Semiconductor equipment supplier ASML Q2 profits soar thanks to strong demand from chip makers
By APWednesday, July 14, 2010
ASML bounces back to Q2 profit on strong sales
THE HAGUE, Netherlands — ASML Holding NV, a key supplier to computer chip makers like Intel and Samsung, said Wednesday it bounced back to a profit in the second quarter due to a sharp rebound in demand — a further sign the technology sector is recovering quickly.
ASML’s earnings announcement came a day after U.S. chip maker Intel posted its largest quarterly net income in a decade thanks to a strengthening computer market and more sophisticated factories.
Intel’s results topped Wall Street’s forecasts and it raised its guidance. Investors sent the stock price up more than 5 percent in extended trading and tech stocks also climbed across Asia.
ASML, which supplies tools to chip makers, said it made a net profit of €239 million ($300 million), compared to a loss of €104 million in the same period last year. Revenues rose to €1.07 billion from €277 million in last year’s second quarter.
The Dutch company said in a statement it expects full-year sales in 2010 to be 10-15 percent higher than its 2007 record of €3.8 billion as chip makers make up for under-investment during the economic crisis.
“This level of sales is expected to continue into 2011, barring a major macro-economic downturn, as it is supported by a number of fundamental growth drivers,” ASML CEO Eric Meurice said in a statement.
Investors welcomed the news, with ASML stock rising 5.6 percent in early trading to €25.76 ($32.38) on the Amsterdam exchange. The price later dropped to €25.22 ($31.70), still a rise of 3.3 percent over the previous day’s close. Amsterdam’s broader AEX index was down a quarter percentage point.
ASML makes lithography systems, machines that use focused beams of light to map out the physical circuitry of computer chips, at the heart of the manufacturing process. A single machine costs more than €20 million, and the average selling price for a new system in the second quarter was €25.6 million.
The company, based in Veldhoven, said it booked orders worth €1.18 billion ($1.48 billion) in the second quarter and expects bookings of around €1.3 billion in the third quarter. That’s a sign that Intel and other chip makers see enough demand for their products that they are needing the tools to make them.
