ASM International NV (ASM) announced a positive performance for the second quarter of 2024, with a 6% increase in revenue year-on-year to EUR 706 million.
The growth was primarily driven by a 20% increase in parts and services revenue and a 4% increase in equipment revenue, attributed to strong ALD deliveries. The company’s order intake increased 56% year-on-year to €755 million, with memory orders driving the expansion.
ASM International’s strategic focus remains on expanding its positions in the ALD logic/foundry and memory markets, while investing in research and development (R&D) and infrastructure. The semiconductor market is expected to reach the €1 trillion mark by the end of the decade, driven by digitalization and electrification trends.
Main lessons
- ASM International’s second-quarter revenue increased 6% year-on-year to EUR 706 million.
- The company’s order intake for Q2 was EUR 755 million, an increase of 56% compared to the previous year.
- Strategic priorities include strengthening positions in the ALD logic/foundry and memory markets, as well as investing in R&D and infrastructure.
- The global semiconductor market is expected to reach €1 trillion by the end of the decade.
- ASM International forecasts third-quarter revenue of €740 million to €780 million, with a 15% increase in the second half.
- The company remains confident in its growth strategy despite the difficulties encountered in the Chinese market.
Company Outlook
- ASM International expects third-quarter revenue of between €740 million and €780 million.
- Sales in the second half of the year are expected to increase by around 15% compared to the first half.
- The company maintains its revenue forecast for next year, estimating that it will be between 3 and 3.6 billion euros.
Bearish Highlights
- The company noted a decline in sales in China, particularly in the mature logic/foundry segment.
- Bookings and sales in China are expected to decline further in the second half.
- Demand is weak in the 3D NAND market, although a gradual improvement is expected.
- Silicon carbide epi market conditions weakened in the second quarter, and the market is expected to slow for the full year.
Positive Highlights
- Significant order intake in the second quarter, particularly in the memory sector.
- The company was selected by the three main customers in the silicon epi market.
- High demand for high-bandwidth memories used in complex AI computing.
- Double-digit growth expected for silicon carbide sales this year.
Failures
- Slowdown in sales in China and worldwide for the power, analog and wafer segment.
- Potential decline in silicon carbide technology in 2024 due to slowdown in electric vehicle adoption.
Q&A Highlights
- Hichem M’Saad confirmed that he is on the same entity list as his American counterparts in China.
- The company expects a “reasonable portion” of HBM orders to be delivered in 2024 and 2025 to be fulfilled in 2025, with some deliveries in 2024.
- High-k metal gate technology is increasingly being used in high-performance memory products.
ASM International’s strong Q2 2024 results reflect the company’s strategic focus on expanding its market positions and investing in future technologies. While there are challenges ahead, particularly in the Chinese market, ASM International’s confidence in its growth strategy and the potential of the semiconductor market suggests a promising outlook for the company.
InvestingPro Perspectives
ASM International NV (ASMIY) demonstrated resilience with a strong performance in the second quarter of 2024, demonstrating its ability to navigate the dynamic semiconductor landscape. To provide additional context to ASM’s financial health and market position, let’s look at some key metrics and outlooks from InvestingPro.
InvestingPro data shows that ASM International has a market cap of $32.49 billion, which illustrates its significant presence in the industry. The company’s P/E ratio stands at 54.14, which indicates a high market valuation, which could reflect investors’ confidence in its future earnings potential. However, it is important to note that the P/E ratio is slightly adjusted to 53.3 when considering the trailing twelve months as of Q2 2024. Furthermore, the company saw a slight revenue decline of 4.18% during the same period, which investors should monitor in relation to the company’s overall growth trajectory.
Two InvestingPro Outlooks offer additional insights: First, analysts have upgraded their earnings for the coming period, suggesting that ASM International’s financial outlook could improve. Second, the stock has suffered a sharp decline over the past week, which may present a buying opportunity for investors who believe in the company’s long-term strategy and market position.
For readers interested in a more in-depth analysis, there are 19 other InvestingPro Tips available for ASM International, which can be viewed on the InvestingPro platform. To enhance your investment research with these tips, use the coupon code PRONEWS24 to get up to 10% off an annual Pro subscription and an annual or bi-annual Pro+ subscription.
Overall, while ASM International faces challenges, particularly in the Chinese market, the company’s strategic investments and market responsiveness position it well to capitalize on the long-term growth of the semiconductor industry.
This article was generated and translated with the help of AI and reviewed by an editor. For more information, see our T&C.
