ASML Holding NV halved its sales growth guidance for this year as a decision to ship deliveries before quality checks are completed meant it had to delay booking some revenue.
Expected sales growth for this year was cut to about 10 percent from approximately 20 percent, Europe’s largest semiconductor equipment maker said yesterday.
The company’s sales forecast for the third quarter of the year fell short of analysts’ expectations.
Photo: REUTERS
ASML yesterday predicted sales of 5.1 billion euros to 5.4 billion euros (US$5.22 billion to US$5.53 billion) for the third quarter compared with an estimate of 6.48 billion euros in a Bloomberg analyst survey.
The firm last year began skipping some final testing in its factories to speed up delivery. This meant clients got their machines earlier, but ASML had to delay sales recognition for those shipments until formal customer acceptance.
The value of fast shipments leading to delayed revenue recognition is expected to increase to 2.8 billion euros from a previous forecast of about 1 billion euros, the company said.
“What we saw in the second quarter, which is basically an acceleration of supply chain constraints, is actually also happening in the third quarter,” ASML CEO Peter Wennink said in a statement. “I think it will happen throughout the remainder of the year.”
ASML shares have been under additional pressure since the US started pushing the Netherlands to ban the company from selling some deep ultraviolet (DUV) lithography systems to China. Washington is focused on banning sales of the most advanced type of DUV technology, immersion lithography machines, Bloomberg reported earlier this month, citing people familiar with the matter.
The Dutch government, which confirmed that US officials are seeking to expand an existing moratorium on the sale of such systems to China, has yet to agree to any additional restrictions.
ASML opposes the proposed ban because DUV lithography equipment is already a mature technology, Wennink said earlier this year.
“The geopolitical situation, the technological sovereignty that countries are after is driving” big investment and subsidy programs, he said in a separate statement yesterday.
He said that ASML expects a “quadrupling or quintupling” of the semiconductor content in the longer term despite “mixed signals” in the short term.
ASML has cornered the market for the latest advanced extreme ultraviolet lithography equipment needed to make cutting-edge chips that are faster, cheaper and more efficient.
“The demand is still significantly higher than what we can make,” Wennink said. “This was the situation in the last quarter. It’s still the same. We don’t see any demand reduction.”
Wennink said despite “very strong” demand, the company sees a slowdown particularly in products such as PCs and smartphones.
The Dutch company’s customers include Taiwan Semiconductor Manufacturing Co (台積電) and Samsung Electronics Co, which have been investing heavily to keep up with rebounding demand as COVID-19 lockdowns ended.
It competes with Japan’s Nikon Corp in DUV machines used to produce more mature chips.
In the second quarter, ASML sold a total of 91 lithography machines.
This year, it is planning to ship 55 extreme ultraviolet devices, which etch smaller circuits while increasing capacity and speed, but it would only book revenue for 40 systems because of the sales recognition delay, it said.
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