ASM International, a leading supplier of semiconductor equipment, announced its financial results for the second quarter of 2023.
ASM International reported a notable 21 percent rise in revenue, reaching €669 million. However, the positive revenue growth was overshadowed by a significant drop in new orders, which fell by 48 percent to €486 million compared to the same period last year.
The decline in new orders was attributed to softening market conditions, as well as delays in leading-edge logic/foundry orders, which were mentioned in the Q1 2023 report.
Benjamin Loh, President and CEO of ASM International, stated that the lower order intake was mainly impacted by weakening demand and delays in customer fab readiness. Additionally, there was a further normalization of the backlog, following improved supply chain conditions compared to the relatively elevated levels observed in 2022.
Despite the challenging market environment, ASM International managed to improve its gross margin year on year, reaching a solid level of 49 percent in Q2. However, it is worth noting that the margin decreased compared to the exceptionally high level recorded in Q1. The positive mix and an increased contribution from the Chinese market played a role in supporting the gross margin.
Looking ahead, ASM International is cautiously optimistic about the coming months. The memory market continues to face weakness, and logic/foundry orders also dropped in Q2. The company does not anticipate a recovery in the memory market for the rest of the year.
Nevertheless, ASM remains confident in its position for the next nodes, particularly as logic/foundry customers prepare for the transition to gate-all-around (GAA) device technology. This transition is expected to drive a meaningful double-digit increase in served available markets for ASM, with a continued leadership in atomic layer deposition (ALD) and potential share gains in silicon epitaxy (Epi).
For Q3 2023, ASM International projects revenue in the range of €580-620 million, with expectations of a drop in orders compared to Q1 levels. The company maintained its forecast for the second half of the year, expecting a revenue decrease of 10 percent or more compared to the first half. However, it remains optimistic for the full fiscal year, projecting a single-digit percentage increase in revenue compared to the previous year.
In the broader market context, ASM International predicts a mid-to-high-teens percentage drop in wafer fab equipment (WFE) for 2023. This decline is primarily driven by a sharp drop in memory WFE and the impact of push-outs and weaker market conditions on leading-edge logic/foundry equipment. However, the trend in mature node spending appears to be more positive. Despite the challenging market outlook, ASM aims to outperform the WFE market this year.
ASM International’s ability to navigate through the current market challenges while maintaining a solid revenue growth indicates its resilience and strategic positioning in the semiconductor equipment industry.
