ASML’s second-quarter net profits rise by 38% as demand rallies

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One of the world’s biggest semiconductors suppliers, ASML, had an optimistic 2021 sales outlook released on Wednesday, where it announced a new share buyback as sales went up. Given that we are in the middle of a chip shortage, it is not surprising that ASML is confident about the future.

On early Wednesday, the company reported a 38% jump in second-quarter net income, to reach $1.22 billion driven by increased sales. The sales jumped 22% year on year to reach 4.02 billion euros, while chipmakers ordered more ASML lithography (a 75% increase relative to the end of the first quarter) to hit 8.3 billion euros.

A second look at the outlook

Chief Executive Officer, Peter Wennink, said that demand continues to be high across all market segments and the company’s product portfolio since the market is focused on increasing production capacity.

After tripling its outlook for 2021 sales growth in April to 30%, it hiked the outlook to 35%, based on strong demand for its manufacturing machines and utilization software, which is what chip makers need to increase the capacity of their existing facilities.

ASML’s edge

Most major chipmakers, including TSMC, Intel, and Samsung, need equipment that ASML provides. Since they are all working on significant expansion plans, they will need ASML to supply the machinery.

Analysts expect that the Dutch company will have net profits of 1.02 billion Euros, in the April-June period, with 4.08 billion euros in sales, according to data by Refinitiv.

The company also reported that it is ramping up EUV in volume production for Memory with plans to implement EUV on future nodes across three DRAM customers and has shipped the first TWINSCAN NXE:3600D system that offers 15-20% more productivity and 30% improved overlay compared to the TWINSCAN NXE:3400C.

($1=0.8495 euros)