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ASML does better than analysts expect

by on20 October 2021

Huge profits strong demand

ASML, which makes most of the world’s chip making equipment, has reported better profits than the cocaine nose jobs of Wall Street predicted.

The company posted a quarterly net income of 1.74 billion euro amid strong demand for its products and a global semiconductor shortage.

Analysts had forecast a net income of 1.6 billion euro for the third quarter ended 30 September.

Revenue came in at 5.24 billion euro. In the third quarter of 2020, ASML had reported a net income of 1.1 billion euro on revenue of 3.96 billion euro.

Chief Executive Officer Petter Wennink said that demand continues to be high and he previously expected his company to be flat out for the next decade.

Digital transformation and chip shortages fuel the need to increase capacity to meet the current and expected future demand for both logic and memory chips, Wennink said.

ASML dominates the market for lithography systems, machines that cost up to 150 millio euros each and that use focused beams of light to help create the circuitry of semiconductors.

The company on Wednesday forecast fourth-quarter sales of 4.9-5.2 billion euro at a gross margin of 51-52 percent. Wennink repeated the company's full-year target of 35 percent of sales growth.

At a meeting with investors in September, the company said it was benefiting from "megatrends" in the electronics industry and also raised its long-term forecasts, estimating full-year revenue would hit 24-30 billion euro ($28 billion-$35 billion) in 2025, with gross margins of up to 55 percent.

The company is expanding its capacity as semiconductor makers expand theirs to address the global chip shortage. Key customers include all major chip makers such as TSMC, Samsung and Intel.

Last modified on 20 October 2021
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