UPDATE 2-ASML lifts sales forecast on demand for mobile devices

Wed Jul 17, 2013 7:31am EDT

* Says full-year sales could reach 5 bln euros

* Previously saw sales around last year's 4.7 bln euros

* Q2 net profit 239 mln euros, beats forecasts

* Shares, up 40 percent this year, hit new high (Adds CEO, analyst quotes, detail, background, shares)

By Sara Webb

AMSTERDAM, July 17 (Reuters) - ASML, the world's biggest manufacturer of tools for making computer chips, raised its full-year sales forecast on Wednesday as growing demand for smartphones and tablets more than offsets weak personal computer markets.

The Dutch firm is seen as a barometer for the health of Europe's technology sector and its upbeat tone suggests manufacturers are betting on unabated consumer appetite for the latest mobile gadgets, despite an uncertain economic outlook.

Global sales of mobile phones rose just 0.7 percent in the first quarter, according to researchers Gartner, and while smartphones outpaced that, recent weaker-than-expected results from Samsung and Apple have raised fears of a slowdown.

ASML said its full-year sales could be as high as 5 billion euros ($6.6 billion), excluding a recent acquisition, up 6 percent from 2012. As recently as April, it forecast sales similar to last year's 4.73 billion euros.

"The results are comforting and healthy, and prove the industry overall is in an upcycle and that the second half will be meaningfully better than the first half," said Kepler Cheuvreux analyst Bernd Laux.

Shares in ASML, up 40 percent this year, hit a new high of 68.45 euros. They were up 2.9 percent to 68.38 euro at 1120 GMT.

Analysts have said the challenge for mobile device suppliers like ASML's customers is to make products more cheaply for emerging markets, which are seeing strong demand for low-cost smartphones, while also supplying goods that allow top-end customers to make ever smaller and more powerful devices.

One analyst, who declined to be named, said ASML's results suggested it was managing those challenges well.

Mobile devices are particularly important for ASML as sales of smartphones and tablets are eating into demand for personal computers (PC). Gartner expects PC shipments to fall 11 percent this year, compared with a 68 percent jump for tablets.

NEW TECHNIQUE

ASML, which competes with Japanese groups Canon and Nikon, cited strong demand from foundries, or outsourced chip-makers, and from logic customers, which make microprocessors used in computers and mobile devices.

The Dutch firm also said it had started to see additional demand from DRAM - or Dynamic Random Access Memory - customers for mobile devices such as tablet computers and smartphones, prompting it to raise its full-year outlook.

"The increase is largely driven by the fact our memory customers, especially our DRAM customers, are coming back," Chief Executive Peter Wennink said in a webcast interview.

"There is a clear shortage in the DRAM market especially with respect for mobile DRAM," he added.

Wennink, who stepped up from the post of chief financial officer to become CEO on July 1, said demand was likely to remain very strong this year and next.

The group said it was on track with the development of its new manufacturing technique based on extreme ultraviolet light (EUV) which will enable the industry to produce smaller chips and is intended to cement ASML's position as market leader.

The EUV-based technique has taken longer than expected to develop and proved difficult to perfect, leading ASML to acquire Cymer Inc, a supplier of lithography light sources used to make chips, to speed up the development process.

Wennink said he expected three EUV systems to be recognized for revenue in 2013. Some analysts expect ASML to be shipping 80 or so of these tools a year, with a price tag of about 100 million euros each, within a few years.

ASML reported better-than-expected second-quarter net profit of 239 million euros on sales of 1.16 billion euros, with net bookings of 1.065 billion euros. Including Cymer, net profit was 221 million euros on sales of 1.19 billion euros.

Analysts in a Reuters poll had forecast a net profit of 204 million euros on sales of 1.11 billion euros.

ASML forecast third-quarter sales of 1.3 billion euros including Cymer, On top of the 5 billion euros in full-year sales, ASML said it expected Cymer to contribute about 180 million euros.

($1 = 0.7612 euros) (Additional reporting by Gilbert Kreijger; Editing by Mark Potter)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.