ASML quadruples profits in 4Q, sees strong business in 1H07

January 17, 2006 – Lithography tool vendor ASML says its profits surged fourfold in 4Q06 from a year ago to about $265 million on record revenues, and expects to continue the good news with ” healthy” order levels in 1Q07 and a yearlong ramp-up of 45nm volume manufacturing utilizing immersion lithography.

Net income was 205.5 million euros (about US $265.2 million) vs. 51.6 million euros in 4Q05. Sales almost doubled to 1.07 billion euros ($1.38 billion) year-on-year. Compared with 3Q06, net sales rose 11%, while net income was up almost 20%.

406 net bookings were 1.09 billion euros, encompassing 84 systems (74 new systems), swelling the backlog to a record value of 2.15 billion euros (163 lithography systems). New system average selling prices (ASP) during the quarter rose 6.5% to 14.7 million due to a product mix favoring advanced ArF systems. For all ASML systems, 4Q06 ASPs rose about 12.4% to 13.6 million euros.

For the full year, ASML doubled its profits to 642.7 million euros ($806.3 million) on 42% higher sales of 3.60 billion euros ($4.65 billion).

ASML’s 42% sales growth outpaced the overall semiconductor litho equipment market’s 34% growth, noted Eric Meurice, president and CEO, adding that the company also improved profitability and generated significant cash, some of which it used to partly to buy back 8.3% of its outstanding shares.

Looking ahead into 2007, ASML sees a bright future ahead thanks to the expected ramp of immersion lithography in 45nm volume manufacturing, and a frontloading of flash memory capacity buildup in 1H07 that will result in “strong uptake” of the company’s Twinscan XT:1900i systems in 2H07, Meurice noted. Roughly two-thirds of the company’s backlog is slated for shipment in 1H07.

To support its growth expectations, ASML says it is tacking on an additional 150 million euros in capital expenditures for the year, bringing the total to 250 million euros. The company also is increasing its R&D budget to 115 million euros (net of credit) to “continue to strengthen ASML’s technology leadership and expand lithography growth.”


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