ASM International and ALD opens up 2021 with a strong quarter in Logic & Foundry segment

ASM International N.V. (Euronext Amsterdam: ASM) today reports its first quarter 2021 operating results (unaudited) in accordance with IFRS.

• New orders at €411 million were 8% above the level of last quarter.
• Revenue for the first quarter of 2021 was €394 million and increased 14% compared to the previous quarter due to strong market demand.
• The gross profit margin was 49.5% in Q1 2021 compared to 45.2% in the previous quarter, mainly due to a favorable mix.
• The operating result was €125 million compared to €78 million in the previous quarter.
• Normalized net earnings for the first quarter of 2021 were €125 million, €43 million higher compared to Q4 2020.

LINKS

Q12021 Presentation: LINK

Earings Call Transcript (Seeking Alpha): LINK

• Gartner expects WFE to increase by 23% in 2021 (April 2021), up from +8% still predicted in December 2020
• VLSI Research expects WFE to increase by 22% in 2021 (April ’21), up from a previous forecast of +12% last February

“2021 started very strong for ASM,” said Benjamin Loh, President and Chief Executive Officer of ASM International. “In the first quarter, we realized revenue of €394 million, well within our guidance of €380-400 million and up 14% from the level in Q4. The revenue level was again driven by continuous high demand in the logic/foundry segment. Our Q1 order intake, at €411 million, was up 8% from an already high level in Q4 and ahead of our guidance of €380-400 million, driven by solid demand in logic/foundry. Our gross margin was at a high level of 49.5%, caused by a favorable mix, while our operational cash flow showed a record high level in Q1. Based upon the strong cash position at the end of March, we plan to start a new €100 million share buyback program.”

Outlook

For Q2, on a currency comparable level, we expect revenue of €390-€410 million. Q2 bookings, on a currency comparable level, are expected to be in the range of €420-€440 million.

“Based upon the current market developments, the wafer fab equipment (WFE) market is expected to grow by a high-teens to low twenties percentage in 2021.”

Based upon the current market developments, the wafer fab equipment (WFE) market is expected to grow by a high-teens to low twenties percentage in 2021. 2021 is expected to develop in another year of solid growth for ASM. Based upon our current view, we expect our sales in the second half to be at least at the same level as in the first half.

ALD and New Market segment

"Moving to the longer-term outlook, ALD continues to be an important, long-term growth market for ASM. For 2020, we estimate the single wafer ALD market, to reach the size of US$1.5 billion in line with the expectations we put out several years ago. We are currently reviewing our focus and expect to present the new market for customers later in the year. However, it is clear to us that ALD will remain the fastest-growing segment of the deposition market, with substantial, double-digit growth potential in the coming years. ALD is a critical technology for our industry to develop the next generation's faster processes and memory devices that in turn will enable the growth of key markets such as in 5G and artificial intelligence." - Benjamin Loh

DRAM and High-k/Metal Gate adaption with ALD

ASM's recent most significant achievement in expanding our memory presence has been in ALD wins for high-k metal gate in the high-performance DRAM segment, with the leading memory players. It is a key technology that reduces device leakage and thereby supports increases in both energy efficiency and device performance. As reported earlier, ASM books their first meaningful sales for this application last year and expects it to support a healthy increase in our DRAM sales this year.

What has been launched today is primarily what is called the high-performance DRAM segment or sub-segment within the DRAM market and it has been adopted by all the DRAM manufacturers.

ASM ALD Market Share

According to the information given in the call, Gartner report ASM´s market share in the single wafer ALD market has grown from 57% to 60% during 2020 and Benjamin Loh agreed that that estimate is in the right direction.