GreenBkk.com Tech | ASML sees impact of Japan quake on customers

ASML sees impact of Japan quake on customers

By Roberta B. Cowan
AMSTERDAM | Wed Apr 13, 2011 3:54am EDT

(Reuters) - Dutch chip equipment maker ASML, a bellwether for the European tech sector, said some customers were holding back on confirming orders because the Japan quake had disrupted their supply chain.

ASML, the world's largest maker of semiconductor lithography machines, which map out electronic circuits on silicon wafers, reported a record quarterly profit on strong demand for the newest chips used in tablet computers and smartphones, but reported a lower-than-expected order book in the first quarter.

ASML also sounded a note of caution because of the devastating March 11 earthquake and resulting tsunami.

ASML shares were down 2.2 percent at 28.76 euros in early trading, while the European tech sector index was up about 0.5 percent.

"What we are seeing over the last two, three weeks increasingly, there are now messages from our customers that they are seeing an impact," Chief Financial Officer Peter Wennink said.

"There is a level of uncertainty about the ability of the entire supply chain in the electronics industry to keep shipping what our customers need. A few of our customers have come and said, 'Yes, we are seeing some impact'."

ASML's Chief Executive Eric Meurice said semiconductor manufacturers were showing caution in assessing the impact of the Japanese quake on their supply chain and the overall end-market.

"Some customers have indeed re-timed a limited number of deliveries," he said in a statement.

But Meurice added that demand continued to be sufficiently strong for 2011, and ASML's revenue expectations would not be significantly affected, with 2011 sales still seen exceeding 5 billion euros.

PROXY

ING analyst Niels de Zwart said that following ASML's results, he did not expect peers to be affected by the quake.

"ASML says that it sees a limited impact from the Japanese earthquake, so I can't see the industry being significantly different, since ASML is a proxy for the industry," he said.

First-quarter net profit was 405.1 million euros, under International Financial Reporting Standards, up from 101 million euros a year ago and 362.2 million euros in the fourth quarter, which was the previous record.

First-quarter sales were 1.452 billion euros, which were in line with analysts' expectations for sales of 1.448 billion euros.

Under U.S. GAAP, which is more widely followed by analysts and investors for the tech sector, first-quarter net profit was 395 million euros, up from 107 million euros a year ago.

AMSL said it had booked 845 million euros' worth of systems in the first quarter -- below analysts' forecasts -- and expects bookings in the second quarter to be worth between 900 million and 1 billion euros.

Analysts in a Reuters poll had expected ASML to book first-quarter orders of 1.2 billion euro, with forecasts in a range of 788 million euros to 1.9 billion euros, down significantly from the record-breaking 2.3 billion euros of orders booked in the fourth quarter 2010.

ASML, which has a global market share of around 70 percent and competes with Japan's Nikon Corp and Canon Inc, counts Intel Corp, Samsung Electronics Co and Taiwan Semiconductor Manufacturing as its customers.

ASML has a market capitalization of 12.87 billion euros ($18.58 billion) and its stock has risen 12 percent over the last year, outperforming the AEX index, which has risen around 8 percent over the same period.

(Additional reporting by Gilbert Kreijger; Editing by Sara Webb and Will Waterman)

Credit: Reuters (www.reuters.com)