ASML confirms ‘healthy’ chip market

ASML on Wednesday confirmed the “healthy state of the semiconductor market” as Europe’s largest chip equipment maker reported third-quarter net sales of €958m, 80 per cent higher than a year ago, and a more than three-fold increase in net profit.

The Dutch company said it had made further headway in luring Japanese clients from its main rivals Nikon and Canon, and credited product launches for reinforcing technology leadership.

ASML has a market share well in excess of 50 per cent by both value and volume.

Eric Meurice, ASML chief executive, said the outlook reflected a continuous capacity demand in the semiconductor sectors other than flash memory and market share gains.

“After nine months of strong bookings due to a fairly high semiconductor unit growth of up to 19 per cent in 2006, as well as a strong flash memory capacity build-up, we expect unit bookings in Q4 2006 to remain high at 65 units, with upside potential,” he said.

ASML results followed third-quarter results late on Tuesday from Intel, the world’s biggest chipmaker, which reported a 47 per cent rise in profits from the previous three months on revenues up 9 per cent.

However, addressing concerns voiced by industry analyst about a projected drop in demand, Mr Meurice said he expected 2007 demand to match that of 2006.

Net profit was €172m or €0.37 a share, three times higher that of the same period in 2005 and 3 per cent above the second-quarter result.

ASML shares fell more than 5 per cent to €18.03 in mid-morning trading in Amsterdam.

Operating profit rose was €239m, three times higher compared to the same period in 2005.

The company’s order book is “expected to remain high” in the fourth-quarter with “upside potential”.

This is a key indicator of industry trends as analysts and investors scan the semiconductor scene for signs of a downturn that may indicate sliding end-user demand for chip-consuming products like mobile phones and other digital apparatus.