ASML Holding NV (ASML), Europe’s biggest manufacturer of semiconductor equipment, set a mid-2012 target for achieving a 10-fold capacity increase for new technology it’s planning to market this year.
ASML fell in Amsterdam, retreating from the highest price in almost 11 years, after Chief Executive Officer Eric Meurice told analysts that by the summer of 2012, its second-generation extreme ultraviolet lithography systems, or EUV, “must show the proof of the pudding” and process 60 silicon wafers an hour compared with 5 to 7 wafers currently.
The Dutch company, which makes machines that produce chips for Nokia Oyj (NOK1V)’s mobile phones and Apple Inc. (AAPL)’s iPads, has been working on EUV since the late 1990s. ASML expects a “healthy start” to the year, with first-quarter orders forecast to rise from the final three months of last year Meurice said in a statement today.
“EUV may be a slow starter, but once this new technology moves to high volume in 2014-2015, the dominance of ASML will be secured for another 10 years,” Victor Bareno, an analyst at SNS Securities in Amsterdam, said today in a report to clients. Bareno cut his recommendation on ASML to “reduce” from “hold,” saying the stock’s price may already reflect a recovery in technology-industry orders.
ASML fell 3.5 percent to 32.50 euros at the close in Amsterdam, the biggest drop since Aug. 18. The stock, which yesterday was at the highest price since May 23, 2001, was the only decliner today on the BBE European Technology Index (BETECH), where STMicroelectronics NV, Europe’s largest semiconductor maker, led gains.
Fourth-quarter net bookings at ASML, excluding EUV machinery, totaled 710 million euros ($910 million), the company said today. That beat the average estimate of 696 million euros of seven analysts surveyed by Bloomberg. Net income fell 30 percent from a year earlier to 284.7 million euros. Profit exceeded the 228 million-euro average of 17 estimates. Sales dropped 20 percent to 1.21 billion euros.
Asian markets accounted for 71 percent of ASML’s fourth- quarter revenue, with the U.S. contributing 24 percent, according to an online presentation. Argon fluoride laser machinery generated 81 percent of sales, with krypton fluoride technology providing 14 percent. Full-year net income jumped 44 percent to 1.47 billion euros as sales rose 25 percent.
First-half revenue will amount to 2.4 billion euros, the company said.
Orders from outside Europe will sustain growth and make up for any slowdown in the region amid the sovereign-debt crisis, Chief Financial Officer Peter Wennink said in an interview at company headquarters in Veldhoven, Netherlands. An economic decline in Europe probably won’t extend to the technology industry, unlike the global recession and credit crunch that followed the collapse of Lehman Brothers Holdings Inc. in 2008.
“The situation today differs a lot from when Lehman fell,” Wennink said. “Back then, people didn’t want to spend any money for fear money at the bank would disappear.”
ASML said it’s continuing to “make progress in bringing EUV technology to the market.” The company has won orders for 11 volume-production EUV systems costing 75 million euros a unit, Wennink said today at a press conference.