Dutch Chip Equipment Supplier ASM Slashes H2 Revenue Forecasts Despite Steady Q3 Sales Performance

ASM just delivered a classic semiconductor industry plot twist—solid quarterly numbers followed by gloomy guidance.

Behind the Q3 Steady Performance

The Dutch equipment maker posted respectable third-quarter sales that met expectations, showing resilience in the face of ongoing supply chain headaches. But here's where it gets interesting—they simultaneously cut their second-half revenue forecasts, signaling deeper concerns about market demand.

Forecast Cuts Speak Louder Than Current Numbers

While the Q3 figures suggest temporary stability, the revised H2 outlook reveals management's real concerns. They're seeing something in their order books that isn't showing up in the current sales data—probably that same old story of clients getting cold feet about capital expenditures when economic uncertainty hits.

Another quarter, another reminder that semiconductor stocks move on guidance, not trailing numbers—but Wall Street will still act surprised when the downgrades roll in.

Market watchers are perplexed at the soft outlook

The company said sales in the last half of its trading year WOULD be 5 to 10% lower than the previous half at constant rates. This resulted in ASM shares falling about 5.9% in the early morning trade in Amsterdam, although it had forecast a flat performance.

ASML Holdings jumped 3.7% as Morgan Stanley upgraded it to “Overweight” with a price target of €950 supported by AI demand and semiconductor recovery, as recently reported by Cryptopolitan.

ASM said the third quarter matched expectations, but a dip in the final quarter now looks unavoidable.

“This is due to lower-than-expected demand in leading-edge logic and foundry, with a mixed picture per customer, as well as lower demand in the power, wafer and analogue markets.”

ASM.

The warning came as a surprise to some analysts, given that Taiwan’s TSMC, the world’s biggest contract chipmaker, is pressing ahead with new processes that use ASM’s tools.

“This could be the result of weakness at ASM’s other big customers, Intel and Samsung,” said Michael Roeg at Degroof Petercam. The new projections

The revision means full-year growth will be at the bottom of the company’s earlier forecast of 10 to 20%. In 2024, revenue grew 12% to €2.93 billion (£2.5 billion).

ASM already moving on to 2030 targets

ASM is projecting 2030 revenue to surpass €5.7 billion. The company also narrowed its 2027 guidance to €3.7 billion–€4.6 billion, compared with €4 billion–€5 billion previously, reflecting currency effects. Analysts surveyed by LSEG had forecast around €4.1 billion. It also expects to maintain operating margins above 30% with compound annual growth of at least 12%

ASM’s CEO Hichem M’Saad is still hopeful despite the setbacks.

“The semiconductor market is on track to reach $1 trillion by the end of the decade, driven by lasting megatrends, especially AI,” he said.

ASM said its strategic priorities lie with the atomic LAYER deposition (ALD), which it views as its growth driver and the single-wafer ALD market is expected to grow from $3 billion last year to between $5.1 billion and $6.1 billion by the year 2030.

The tech firm said in another Core area of epitaxy (Epi), it has gained share in the leading edge. The market is expected to expand from $1.5 billion to as much as $3.2 billion over the same period.

The company also sees fresh opportunities in logic and foundry, especially with the industry shift to gate-all-around (GAA) technology. ASM estimates its potential sales in this area could rise by as much as $500 million with the MOVE to 1.4 million chips.

Management also pointed to growing prospects in memory chips, with new DRAM technologies expected to boost demand for its equipment. Also, another new strategic growth drive, ASM said advanced packing which helps in stacking and connecting chips more efficiently.

Paul Verhagen, the group’s finance chief, told investors the company was sharpening efficiency measures to protect margins while expanding its manufacturing base and investing in staff.

“These initiatives will keep us ahead of what’s next and deliver sustainable value for all stakeholders,” he said.

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