"ASM Lithography NV has received two orders that might signal the start of a recovery in the market for dynamic random-access memory chips."
ASML Gets Samsung, Motorola Orders
And Says Chip Industry May Rebound
Dow Jones Newswires
AMSTERDAM -- ASM Lithography NV has received two orders that might signal the start of a recovery in the market for dynamic random-access memory chips.
The Dutch maker of semiconductor equipment said on Friday that the orders from Samsung Corp. of South Korea and Motorola Inc. of the U.S. total between 300 million guilders and 350 million guilders ($152.9 million and $178.4 million).
Samsung's order, valued at between 200 million guilders and 250 million guilders, is among the largest ever received by ASML. The Motorola order is valued at more than 100 million guilders, ASML said.
ASML makes scanners and so-called wafer steppers, machines that etch patterns onto silicon to make computer chips. The company has been suffering from the Asian financial crisis and an extended slump in the market for computer chips. In 1998, ASML's net profit fell 58%.
The Samsung order, ASML said, could indicate that an industry turnaround is under way.
"We believe this order ... might be an early sign of the DRAM market's stabilization and recovery," said Dave Chavoustie, ASML's vice president of world-wide sales.
"In fact, it is a very good sign for the industry," said Jan Coen Balt, an analyst with Effectenbank Stroeve in Amsterdam. "Samsung is among the most aggressive of DRAM memory-chip producers, so it isn't a surprise that it would be among the first to bet that the recovery has begun."
The Samsung and Motorola orders consist of numerous advanced photolithography systems, the most-expensive equipment made by the Dutch company. ASML began shipping the Samsung order to Korea earlier this month, and the Motorola systems will be installed at plants in Texas and Arizona.
The orders help confirm an ASML forecast issued in mid-January, when the company said it expected demand for the high-end machines to be strong in 1999 and beyond. The orders also put pressure on Nikon Corp. and Canon Inc., two Japanese rivals of ASML that have lost market to the Dutch company in recent years.
ASML's shares rose to 40.15 euros ($45.09) on Friday, up 15 cents each in reaction to the orders.
The stock benefited from the size of the Samsung order, said Wouter de Ridder, an analyst with Kempen & Co. "It was already known that Samsung would make an order," he said. "However, that it was larger-than-expected is obviously positive."
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