new server printed circuit board assembly (PCBA)