ASML Revenue Forecast Trails Estimates on Slowing Demand

ASML Holding NV, Europe’s largest semiconductor-equipment supplier, predicted sales trailing analysts’ estimates on slowing demand from makers of chips that process functions in devices. The stock fell the most in more than two years.

Revenue this quarter will be about 1.6 billion euros ($2.2 billion), ASML, which supplies chipmakers including Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., said today. Analysts predict 1.7 billion euros, the average of estimates compiled by Bloomberg.

ASML lowered its first-half sales forecast by including a technology called EUV into its projection, whereas it had previously excluded it. The Veldhoven, Netherlands-based company is focusing on the development of EUV, which enables the production of smaller chips while increasing capacity and speed, as sales of personal computers fall and chip production shifts to mobile phones and tablets.

“It’s more or less a profit warning,” Robin van den Broek, an analyst at ING Bank, said by phone. “That ASML is now including EUV in its sales guidance means a difference on a yearly basis of around 500 to 600 million euros, which is about 10 percent of sales.”

ASML shares fell as much as 6.5 percent, the most since August 2011, and declined 4.5 percent to 59 euros at 9:12 a.m. in Amsterdam. They have declined 13 percent this year.

Intel Corp., the world’s largest chipmaker, has posted two straight annual sales declines on slowing demand for personal-computer processors. Yesterday, it reported higher first-quarter sales and forecast revenue that may top estimates in the current period, saying the PC market is stabilizing.

Logic Chips

First-half sales will be 3 billion euros, including EUV, ASML said. In January, it forecast 3 billion euros excluding EUV. ASML cited “adjustments of system demand” from some clients and “uncertainties in next-generation device designs.”

“First-quarter sales came in as expected, largely driven by memory customers,” Chief Executive Officer Peter Wennink said in the statement. “Sales in the second quarter are however expected to be affected by adjustments of system demand from some logic customers.”

Logic chips are used to process digital functions, in contrast to memory chips, which are used to store digital information.

First-quarter net income rose to 249.1 million euros from 96.2 million euros a year earlier. Analysts had predicted 230 million euros. Sales climbed 57 percent to 1.4 billion euros, boosted by the takeover of light-source maker Cymer Inc. last year.

Regarding EUV, Wennink in January said he expects to reach the stability levels its customers require in the second half of 2016 or in 2017. The company also said it had decided to boost investment in research and development to ensure EUV progress stays on course.

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