By Mauro Orru

ASM International posted orders above analysts' expectations in the third quarter as chip makers splurged on tools to produce increasingly sophisticated chips to power artificial-intelligence features in new devices.

The Dutch company booked 815.3 million euros ($881.6 million) in orders, up 30% on year at constant currencies. Analysts had forecast 776 million euros in orders, according to consensus estimates by Visible Alpha.

ASM International provides tools--mostly for the deposition of thin films--that chip makers need to produce semiconductors, particularly as demand for smaller but more efficient chips to power artificial-intelligence features is on the rise.

The group said customers continued to place orders for so-called gate-all-around technology. The industry is pivoting away from classical transistors to gate-all-around versions that provide better electrical signals and improved chip performance.

Meanwhile, the company said demand for high-bandwith memory--where AI is fueling investments--remained solid. AI is increasingly driving demand for the most advanced devices, it said.

The surge in orders for the company comes two weeks after larger rival ASML Holding cautioned that while demand for artificial-intelligence chips remained strong, the recovery for some areas of the semiconductor industry could extend well into next year.

The warning wiped out more than $60 billion in ASML's market value, weighing on other semiconductor stocks globally as investors fretted about a prolonged downturn in demand.

ASM International echoed its rival's warning on Tuesday, saying that AI continued to dominate the industry, though the recovery in other markets such as personal computers and smartphones remained sluggish, while the automotive and industrial sectors were still navigating a downturn.

Quarterly revenue at ASM International increased 26% on a constant-currency basis to 778.6 million euros, beating analysts' forecasts and coming in at the higher end of company guidance. For the fourth quarter, the group is forecasting revenue of 770 million to 810 million euros.

The company said orders in the current quarter should be solid, but lower than in the third quarter.

Net profit slipped to 127.9 million euros from 129.6 million euros, below analysts' expectations. Gross profit--a closely watched metric for companies operating in the semiconductor industry--came in at 384.42 million euros, generating a 49.4% margin.

The company said it expects revenue in the second half to grow slightly more than 15% from the nearly 1.35 billion euros it reported for the first half. For the whole year, the group is forecasting revenue growth of roughly 10%.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

October 29, 2024 13:54 ET (17:54 GMT)

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