ASML Holding NV yesterday forecast better-than-expected second-quarter sales amid strong demand for its chipmaking machines, even as some of its clients are grappling with a slump in the semiconductor industry.
Revenue would rise to 6.5 billion to 7 billion euros (US$7.1 billion to US$7.7 billion) this quarter, the Dutch company said in a statement.
That compared with analysts’ average estimate of 6.42 billion euros.
Photo: Reuters
Europe’s most valuable technology company also said that total demand continues to outstrip capacity for its exclusive machinery this year.
The firm’s first-quarter net sales of 6.7 billion euros and gross margin of 50.6 percent were both above its guidance due to higher-than-anticipated income from advanced extreme ultraviolet and deep ultraviolet lithography machines, ASML chief executive officer Peter Wennink said in the statement.
Chipmakers are installing and adopting its hardware at a rapid clip, even while they are adjusting to slowing orders and inventory buildup from a market slowdown.
“We continue to see mixed signals on demand from the different end-market segments as the industry works to bring inventory to more healthy levels,” Wennink said. “The overall demand still exceeds our capacity for this year and we currently have a backlog of over 38.9 billion [euros].”
Even as ASML is able to bank on its large backlog, the slump in some of its customers in the chip market has yet to bottom out as rising interest rates, surging inflation and the ongoing banking crisis continue to dent consumer sentiment.
Taiwan Semiconductor Manufacturing Co (台積電), ASML’s biggest customer, missed sales estimates last week for the second consecutive quarter in a sign of continued weakness in global electronics demand.
ASML said that first-quarter bookings dropped 46 percent to 3.75 billion euros from a year earlier.
However, governments around the world are still racing to build more chip plants at home to avert supply disruptions.
The US has received more than 200 applications from companies for a US$39 billion program to boost chip production, while Japan, India and the EU are also all offering financial incentives to attract investments from major chipmakers.
China accounted for about 8 percent of ASML’s sales in the first quarter and about 20 percent of its order backlog, the company said.
ASML sees significant pickup of revenue from China this year, although some sales might be affected by Dutch export control measures.
“We are still waiting for the final detailed guidance from the Dutch authorities,” ASML chief financial officer Roger Dassen said in a separate statement, in reference to the planned widening of trade curbs.
“What this does for us is that we expect that we will require export licenses for advanced immersion tools,” Dassen said.
“Our interpretation of advanced immersion tools would be for the NXT:2000 and subsequent versions,” he said.
ASML, which has cornered the market for the most advanced equipment needed to make cutting-edge semiconductors, has been affected by the US bid to curb exports of leading-edge technology to China, its third-biggest market.
After pressure from US President Joe Biden’s administration, the Dutch government last month announced plans to restrict exports of some of ASML’s chipmaking machines.
The Veldhoven-based company has tried to reassure investors, saying the measures would not have a material effect on its financial outlook for this year or in the long term.
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