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To: Frederick Langford who wrote (3387)	7/5/2001 3:23:17 AM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

ASML/1H -3: No Recovery In Chip Market Seen In 4Q ASML said that second quarter revenues at SVG - which it now refers to as ASML USA - would fall by more than 40% from a quarter earlier, against earlier guidance of a 30%-40% fall, "resulting in a net loss for ASML USA in the first half." "Furthermore, order push-outs and cancellations resulted in a sudden and sharp decline in the order backlog and shipments in the second quarter," ASML said. It said that especially demand for older lithography systems had been impacted, leading to excess inventory. "Based on its sales and market forecast for these tools, ASML USA will incur obsolescence costs on the order of approximately $50 million," the company said. In a statement, ASML Chief Executive Doug Dunn said that recent conversations with customers had lead him to believe that the semiconductor market is not likely to recover in the fourth quarter, as he had previously believed. "This means that this year's demand for our mainstream products could be lower than previously anticipated," he said. He said the total number of systems sold by ASML Europe - ASML ex-SVG - "could" fall below 230 systems, in contrast to ASML's most recent guidance of between 230 and 270 systems sold. ASML's lithography systems, which are used to map out circuitry of computer chips and cost around $8 million per machine, are its key product. He noted that demand for ASML's newest systems remains strong. He said ASML is carrying out "additional programs across all divisions to reduce costs and save cash." "This includes measures related to discretionary spending, staffing levels and capital expenditure plans," he said. ASML reports first half earnings July 18, and will hold a conference call to answer questions. Company Web site: www.asml.com -By Toby Sterling, Dow Jones Newswires: 31-20-626-0770; toby.sterling@dowjones.com -0- 05/07/01 07-19G (END) DOW JONES NEWS 07-05-01 03:19 AM * end of story *