ASML Holding NV forecast revenue to grow about 25 percent this year, as Europe’s largest semiconductor-equipment maker won orders for eight more of its newest lithography machines in the second quarter.

ASML’s shares jumped as much as 4.9 percent in early trading Wednesday, the biggest intraday rise since Jan. 18.

“We have strength across all customers for our products,” Chief Executive Officer Peter Wennink said in a statement. “It turned out to be a very good quarter. ASML is on track to achieving net sales growth of about 25 percent for the full year.” The Dutch company said it will resume its 2016-2017 share buyback program.

The new orders for ASML, whose clients include Intel Corp., Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., brought the backlog to 27 for its newest machines, called extreme ultraviolet lithography systems or EUV, which can etch smaller circuits while increasing capacity and speed. EUV machines, about the size of a city bus, cost more than 100 million euros ($115.3 million) each. 

As chips become ever smarter, the machines that produce the chips are becoming increasingly complicated, larger and expensive. Overall, the average selling price of its machines is 29.1 million euros, according to ASML’s 2016 annual report.

ASML, which also profits from the emergence of self-driving software and wearable personal-health devices, in 2017 has the capacity to produce 12 EUV machines, which is set to expand to 24 next year before reaching an expected capacity of around 40 systems in 2019. 

More than a dozen of the machines are currently in the hands of chip makers, which are working on preparing them for production. ASML said today its EUV backlog grew to 2.8 billion euros in the second quarter, indicating that “preparation for high-volume manufacturing is well underway.”

“ASML reported a strong results set, beating on both top and bottom line while the third-quarter guidance is somewhat better as well”, ING analyst Nigel van Putten said. “More importantly, ASML introduces a full year 2017 guidance for a 25 percent revenue growth.”

Third-quarter revenue will be about 2.2 billion euros ($2.5 billion), the Veldhoven, Netherlands-based maker of chip-making machines predicts. Analysts had projected 2.16 billion euros on average. A year earlier, the bellwether for the chip industry reported sales of 1.81 billion euros.

The Dutch company on Wednesday reported sales that beat estimates. Second-quarter sales rose 8 percent from the previous quarter to 2.1 billion euros. Analysts had predicted sales of 2.0 billion euros. Profit increased 3 percent to 466 million euros, beating a 419.5 million euros estimate.

The stock has gained some 30 percent over the past year, valuing the company at 52.9 billion euros.

Taiwan Semiconductor Manufacturing Company forecast last week quarterly revenue that trailed estimates, dashing hopes that Apple Inc.’s iPhone will help the world’s largest contract chipmaker pull out of a smartphone industry slump and avert the impact of a strong currency.

By: DocMemory
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