Bloomberg News

ASML Sales Forecast Trails Estimates After Orders Drop

January 17, 2013

ASML Holding NV (ASML), Europe’s largest semiconductor-equipment supplier, predicted 2013 sales that trail analysts’ estimates after quarterly orders declined by 20 percent.

Sales, which slid 16 percent to 4.73 billion euros ($6.3 billion) in 2012, will probably be little changed this year, the Veldhoven, Netherlands-based company said today, citing an expected weak first half. Analysts projected that revenue would rise to 5.2 billion euros, the average of 28 estimates compiled by Bloomberg.

Chipmakers have curbed orders as personal-computer sales fall, prompting a shift to production for handheld devices such as mobile phones and tablet computers. ASML agreed to sell stakes last year for a total of 3.85 billion euros to clients including Samsung Electronics Co., Intel Corp. (INTC:US) and Taiwan Semiconductor Manufacturing Co. to speed development of costly techniques to make smaller, more powerful chips.

ASML declined to the lowest intraday price in Amsterdam trading since Nov. 26 before surging as Taiwan Semiconductor, the world’s largest contract manufacturer of chips, issued a forecast on using the smaller chips. Hsinchu-based TSMC projected today that it would make more 20-nanometer chips by 2015 than its current production of 28-nanometer nodes.

Chip Demand

ASML rose 7.4 percent to 51.49 euros as Bank of America Merrill Lynch raised its recommendation to buy, saying the Taiwanese company’s plans will boost demand for ASML hardware. KLA-Tencor Corp., Lam Research Corp. and Cymer Inc., suppliers for the semiconductor industry, also rose after the forecast. TSMC also reported today that profit gained 32 percent in the fourth quarter on demand for new mobile devices from Apple Inc., Samsung and HTC Corp. (2498)

ASML gained 48 percent last year, making it the fourth-best performer in the 17-company Euro Stoxx Technology Index. Santa Clara, California-based competitor Applied Materials Inc. (AMAT:US) advanced 6.8 percent in the period.

Fourth-quarter orders, which exclude machines using new technology called extreme ultraviolet lithography, or EUV, fell from the previous three months to 667 million euros, ASML said. That missed analyst estimates of 850 million euros at Liberum Capital Ltd. and 892 million euros at UBS AG.

“A disappointing outlook, flat sales for this year are worse than we expected,” said Philip Scholte, an analyst at Rabobank International in the Dutch city of Utrecht.

PC Shipments

This week, research firm Gartner Inc. said global PC shipments dropped 4.9 percent in the fourth quarter from a year earlier to 90.4 million units as consumers switch to tablets and smartphones.

There is no indication that the market for tablets and smartphones will slow this year, ASML Chief Financial Officer Peter Wennink said in an interview today. The market for 20- nanometer nodes will be driven by demand for phones capable of using fast 4G networks, he said.

Under an investment program begun in July, ASML will accelerate development of EUV technology. In October, it agreed to buy Cymer Inc. (CYMI:US) for 1.95 billion euros to gain additional technology for that purpose.

Funds from selling the stakes, which total 23 percent, should help ASML step up the transition to a new chipmaking standard that relies on 450-millimeter disks of silicon, compared with the current 300-millimeter standard, a shift that will enable manufacturers to produce more chips faster.

EUV Orders

ASML is in talks with four customers about selling EUV systems in 2014, and expects to receive orders of eight to 12 machines “over the next couple of months,” CFO Wennink said in a video message shared by the company. A pledge to start shipping tools enabling 69 wafers an hour has “a lot more solidity than it had a couple of months ago,” he said.

Global sales of devices such as personal computers, tablets, mobile phones and printers may grow 6.3 percent this year to $666 billion, Gartner said Jan. 3. The research firm had earlier predicted growth of 7.9 percent.

To contact the reporters on this story: Cornelius Rahn in Berlin at crahn2@bloomberg.net; Fred Pals in Amsterdam at fpals@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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