ASML's third-quarter performance grew steadily, but memory chips are still full of uncertainty

Recently, lithography machine giant ASML released its third-quarter results, showing net sales of 2.987 billion euros and net profit of 627 million euros, up 16.3% and 31.7% year-on-year respectively.

Gross profit in the third quarter was 1.307 billion euros, compared with 1.105 billion euros in the same period last year; gross profit margin was 43.7%, higher than 43% in the same period last year. In addition, it was announced that net bookings in the third quarter were 5.111 billion euros, a sharp increase of 80.7% from 2.828 billion euros in the same period last year.

The company expects net sales of approximately 3.9 billion euros in the fourth quarter, with a gross margin of 48%-49%. R&D costs are approximately 500 million euros, sales and administrative expenses are approximately 135 million euros, and the estimated annualized effective tax rate in 2019 is approximately 7%.

ASML's net bookings in the third quarter were 5.1 billion euros, almost double that of the second quarter.

But the memory chip industry remains fraught with uncertainty, and ASML cannot predict the timing of a recovery. The company said its memory customers continue to digest inventory in the supply chain amid weak demand, which is partly driven by the current macroeconomic environment.

As semiconductor design companies develop 7nm and 5nm advanced nodes, the requirements for chip manufacturing equipment are more stringent, and the EUV launched by ASML just makes up for this.

The devices are planned for advanced node processes at 7nm logic and above, as well as insertion into 1z and 1a DRAM production.

The company's CEO Peter Wennink said at the second-quarter earnings conference that despite the weakness in the memory business, strong logic sales are expected to drive total revenue growth this year.