ASM International Surges on Strong AI-Driven Demand and Raised Forecasts

ASM International Reports Strong Q3 Performance

ASM International, a Dutch semiconductor equipment manufacturer, has reported a surge in orders and raised its sales forecasts, driven by the growing demand for artificial intelligence (AI) chips. The company's shares jumped more than 5% in European morning trading following the announcement 1

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Record-Breaking Orders

In the third quarter, ASM International booked orders worth €815.3 million ($882.1 million), marking a 30% year-on-year increase at constant currencies. This figure significantly surpassed analysts' expectations of €776 million, according to consensus estimates by Visible Alpha 2

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AI-Driven Demand

The company attributes this strong performance to the increasing demand for sophisticated chips powering AI technologies. ASM International provides critical tools, primarily for thin film deposition, which are essential in producing advanced semiconductors 3

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Gate-All-Around Technology and High-Bandwidth Memory

ASM International reported continued orders for gate-all-around technology, representing a shift from classical transistors to more efficient versions that offer improved chip performance. Additionally, the company noted solid demand for high-bandwidth memory, an area where AI is fueling significant investments 1

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Raised Forecasts

In light of these positive results, ASM International has raised its sales forecasts:

1. For the second half of 2023, the company now expects revenue growth to slightly exceed 15% from the €1.35 billion reported in the first half.
2. For 2024, ASM International projects revenue between €3.2 billion and €3.6 billion, an improvement from the previous guidance of €3 billion to €3.6 billion 1

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Financial Performance

• Q3 Revenue: €778.6 million, up 26% year-on-year at constant currencies
• Q4 Revenue Forecast: €770 million to €810 million
• Net Profit: €127.9 million, slightly down from €129.6 million in the previous year
• Gross Profit: €384.42 million, with a 49.4% margin 2

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Industry Context

While ASM International's results paint a positive picture for AI-related chip demand, the company echoed warnings from its larger rival, ASML Holding, about sluggish recovery in other semiconductor markets. The personal computer, smartphone, automotive, and industrial sectors continue to face challenges 4

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Market Response

ASM International's shares rose more than 5% following the announcement, with the stock up over 40% in the past 12 months. This positive response contrasts with the recent market reaction to ASML's cautionary outlook, which had negatively impacted semiconductor stocks globally 1

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