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ASML Sees 2021 Gross sales Up 30% as Chip Scarcity Boosts Demand 


(Bloomberg) — ASML Holding NV sharpened its full-year steering as demand for its chip-making tools soared through the world semiconductor scarcity.

The Dutch firm, a vital provider to Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., mentioned it now expects 2021 income progress of about 30% from a yr in the past, in comparison with a earlier goal of “double-digit” progress. It additionally mentioned it expects the full-year gross margin to be between 51% and 52%.

Shares rose as a lot as 5.8% in Amsterdam buying and selling Wednesday and are up about 35% for the reason that begin of the yr. ING Groep NV analyst Marc Hesselink known as the full-year steering a major elevate and mentioned the outcomes have been “very sturdy,” in a notice to buyers.

Key Insights

Second-quarter income will rise to between 4 billion euros ($4.8 billion) and 4.1 billion euros, with a gross margin of about 49%, the corporate mentioned in a press release on Wednesday. Analysts on common had anticipated a gross sales forecast of three.95 billion euros and a gross margin of fifty.2%, in keeping with information compiled by Bloomberg.ASML reported first-quarter gross sales of 4.4 billion euros. That compares to the 4.03 billion-euro common estimate from analysts.“The primary cause why it was above steering is mainly due to the market state of affairs,” Chief Govt Officer Peter Wennink mentioned. “You simply learn the papers, chip shortages in every single place.”Wennink mentioned clients put in ASML software program to improve machines and make them extra productive.The roll-out of 5G, synthetic intelligence and high-performance computing can also be fueling demand.ASML shipped 9 of its latest EUV machines within the first quarter, however acknowledged income for seven, amounting to 1.1 billion euros.The corporate mentioned it nonetheless expects whole EUV system gross sales this yr to be 30% greater than 2020 and plans to ship 55 methods subsequent yr.The superior EUV machines are wanted to make chips which might be quicker, cheaper and extra environment friendly.

Market Context

Carmakers have suffered essentially the most from a world semiconductor scarcity, however different industries, together with telecom firms, are more and more affected.TSMC final week boosted its capital expenditure plan for the yr to $30 billion, from an earlier estimate of as a lot as $28 billion, and mentioned the chip provide crunch might persist into 2022.Intel Corp. in March unveiled new plans to create a foundry enterprise that may make chips for different firms.U.S., Europe and China are all looking for self-sufficiency within the manufacturing of cutting-edge semiconductors.“That can result in greater capital depth as a result of it’s decoupling as a worldwide ecosystem, however it additionally results in some capital inefficiency,” Wennink mentioned. “There’s a beneficiary of that capital inefficiency, and that’s us.”Whereas ASML stands to profit from the development within the short-term, it has warned that it might take years for governments to vary the present world provide chain.ASML additionally has confronted problem getting the Dutch authorities to resume a license to export its EUV methods to China amid ongoing commerce tensions.

Get Extra

See extra of the corporate’s presentation right here.

(Updates with shares, analyst response in third paragraph)

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