ASML Unit Orders Increase, but Order Value Falls

Dutch chip equipment maker ASML reported an anticipated recovery of fourth-quarter unit orders on Wednesday, but the order value fell unexpectedly from the third quarter due to
mix effects.

A supplier to most of the world's top chip makers, ASML said it booked orders for 54 systems -- up from 40 in the third quarter and 30 in the second -- slightly above an average forecast of 52 systems in a Reuters poll of 12 analysts.

ASML shares have fallen about 20 percent over the past month as part of a broader technology sell-off on fears the U.S. economy may be on the brink of recession, a concern further stoked by Intel's quarterly results on Tuesday.

SNS Securities analyst Victor Bareno said ASML's comment that it was "well positioned for robust revenues" in the first half of 2008 was more cautious than its previous outlook, reflecting uncertainty about the macro-economic climate.

ASML also said it expected to nearly double sales for its leading-edge immersion systems, which allow chip makers to produce ever smaller chips, in 2008 from 2007.

"That's positive because it is the main driver for ASML, and gives a little bit more visibility for these revenues," Bareno said.

Fourth-quarter bookings were worth 803 million euros ($1.2 billion), down from 857 million euros in the previous quarter, when a high percentage of bookings were for ASML's top immersion machine. Analysts on average had expected the order value to rise to 888 million euros.

Volatile Capital Spending

Sales rose 3.5 percent from the third quarter to 973 million euros and net profit was up 22 percent at 206 million, helped by a 35 million-euro tax benefit. Analysts on average had expected both sales and net profit to fall from the third quarter.

ASML, the world's largest maker of semiconductor lithography machines that competes with Japan's Nikon and Canon, said that capital spending on second-tier memory makers was currently more volatile, but that its exposure to these customers was relatively low.

Samsung Electronics, the biggest maker of memory chips used in computers, cameras and music players and a key ASML customer, said on Tuesday it planned to keep its memory capital spending broadly stable in 2008, which analysts said was positive for ASML.

"Although independent market researchers still expect a double-digit increase in demand for integrated circuit units in 2008, which should translate into lithography market expansion in 2008, we are awaiting confirmation of this potential growth through the exact level of Q1 and Q2 bookings," ASML Chief Executive Eric Meurice said in a statement.

ING analyst Marcel Achterberg said ASML's outlook for first quarter shipments of 50 systems with an average selling price of 16.3 million euros was below his forecast for 58 systems.