ASML Halts Second-Quarter Guidance, Continues to Win Orders
ASML Cancels Second-Quarter Guidance, Continues to Win Orders
(Bloomberg) -- ASML Holding NV, a crucial supplier to Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co, refrained from providing guidance for the second quarter amid uncertainty following the coronavirus pandemic, but hinted on a significantly more profitable quarter.
The Dutch company, which produces extreme ultraviolet-lithography equipment, added it sees a strong order intake and currently no change in demand.
“The demand outlook is currently unchanged and we have not encountered any push-outs or cancellations this year. Despite the challenging circumstances, to date we have been able to continue ASML’s operations,” said Chief Executive Officer Peter Wennink.
However, “there is significant uncertainty about how the current COVID-19 crisis will impact the global GDP development, end markets, our manufacturing capability and supply chain,” he added.
ASML newest machines, called extreme ultraviolet lithography systems or EUV, etch smaller circuits while increasing capacity and speed. Many of the investments made by customers are strategic and support their long-term plans. ASML shipped four EUV systems in the quarter but was only able to recognize revenue for two of them.
Based on orders and the requests from customers, the second quarter “can be a really good quarter,” said Chief Financial Officer Roger Dassen.
“We should be looking at a 50% improvement of revenue over the first quarter,” Dassen said. “Also at the gross margin level, we should be looking at a significant improvement over the gross margin that we recognized in the first quarter.”
ASML refrained from issuing formal guidance as it could be faced with supply chain issues, said ASML’s CEO in an interview with Bloomberg TV. The biggest risk for the company lies in a potential breakdown of its 5,000 suppliers, 790 of which provide materials and equipment that are used directly to produce the ASML systems. ASML’s main TWINSCAN and EUV factories are based in Veldhoven, the Netherlands.
“That’s why we said; let’s take a pause. Don’t go to a formal guidance,” said Wennink. “It is very difficult to predict how governments will react and how governments will extend the sometimes very severe measures they currently have in place.”
ASML Cuts Outlook as Virus Outbreak Affects Supply Chain
First-quarter revenue came in at 2.4 billion euros ($2.6 billion) with net bookings of 3.1 billion euros, including 1.5 billion euros of EUV systems. First-quarter gross margin was 45.1 percent. ASML last month cut its revenue outlook for the first quarter and halted share buyback plans after complications from the novel coronavirus caused supply-chain problems and shipment delays. It had previously forecast revenue of as much as 3.3 billion euros with a gross margin of as much as 47%.
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