April 17, 2019 / 6:12 AM / 8 months ago

UPDATE 2-ASML expects faster growth as China chipmakers drive demand

* Analysts say company upbeat on China memory demand

* ASML repeats sales to grow in full year despite Q1 dip

* Shares rise, have rallied 35 percent this year (Updates with share move, analyst quote)

By Toby Sterling

AMSTERDAM, April 17 (Reuters) - ASML reported a better-than-expected first quarter profit on Wednesday and said it expects growth to accelerate, thanks in part to demand from Chinese chipmakers, lifting shares in the Dutch semiconductor equipment maker.

ASML, whose machines are used by all major chipmakers, including Samsung, TSMC and Intel, said its net profit was 355 million euros ($401 million) for the quarter, down from 581 million euros in the same period a year ago but well above analyst estimates of 197 million euros.

Chief Executive Peter Wennink said ASML had shipped more of its newest and most expensive lithography systems, which are used to map out the circuitry of computer chips, than expected.

“The outlook for the remainder of the year remains unchanged, as we see accelerating growth through 2019 on the back of significant technology transitions, primarily in logic chips”, Wennink said in a statement.

Barclays analysts, who have an “overweight” rating on ASML shares, said in a note that ASML remains optimistic on demand for equipment from memory chip makers, despite scepticism.

A glut in memory chips has hurt manufacturers including the world’s biggest, Samsung, which is heading for its lowest quarterly profit in more than two years.

But investors are hoping for a recovery in chip prices in the second half.

ASML said end demand for its customers’ products was being “driven by strong growth in the automotive, industrial and Internet of Things market segments” and forecast second quarter sales of between 2.5 billion and 2.6 billion euros.

First quarter sales, which ASML in January said would suffer due to a fire at a supplier, fell to 2.23 billion euros from 2.29 billion euros a year earlier. Analysts polled by Reuters had forecast sales at 2.12 billion euros.

ASML’s stock was up 2.8 percent to 185.28 euros at 0845 GMT in Amsterdam, and has rallied by 35 percent so far in 2019.

Last week, ASML disclosed it had been the victim of an intellectual property theft after a Dutch newspaper report, but said the impact was not material on earnings.

Wennink repeated on Tuesday it had “found no evidence of any connection with the Chinese government” in the incident.

The CEO told Reuters in January he saw no let up in demand from China, despite an economic slowdown. ASML’s sales to China more than doubled to 1.8 billion euros in 2018 and accounted for about a sixth of ASML’s total, as Beijing pushes its domestic semiconductor industry. ($1 = 0.8846 euros) (Reporting by Toby Sterling; Editing by Gopakumar Warrier, Uttaresh.V and Alexander Smith)

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