ASM International Warns of Slower End to Year as Demand Falters — 2nd Update

By Najat Kantouar and Mauro Orru

ASM International cut its revenue forecast for the year due to lower-than-expected demand for semiconductor-making equipment as some clients are shying away from orders.

The Dutch company provides tools--mostly for the deposition of thin films--that chip makers need to produce increasingly sophisticated semiconductors as demand for smaller but more efficient chips to power artificial intelligence keeps booming.

But while AI demand shows no sign of abating, the company said appetite for logic and foundry orders--those from customers seeking to produce integrated circuits that power smartphones, computers and other electronic devices--had declined recently. Weak logic and foundry orders had already weighed on ASM International in the second quarter.

The company also said demand in the power, wafer and analog markets was sluggish. The group cited a mixed picture per customer, a sign that some clients aren't rushing to place orders as they deal with internal woes and navigate President Trump's tariffs.

Beleaguered chip-making giant Intel said in July that it would cut 15% of its workforce and scrap plans to spend tens of billions of dollars on new chip facilities in Europe in a bid to revive its sagging fortunes.

Meanwhile, Samsung Electronics said its semiconductor earnings fell sequentially for a fourth consecutive quarter, hurt by U.S. curbs on chip exports to China and delayed sales of advanced high-bandwidth-memory products to Nvidia.

UBS analysts wrote in a note to clients that Intel and Samsung likely contributed to ASM International's move to cut guidance.

For the year, the group now expects revenue growth at constant currencies at the lower end of a previous range of 10% to 20%.

In the second half, revenue should be 5% to 10% lower compared with the first half at constant currencies, reflecting weaker demand in the fourth quarter. For bookings, lower demand is projected to result in a book-to-bill below 1 in the second half, it added.

The company's guidance cut will likely lead to consensus downgrades, JP Morgan analysts wrote in a note to clients. The U.S. bank anticipates full-year consensus estimates to decline by around 4% in sales and close to 6% in earnings. "Estimates for 2026, which were considered too high, are likely to be reset, while the medium-term outlook is positive," they added.

ASM International shares in Amsterdam slid more than 5% earlier on Tuesday as investors factored in new guidance for the short term. However, the group said it expected sales to grow in the coming years, boosted by AI.

"The semiconductor market is on track to reach $1 trillion by the end of the decade, driven by lasting megatrends, especially AI," Chief Executive Hichem M'Saad said.

The company expects revenue to exceed 5.7 billion euros ($6.73 billion) by the end of the decade. Its gross margin, a closely watched metric for companies operating in the semiconductor industry, is expected to range from 47% to 51% in 2030. Free cash flow should increase to more than 1 billion euros by then.

Write to Najat Kantouar at najat.kantouar@wsj.com and Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

September 23, 2025 06:57 ET (10:57 GMT)