ASML’s factory fire may have hit output of key chip machines


Chip maker ASML is attempting to minimise the impact a fire at its Berlin plant, feared to further clog the global backlog on chips. — Bloomberg

ASML Holding NV said the fire at its Berlin plant affected part of the production area for some of its key machines and is working to determine how to minimise the potential impact on output.

The Berlin site makes various parts for its advanced extreme ultraviolet lithography machines, needed to make cutting-edge chips that are faster, cheaper and more efficient. ASML has a de-facto monopoly producing EUV machines for companies like Taiwan Semiconductor Manufacturing Co. and Samsung.

"We are still in the process of completing the recovery plan for this production area and determining how to minimise any potential impact for our EUV customers, both in our output plan and in our field service,” the company said in a statement Friday after a fire forced the semiconductor-equipment maker to shut part of its German manufacturing site earlier in the week.

Despite some disruption regarding components of deep ultraviolet, or DUV, lithography systems, ASML expects "to remediate this in such a way that it will not affect” DUV output and revenue plan, said the company.

"Our Metrology and Inspection output plans are not affected as they do not contain any components made in Berlin.”

Analysts were concerned the fire could exacerbate a global chip shortage that for months has slammed growth in industries that span the economy. ASML said it will provide a further update on the incident on Jan 19, when it will present its fourth quarter and 2021 results.

Citigroup Global Markets analyst Amit Harchandani said Ebit could drop by around 1% if the company failed to deliver one EUV system of the 55 planned..

"However, it is worth noting that assuming unchanged demand backdrop, any loss of EUV revenue in 2022 could likely imply upside for 2023,” he said.

If there were a 10% drop in shipments due to the fire, that "could temporarily reduce global supply of lithography tools by around 8.4%, as ASML has 84% market share in the tools,” Bloomberg Intelligence analyst Masahiro Wakasugi said earlier this week. "This could extend the global chip-supply shortage.”

ASML shares were 1.4% higher at 3:03pm in Amsterdam on Friday, snapping declines for four days since the fire was reported on Jan 3.

Lead times for chips – a closely watched gap between when a semiconductor is ordered and when it is delivered – increased by six days to about 25.8 weeks in December compared with November, according to research by Susquehanna Financial Group.

That lag marks the longest wait time since the firm began tracking the data in 2017. – Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Tech News

Big tech ad revenue growth to taper as pandemic bubble pops -analyst
Instagram down for thousands of users - Downdetector
CD Projekt's first-quarter profit more than doubles
Student in SG, 16, made to fake kidnapping for ransom in China officials’ scam
Musk sued by Twitter investors for delayed disclosure of stake
Get your crypto house in order, old guard tells Davos debutantes
Fintechs fail to make a dent in Mexico as cash remains king
Joby receives FAA nod to start air taxi services commercially
Chipmaker Broadcom to buy VMware in $61 billion deal
US Embassy lends a helping hand in empowering Malaysian game creators

Others Also Read