Chip firm posts 38% rise in profit

on Jul19
by | Comments Off on Chip firm posts 38% rise in profit |

Dutch firm ASML makes one of the most important pieces of machinery required to manufacture the most advanced chips in the world. U.S. chip curbs have left companies, including ASML, scrambling to figure out what the rules mean in practice.

Emmanuel Dunand | AFP | Getty Images

ASML, one of the world’s most important semiconductor equipment firm, posted a jump in revenue and profit in the second quarter, but warned of macroeconomic “uncertainties” ahead.

The Dutch company makes expensive machines that are required to manufacture the world’s most advanced chips. It counts giants like TSMC, the world’s biggest contract semiconductor maker, among its customers.

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But ASML has also been caught in the middle of the U.S.-China technology battle because of the importance of the tools it makes.

Here’s how ASML did in the second quarter versus Refinitiv estimates:

  • Net sales: 6.9 billion euros ($7.7 billion), compared with 6.72 billion euros expected. That represents a 27% year-on-year rise.
  • Net profit: 1.9 billion euros, versus 1.82 billion euros expected. That marks a 37.6% year-on-year increase.

ASML said it expects net sales in the third quarter of this year to sit between 6.5 billion euros and 7 billion euros.

The company also raised its outlook for 2023, now anticipating its net sales this year to grow 30% year-on-year, up from a 25% growth estimate previously.

ASML said that the brighter outlook is due to strong revenue from its deep ultraviolet (DUV) lithography machine, which is used to manufacture memory chips. These go into various devices, from smartphones to laptops and servers, and could ultimately be used for artificial intelligence applications. 

Still, ASML CEO Peter Wennink warned about macroeconomic uncertainties.

“Our customers across different market segments are currently more cautious due to continued macro-economic uncertainties, and therefore expect a later recovery of their markets. Also, the shape of the recovery slope is still unclear,” Wennink said in a press release.

Companies that design and make chips that go into end products like smartphones have been dealing with high inventory levels of these components. That’s because demand for end products, such as consumer electronics, continues to remain weak.

That means chipmakers are slowing down their output of chips and therefore using ASML tools less, Wennink said in pre-recorded video interview on the company website.

No ‘significant impact’ from China export controls

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