The rapid rise of artificial intelligence is fueling demand for advanced chip manufacturing equipment, benefiting ASM International NV (ASM), which achieved double-digit year-on-year growth in orders and revenue in Q3, setting a quarterly revenue record. ASM’s stock rose over 7% at one point.

ASM International Q3 2024 Financial Highlights

New Orders and Backlog: In Q3, ASM received €815.3 million in new orders, marking a 30% year-on-year increase and surpassing analysts' expectations of €768.2 million. This growth was primarily due to strong demand for Gate-All-Around (GAA) and high-bandwidth memory (HBM) technology. The order backlog stood at €1.56 billion, slightly below the expected €1.59 billion.

Revenue: Revenue in Q3, at fixed exchange rates, reached €778.6 million, a quarterly record and a 26% year-on-year increase, hitting the upper end of the company’s guidance range of €740 million to €780 million.

Gross Margin: Q3 gross margin was 49.4%, surpassing the market forecast of 48.5%.

Operating Margin: Operating margin in Q3 reached 27.6%, above the expected 25.7%. Adjusted operating margin rose to 28.2% from 25.3% in the previous year, supported by a one-time gain of €7 million from the sale of a building.

Following the earnings release, ASM ADR shares rose as much as 7.4% intraday, eventually closing up 6.16%.

source：uSMARTSG

Q3 Results for Google Parent Alphabet

Alphabet, Google’s parent company, reported a 15% increase in Q3 revenue, with earnings per share (EPS) up nearly 37%, exceeding expectations. Among its businesses, the cloud segment performed exceptionally well, with operating profit up more than sixfold, marking a new quarterly record.

Key Financial Data:

Revenue: Alphabet reported Q3 revenue of approximately $88.27 billion, a 15.1% year-on-year increase, above the forecasted $86.45 billion.

EPS: Diluted EPS reached $2.12, a 36.8% year-on-year increase, above the expected $1.84.

Operating Profit: Operating profit in Q3 was $28.52 billion, a 33.6% year-on-year increase, above analysts’ forecasts of $26.67 billion, with an operating margin of 32%, a 4-point year-on-year increase.

Net Income: Net income in Q3 reached $26.3 billion, a 33.6% year-on-year increase.

Capital Expenditure: Capital expenditure for Q3 stood at $13.06 billion, slightly above expectations of $12.88 billion.

Following the earnings report, Alphabet’s stock rose by over 6% in after-hours trading.

source：uSMART SG

AI Boom Drives Demand for Advanced Manufacturing Equipment

Demand for advanced manufacturing equipment has surged due to the growing need for AI, benefiting companies like ASM, especially for high-performance products like GAA technology. ASM CEO Hichem M'Saad anticipates a significant sales increase next year. AI remains a major driving force in the semiconductor terminal market, particularly in the logic/foundry and high-bandwidth memory fields, aligning with ASM’s core strengths.

Deutsche Bank noted that major tech companies currently benefit primarily from generative AI in their cloud businesses, with AI-driven revenue beyond the cloud being more qualitative and less quantifiable in the short term. Alphabet CEO Sundar Pichai stated that the company will continue its long-term focus on AI investment, leveraging AI tools to benefit both consumers and partners.

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Source: uSMART SG

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