ASML Holding NV gave a bullish revenue outlook, citing strong demand for its machines that make advanced semiconductors and said it would buy back 12 billion euros (US$12.2 billion) of its own stock.
The Dutch chip production equipment supplier said growth in semiconductor markets and the need for more advanced production would drive demand for its products and services, resulting in annual revenue of as much as 40 billion euros by 2025. That compares with an average analyst estimate of 32 billion euros.
ASML’s confidence in longer-term growth comes amid a sharp downturn in demand for its customers’ products that is causing many of them to rein in their spending on new plants and equipment.
Photo: Reuters
The Dutch company said increasing competition in outsourced chipmaking and efforts in Europe and the US to nurture domestic production are contributing to the industry’s need to add more capacity.
ASML’s buyback program is to run through 2025, it said in a regulatory filing on Thursday.
The company will use about 2 million shares to cover employee plans and cancel the remainder.
ASML’s bullishness about the future is growing. Last year, it had predicted sales would be between 24 billion euros and 30 billion euros by 2025. That target is now 30 billion euros to 40 billion euros, it said in the filing.
By 2030, revenue would expand further to as much as 60 billion euros, it said.
“While the current macroenvironment creates near-term uncertainties, we expect longer-term demand and capacity showing healthy growth,” the company said.
In line with its projection of increasing demand, the company is raising output to 90 of its extreme ultraviolet lithography machines and 600 deep-ultraviolet machines by 2025 to 2026.
ASML’s gear performs the crucial function of burning patterns into materials deposited on wafers off silicon that make up the circuits that give chips their function.
Even though the global chip industry is now facing a severe downturn, countries including the US and Japan have not slowed their pace in readying new plants to prepare for the next boom cycle.
Taiwan Semiconductor Manufacturing Co (台積電) is even now considering adding another advanced facility next to a US$12 billion plant that is under construction in the US state of Arizona.
ASML has not been able to sell its most advanced extreme ultraviolet lithography machines to China, as the Dutch government refused to give it a license to do so, but it has been able to sell its other machinery to the country.
ASML sees the total impact from the new US measures to be about 5% of its backlog, it said on a call with investors last month.
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