Computer chip equipment maker ASML published better than expected third quarter results Wednesday, but maintained predictions of a decline in the semiconductor industry. The Dutch company posted revenue of €1.46 billion ($2 billion), surpassing analysts’ forecasts of around €1.39 billion. Its net profits for the quarter were at €335 million, also higher than predicted.
New orders fell to around €514 million, representing a significant decrease for the world’s number one maker of photolithography equipment, which lays down electronic circuits on silicon wafers to create computer chips.
Shares in the company rose as much as 1.33% to €26.91 Wednesday in early trading in Amsterdam.
Though Q3 was strong, ASML said in July it was expecting growth in the semiconductor industry to drop off, with Chief Financial Officer Peter Wennink saying that customers were becoming increasingly hesitant. Despite predictions of record sales of over €5 billion for 2011, the company said there were clear signs the industry was headed for a slowdown, with the exception of equipment related to the manufacture of tablet PCs and smartphones.
ASML has around 70% of the global semiconductor market, with Japanese companies Canon and Nikon among its biggest competitors. The Dutch leader’s customers include big players such as Intel, Samsung and Taiwan Semiconductor Manufacturing.
Wennink said that new orders were expected to rise in Q4, but maintained a pessimistic outlook for the industry, saying in a video statement released by the company: "I think 2012 will be a difficult year to say anything about right now.”
CEO Eric Meurice said the company should reach projected revenue figures of €5.5 billion, but echoed Wennink’s sentiment for a gloomy future: “It is too early to understand how overall demand for semiconductors will contribute to our business in 2012.”
EUV Innovation Moves Forward
In other developments, Meurice said that its extreme ultraviolet (EUV) program was progressing slower than had been expected, but that ASML remained on target to deliver next-generation photolithography scanners for commercial use by 2013 or 2014.
The company has struggled to find adequate power sources for its project, but Meurice said suppliers had made advances with their light source technology, which would improve EUV throughput from less than 10 wafers per hour to around 15 wafers per hour. The new power source technologies are scheduled to be put in place in the fourth quarter.
Current production capacity levels remain commercially unviable, with computer chip manufacturers demanding throughput of up to around 150 wafers per hour.
Samsung has plans to use EUV scanners to produce volume memory, with Intel aiming to use the technology as its principal lithography method by 2015.
Key Statistics – Global Semiconductor Industry (source: MarketLine)
- In 2010, the global semiconductors market grew by over 29% to $298.4 billion.
- The market is forecast to reach a value of $397.2 billion by 2015, an increase of over 33% from 2010.
- The largest segment of the global market is integrated semiconductors, which represents 80.3% of total value.
- The Asia-Pacific region represents 66.5% of global market value.
- Intel is the number one player with a 14.4% share of global market's value.