(Bloomberg) -- ASML Holding NV’s net sales forecast for the first quarter fell short of analyst expectations, due to its continued decision to delay testing its machines in a bid to speed up deliveries.
Europe’s largest semiconductor equipment maker said Wednesday it predicts sales of 3.3 billion euros ($3.7 billion) to 3.5 billion euros for the first quarter compared with an estimate of 5.36 billion euros in a Bloomberg analyst survey.
“Approximately €2 billion worth of sales that are expected to ship in the first quarter are not included in this number, and will be recognized in subsequent quarters after formal customer acceptance tests are completed in the field,” ASML said in a press release.
ASML’s delayed sales highlights how the chip supply chain crisis is having unintended consequences. The company began skipping some final testing in its factories last year to speed up delivery. This means clients get their machines quicker, but ASML has to delay booking sales.
ASML added that it doesn’t expect a factory fire in Germany to disrupt output. The fire was extinguished within two hours, and the company still expects to ship about 55 EUV systems this year.
“We were able to put the fire out in a couple of hours, but still there was significant damage,” said ASML Chief Executive Officer Peter Wennink in a statement on Wednesday. “But because of the hard work and the creativity, we currently believe that we can manage the situation and that we will not see a significant impact on our EUV output in the year 2022,” he said.
The company also said it was addressing the capacity bottleneck by hiring thousands of new workers. Wennink said ASML hired close to 6,000 people in 2021 alone. “Those people need to be trained, they need to get up the learning curve, and that will take time,” Wennink said. For context, the company had just over 30,000 employees as of October, according to data compiled by Bloomberg.
Maximum Capacity
The company has cornered the market on producing the extreme ultraviolet lithography equipment used by companies like Taiwan Semiconductor Manufacturing Co. and Samsung to make cutting-edge chips. The fire at its Berlin facility in early January raised concerns that any production disruption would exacerbate a global chip shortage.
“The demand is easily 40% to 50% above our maximum capacity, which I’ve never seen before,” Wennink said in an interview with Bloomberg TV after the earnings report. It will take “two to three years to get a nice balance between supply and demand,” he said, adding that the company will ship more machines in 2023 than this year.
Lead times for chips -- a closely watched gap between when a semiconductor is ordered and when it is delivered -- increased by six days to about 25.8 weeks in December compared with November, according to research by Susquehanna Financial Group. That lag marks the longest wait time since the firm began tracking the data in 2017.
ASML shares were up 1.4% as of 11:07 a.m. local time after gaining as much 1.7% in Amsterdam.
Key Figures
- In the fourth quarter, its net sales reached 5 billion euros, with gross margin of 54.2% and net income of €1.8 billion
- Delays booking sales of 2 billion euros in first quarter
- Dutch company raised its revenue guidance in September last year, predicting annual revenue in 2025 of about 24 billion euros to 30 billion euros and annual growth of around 11% this decade.
(Updates with chart and CEO comments in ninth paragraph, adds stock price.)
©2022 Bloomberg L.P.
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