ASML, the world's largest chip equipment maker, on Wednesday struck a bright note amid semiconductor sector gloom by delivering better-than-expected fourth-quarter results and an upbeat outlook for 2006.
The group gained a sixth customer in Japan, home to competitors Nikon and Canon, and said orders for new immersion systems – each of which sells for €25m ($30m) – were likely to exceed expectations of 20-25 shipments this year. “We see this as the technology of choice for the next three or four years,” said Eric Meurice, chief executive.
Group sales rose 3 per cent to €2.53bn in 2005 and €548m in the fourth-quarter, as customers rushed to meet year-end short-term demand for chips for mobile phones, PCs and music players.
That contrasted with a 9 per cent sector-wide sales decline in 2005, and results from Intel, the world's biggest chipmaker and an ASML customer, which undershot expectations, suggesting a dip in demand for personal computers.
Mr Meurice said ASML had a market share of 57-58 per cent by value and expected to increase that in 2006. Its shares rose 6.4 per cent to €17.90.
It shipped 196 systems in 2005, selling 47 units in the fourth quarter, against analysts’s expectations of 40. Mr Meurice said the order book, a key indicator of industry demand for chip-using consumer products, confirmed “an overall semiconductor cycle upswing”. He expected first-quarter bookings to at least match those of the fourth quarter.
The backlog comprised orders for 95 systems, with average prices at record highs of €15.1m.
The company said it expected to ship 48 systems in the first-quarter, adding that there could be short-term demand for additional shipments. Gross margins will reach 38-39 per cent from 37.3 per cent at the year-end.
ASML also said it was preparing to buy back shares this year, although that
was subject to whether it decided to make “significant” acquisitions or investments. “There are two or three business plans being investigated,” said Mr Meurice.
Separately it proposed cancelling priority shares held by management and supervisory boards.
The shares have special voting rights and are seen as a takeover defence.