Comment
“ASM delivered good first quarter results. Revenue increased 40% at constant currencies to €710 million,” said Benjamin Loh, President and CEO of ASM. “Revenue exceeded previous guidance of €660-700 million due to some systems that were delivered in Q1 instead of Q2 at the request of customers, and supported by the strong order backlog at the end of Q4. Gross margin increased to 51% due to an exceptionally strong mix. With operating expenses under control, operating profit increased by 17% compared to previous quarter to a record high of €221 million. Supported by improved profitability, free cash flow increased to €155 million. At €647 million, orders in Q1 were still at healthy level, but down 6% at constant currencies year on year and reflected softening market conditions towards the end of the quarter.
Demand in the memory market further weakened in Q1 and is expected to remain at low levels in the remainder of the year. Logic/foundry demand for the advanced nodes is relatively more resilient, but recently we have also seen a number of push-outs in this segment reflecting softer end-market conditions and some delays in new customer fab readiness. These push-outs will impact our expected orders in Q2 and Q3. Following expected growth in the first half of the year, we expect a decrease in the second half sales of 10% or more compared to the first half, which is a lower level of revenue in the second half than we previously projected.
For the full year 2023, we expect revenue to show a single digit increase, at constant currencies and including the consolidation of LPE. This compares to overall wafer equipment spending which is now forecasted to decline by approximately a high teens percentage this year.
ASM remains well positioned for the next nodes. In logic/foundry we expect the transition to the next generation gate-all-around (GAA) technology to drive meaningful share of wallet gains, and to support our order intake as per the end of 2023.
Outlook
On a currency-comparable level, we expect revenue of a €650-690 million for Q2. Based on the current visibility, and reflecting aforementioned order push-outs, we project, following expected growth in the first half, a decrease in sales in the second half of 10% or more compared to the first half of the year.
Wafer fab equipment (WFE) is expected to drop by a high teens percentage in 2023, down from a previous forecast of a mid to high teens percentage drop. We expect to again outperform the WFE market this year.
Memory WFE is expected to decline by a significant double-digit percentage.
In the logic/foundry market, spending on the advanced nodes is still expected to be at a good level in 2023, but lower than previously expected, particularly in the second half of the year. This is partly offset by stronger market spending in the older node segments of the logic/foundry market.