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ASML Ups Full-Year Sales Forecast, China Demand Stays Strong

  • Ups full-year sales growth forecast to 30% from 25%
  • Q2 net profit up 35% at 1.9 billion euros vs forecast 1.82 bln
  • Q2 sales up 28% to 6.9 billion vs forecast 6.74 billion

AMSTERDAM, July 19 (Reuters) - Dutch semiconductor equipment maker ASML reported second-quarter earnings that beat expectations on Wednesday and boosted its full-year sales outlook, citing strong demand from Chinese customers.

Peter Wennink, CEO of Europe's biggest tech company by market value, increased ASML's full-year sales growth forecast to 30%, up from a previous 25%, in part due to continuing strong demand from Chinese customers, who can only buy slightly older equipment due to export control rules.

"Our customers across different market segments are currently more cautious due to continued macro-economic uncertainties, and therefore expect a later recovery," Wennink said in a statement.

"However, our strong (order) backlog of around 38 billion euros ($42.6 billion) provides us with a good basis to navigate these short-term uncertainties," Wennick said.

Net profit was up 35% from a year ago to 1.9 billion euros on sales up 28% to 6.9 billion, beating average analyst expectations of 1.82 billion euros and 6.74 billion respectively, according to Refinitiv data.

ASML dominates the market for lithography systems, machines that cost up to $200 million apiece and which use lasers, lenses and mirrors to help create the minute circuitry of chips. It is a supplier to almost every computer chip maker and is expanding production as it cannot keep up with customer demand.

Wennink said chip makers who make the most advanced chips using ASML's EUV, or extreme ultraviolet, systems are slowing the pace at which they want equipment delivered. That is because, while companies such as TSMC, Samsung and Intel are expanding production around the world, their new fabrication plants are not ready to receive EUV machines.

By contrast, customers who use ASML's second-most advanced DUV, or deep ultraviolet, product line, used for slightly older chips, are still demanding every tool they can get.

"Our Chinese customers say: we are happy to take the machines that others don’t want," Wennink said.

ASML has never sold EUV machines in China due to export control rules but it remains a key market.

In June the Dutch government announced a licensing requirement for some DUV models, following pressure from Washington aimed at undermining Beijing's ability to make its own advanced chips.

Wennink repeated on Wednesday he does not expect the Dutch rules, or expected further rules from the U.S., to impact the company's 2023 or long-term financial forecasts.

($1 = 0.8917 euros)

Reporting by Toby Sterling; Editing by Tom Hogue and David Holmes

Source: Reuters

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