Chip equipment maker ASML sees stronger growth ahead

Amsterdam

ASML Holding NV, a supplier of equipment to the world's biggest chipmakers, reported better than expected second-quarter earnings and said it expected an even-stronger performance for the rest of the year.

The bullish forecast from the Dutch maker of lithography systems used by Intel, Samsung, and TSMC to lay out semiconductor circuits, may assuage concerns that demand for memory chips is waning, or that US tariffs on China are undermining customers' confidence.

The company reported net income of 584 million euros (S$928.3 million), up from 466 million euros a year earlier, as sales surged 30 per cent to 2.74 billion euros.

Analysts polled by Reuters forecast sales at 2.56 billion euros and net income at 524 million euros.

"After an excellent first half of 2018, we expect the second half to be stronger, with improved profitability and continued growth from Q3 to Q4," said CEO Peter Wennink in a statement.

Mr Wennink added that he expected that trend to continue in 2019.

ASML has high visibility on its business as chipmakers must plan carefully where its machines - which cost roughly 100 million euros each - are placed in semiconductor fabrication plants, many of them based in Taiwan.

ASML said it had received net bookings worth 1.95 billion euros during Q2 and forecast net sales of 2.7-2.8 billion euros for the third quarter.

Discussing the chip market, Mr Wennink said the company shipped one more of its newest, most expensive machines, during the quarter than it had expected.

Customers making logic chips, used to power the brains of computers, smart phones and tablets, are preparing "for the ramp of next...(generation) devices starting later this year", he noted.

ASML repeated its forecast that it will sell 20 of the newest machines this year and 30 more in 2019.

It said that memory chip makers, who buy marginally less advanced machines, continue "to require a significant number of lithography systems at least throughout this year and into 2019".

Mr Wennink said demand from logic and memory chip makers seems to be in balance. REUTERS