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ASML Sales Forecast Trails Estimates on Delivery Delays

Development of extreme ultraviolet lithography technology, which is crucial to ASML Holding NV's future as customers want to produce smaller chips while increasing capacity and speed, is progressing on schedule to reach a target of 500 wafers per day by the end of this year, the company said. Photographer: Jasper Juinen/Bloomberg
Development of extreme ultraviolet lithography technology, which is crucial to ASML Holding NV's future as customers want to produce smaller chips while increasing capacity and speed, is progressing on schedule to reach a target of 500 wafers per day by the end of this year, the company said. Photographer: Jasper Juinen/Bloomberg

July 16 (Bloomberg) -- ASML Holding NV, Europe’s largest semiconductor-equipment supplier, predicted full-year sales that trail analysts’ estimates as makers of chips that process device functions evaluate capacity increases, and deliveries of its newest product are postponed.

Revenue this year will total about 5.6 billion euros ($7.6 billion), amid an “adjustment” in fourth-quarter delivery plans, Veldhoven, Netherlands-based ASML, which supplies chipmakers including Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., said in a statement today. Analysts predict sales of 6.13 billion euros, the average of 33 estimates compiled by Bloomberg.

Development of extreme ultraviolet lithography technology, which is crucial to ASML’s future because customers want to produce smaller chips while increasing capacity and speed, is progressing on schedule to reach a target of 500 wafers per day by the end of this year, the company said. As customers now request the latest upgrades, delivery of three EUV systems planned for 2014 will be postponed until 2015, ASML said.

The forecast “comes as a surprise,” as a recovery in orders would be expected in the fourth quarter, partially driven by Intel Corp., one of ASML’s customers, Guenther Hollfelder, an analyst at Baader Bank in Unterschleissheim, Germany, said by phone. Hollfelder estimated that 200 million euros of the shortfall can be explained by the EUV delay.

Production Progress

ASML said it’s making progress toward offering customers production of typically about 1,500 wafers a day in 2016.

ASML fell as much as 2.9 percent, the steepest intraday drop since April 16. Shares were trading down 0.5 percent at 66.60 euros as of 10:45 a.m. in Amsterdam, valuing the company at 29.8 billion euros.

Intel’s third-quarter sales forecast yesterday topped analysts’ projections, fueling optimism that the personal-computer market is emerging from a two-year slump. The U.S. company said revenue in the current period will total $14.4 billion, plus or minus $500 million, while analysts on average estimated sales of $14.1 billion. Hsinchu-based TSMC, world’s largest custom chipmaker, reported record quarterly profit today as customers including Apple Inc. prepare to release new smartphones.

ASML and its logic and memory customers are striving for innovation because of a demand for more connectivity and the development of the “Internet of things and big data,” said Chief Executive Officer Peter Wennink.

Faster Power

“They all need faster chips, they need chips that are more efficient in respect of power,” Wennink said in a video presentation on ASML’s website today.

Second-quarter net income rose to 399 million euros from 249 million euros in the previous three months, the Dutch company said. Analysts had predicted profit of 350 million euros. Sales increased to 1.64 billion euros from 1.40 billion euros in the first quarter. In April, ASML forecast second-quarter sales of about 1.6 billion euros.

In the second half of the year, demand from memory-product customers will push sales growth of ASML’s deep ultraviolet lithography systems, the CEO said.

To contact the reporter on this story: Elco van Groningen in Amsterdam at vangroningen@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net Mark Beech, Tom Lavell

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