ASM’s Stronger Revenue Outlook Draws Tepid Investor Response

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Or sign-in if you have an account.(Bloomberg) — ASM International NV failed to impress investors despite an upbeat revenue forecast for the current quarter, underscoring heightened market expectations for companies benefiting from the AI spending boom.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe Almere, Netherlands-based company forecast revenue of €1.1 billion ($1.3 billion) for the three months through September on a constant currency basis, with the range of 5% above or below that level, it said Tuesday in a statement. That compares with the average analyst estimate of €1.04 billion, according to data compiled by Bloomberg.It also raised its forecast for 2027 revenue to “exceed the top end” of a prior target range of €3.7 billion ($4.2 billion) to €4.6 billion. That could fall short of the average analyst estimate of €4.93 billion, according to data compiled by Bloomberg.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe shares fell as much as 8.9%, with ASM the worst performer on the Stoxx Europe 600 Technology Index. A broader selloff has rocked chip stocks this week, triggered by signs that China is growing more competitive in the industry.“The market, of course, is worried about the sustainability of AI-driven spending to which the company is exposed and expectations are high,” JPMorgan Chase & Co. analysts said in a note. “Once the dust settles on the current market turmoil, we expect this report to be seen as a strong set of numbers,” they said.ASM makes tools that deposit thin layers of film on wafers, a step that’s essential in the chip-making process. The shift to advanced technology nodes and more complex chip architectures involving more layers is also driving demand for its ALD and Epi technologies. The company has said makers of cutting-edge chips used for AI will fuel its business this year, as it expands manufacturing capacity to meet demand.Taiwan Semiconductor Manufacturing Co., one of ASM’s top customers that makes advanced logic chips for customers such as Apple Inc. and Nvidia Corp., boosted its capital expenditure outlook to as much as $64 billion for this year. It anticipates significantly higher spending over the next three years. “The need for leading-edge technology is going to continue unabated for a company like us,” Chief Executive Officer Hichem M’Saad said Wednesday in an interview on Bloomberg TV. “We look into the long term, and the fundamentals are very, very strong for us and for the industry.” ASM expects revenue for the second half of the year to rise by more than 20% compared with the prior six months. That’s also being driven by demand in its memory chip business.Revenue last quarter came in at €1 billion due to demand from makers of advanced chips, rising sales of equipment to make high-bandwidth memory chips and healthy sales to makers of earlier-generation chips to China, according to the statement. Net income was €285.4 million in the period, beating an average analyst estimate of €267.4 million.“We are actually at the sweet spot of the semiconductor industry, and the materials that we develop makes the chips faster, makes them more efficient, using less energy and they make them also have higher density of storage,” M’Saad said.—With assistance from Anna Edwards, Lizzy Burden and Michael Msika.(Updates with investor reaction and CEO comments from first paragraph.)This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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