ASML Raises 2021 Outlook as Chip Shortage Boosts Demand -- 2nd Update
--ASML said first-quarter sales benefited from customers' plans
to accelerate output
--Company helped chip makers to upgrade their machines to
--CEO sees short-term surge in demand tapering off next year,
but longer-term trends driving growth
By Adria Calatayud
ASML Holding NV on Wednesday raised its revenue guidance for
2021 citing a significant increase in demand, as semiconductor
makers worldwide look to increase production to address a global
The Dutch company, which supplies equipment to the world's
largest chip makers, said it received a boost from the
semiconductor shortage in the first quarter as customers sought to
upgrade their machines to enhance productivity. As a result, ASML's
net profit soared and sales were ahead of the company's
Analysts say ASML stands to gain further as chip makers
accelerate their spending plans to strengthen production capacity
amid a chip shortage that has slowed production at car makers and
electronics companies around the world.
"We have seen a significant spurt in terms of customer demand,"
ASML President and Chief Executive Peter Wennink said.
ASML now expects revenue growth to be toward 30% this year
compared with its previous guidance of double-digit sales growth.
Based on divisional guidance, analysts had estimated that ASML's
previous revenue expectations implied a 12% rise.
The Dutch maker of semiconductor equipment made a net profit for
the first quarter of 1.33 billion euros ($1.60 billion) compared
with EUR390.6 million for the same period last year.
Quarterly net sales increased to EUR4.36 billion from EUR2.44
billion a year before, with a gross margin of 53.9%.
The company had guided for first-quarter net sales of between
EUR3.9 billion and EUR4.1 billion, and for a gross margin of
between 50% and 51%.
Mr. Wennink said the company benefited from higher-than-expected
revenue from its installed-base business on the back of software
upgrades in installed machines. Revenue from software upgrades
carries a higher margin, he noted.
Order intake for the quarter came in at EUR4.7 billion, with
orders worth EUR2.3 billion for ASML's most advanced technology,
called extreme ultraviolet or EUV. ASML's current backlog for EUV
systems stands at EUR7.4 billion, Chief Financial Officer Roger
For the second quarter, ASML expects revenue to be between
EUR4.0 billion and EUR4.1 billion with a gross margin around
Mr. Wennink said the company's second-quarter performance will
be held back by software upgrades that were brought forward to the
first quarter and revenue recognition that will be booked in the
To accelerate chip production, customers have asked ASML to skip
machine factory-acceptance tests in the Netherlands and ship the
units directly to the customers to do tests at their facilities,
which saves a couple of weeks, Mr. Wennink added.
The current surge in demand is being driven by last year's
caution regarding Covid-19 and should subside in 2022, Mr. Wennink
said. However, there is a secular demand driver linked to
innovations like 5G, artificial intelligence and high-performance
computing that will be there for years to come, he added.
Geopolitical tensions and a desire for tech sovereignty in the
U.S., Europe and Asia are also expected to create additional demand
for semiconductor equipment, as more chip-fabrication plants are
built across the globe, he said.
The company said it is planning to increase production of EUV
tools to 55 systems next year, but that it is limited by supply
constraints for this year.
ASML also said it expects an early completion of its EUR6
billion share-buyback program launched in January 2020, as its
expected cash generation will enable significant share repurchases
in the coming quarters.
Shares at 1407 GMT were up 4.2% at EUR533.40.
Write to Adria Calatayud at firstname.lastname@example.org
(END) Dow Jones Newswires
April 21, 2021 10:31 ET (14:31 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.