ASM International Sees AI Demands Drive Higher 2Q Orders, 2H Sales Guidance -- Update

By Mauro Orru

ASM International raised its sales forecasts for the second half of the year after second-quarter orders beat analysts' expectations as chip makers continue to bank on ASM's technology to produce increasingly sophisticated chips to power artificial-intelligence features in new devices.

The Dutch company said it now expects revenue in the second half to grow roughly 15% from the nearly 1.35 billion euros ($1.47 billion) it reported for the first half. It previously expected revenue growth of at least 10%.

ASM provides tools--mostly for the deposition of thin films--that chip makers need to produce semiconductors as they seek to satisfy demand for smaller but more efficient chips to power AI capabilities in new smartphones, tablets and other devices.

The company booked EUR755.4 million in orders for the second quarter, up 56% on a constant-currency basis. Analysts had forecast EUR721.9 million in orders, according to consensus estimates by Visible Alpha.

Chip makers have for months sought to get their hands on ASM's tools for so-called gate-all-around transistors that make up the basic fabric of a chip. The industry is shifting from classical transistors to gate-all-around versions that provide better electrical signals and improved chip performance.

The company said strong demand for gate-all-around and high-bandwith memory, where AI is fueling investments, had lifted orders.

"The GAA node is still projected to move into high-volume manufacturing in the course of 2025, and we expect this to be a strong revenue driver for ASM," said Chief Executive Hichem M'Saad.

Quarterly revenue grew 6% on a constant-currency basis, to EUR706.1 million, beating analysts' forecasts and company guidance. For the third quarter, ASM is forecasting revenue between EUR740 million and EUR780 million.

Second-quarter net profit increased to EUR159 million from EUR151.2 million, beating analysts' expectations.

Gross profit--a closely watched metric for companies operating in the semiconductor industry--came in at EUR352 million, generating a 49.8% margin for the quarter.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

July 23, 2024 12:44 ET (16:44 GMT)

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