ASML in gloomy forecast

July 18, 2001 Posted: 0801 GMT

LONDON (CNN) -- The world's largest semiconductor equipment maker ASML said on Wednesday it expected the industry to stay in the doldrums well into 2002.

The Dutch company made the forecast as it reported a first-half loss, including one-time items, of 96 million ($82 million), or 0.20 a share, compared with a profit of 149 million, 0.32 per share, a year ago.

ASML issued a profit warning on July 5, saying customers were delaying or canceling orders and it no longer expected an upturn in its fortunes in the fourth quarter of this year.

The company is the key barometer of the health of the chip industry as it makes the equipment that allows microchip makers to photographically imprint complex circuitry patterns on silicon wafers to create the chips.

ASML, which posted a 24 percent decline in first-half sales to 1.01 billion,  said in its earnings statement it now saw no recovery in the industry before the second half of 2002.

"As far as we can see now, the upturn will not happen before the second half of next year, which means that we are taking measures now to protect our bottom line against the consequences," ASML said.

Tech companies and chipmakers have issued a stream of profit warnings this year. Since June,  Europe's three largest chipmakers French-Italian company ST Microelectronic (PSTM), Germany's Infineon Technologies (FIFX) and Dutch company Philips Electronics have reduced earnings and sales forecasts.

ASML's earnings were in line with its July 5 forecast of  a net loss of 95 million to 105 million.

ASML has said it expects to ship fewer than 230 units this year of its chipmaking machines,  which sell for about 10 million to 12 million each. Many analysts have pencilled in around 190 to 200 units.

Philips Electronics, which on Tuesday said it could report its first annual loss in nine years as the downturn in the chip and telecoms sectors accelerates, holds a minority stake in ASML.

Shares in ASML rose 2.4 percent on Wednesday in Amsterdam trading to 23.9, compared with a year-high of 32.32 on January 24.

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