Chip equipment manufacturer ASM International (ASMIY.US) Q3 orders were below expectations, management described Q4 as "bottoming out" and expect a rebound next year.

Dutch chip equipment manufacturer ASM International (ASM International NV, ASMIY.US) announced its third-quarter financial report on October 28 Eastern Time, with orders falling below analysts' expectations, mainly due to a decline in demand from advanced chip manufacturers and a reduction in orders from China. The company stated in its statement on Tuesday that after adjusting for exchange rate fluctuations, order intake in the third quarter fell by 17% year-on-year to 6.368 billion euros (approximately $7.43 billion). According to surveys, analysts' average expectations for order intake for the quarter were 7.249 billion euros. ASM stated that the decline in orders was impacted by the contraction of its business in China, with the US-China trade tensions disrupting business for Chinese customers. In addition, some core customers producing advanced logic chips are also delaying orders. The company, headquartered in Almere, the Netherlands, had already warned of these trends at an investor day event in September, indicating that sales for the second half of the year could decrease by 5% to 10%. ASM CEO Hichem M'Saad stated in the announcement, "We expect the weak order trend to bottom out in the fourth quarter. As we progress towards 2026, quarterly order intake is expected to rebound." The company also revealed that fourth-quarter sales are expected to be between 6.3 billion and 6.6 billion euros, lower than the analysts' average expectation of 6.82 billion euros. ASM expects performance to "start slowly" in early 2026, but annual revenue is expected to grow. In the third quarter, ASM's revenue increased by 8% year-on-year to 8 billion euros after adjusting for fixed exchange rates; adjusted net profit for the same period increased to 2.062 billion euros. ASM's deposition equipment is crucial for the production of advanced chips, which are widely used in artificial intelligence infrastructure. The company had previously benefited from the transition to "gate-all-around" technology - this chip architecture can improve device performance and reduce power consumption. The AI boom has driven overall spending growth in the infrastructure sector. ASM's peer, ASML Holding Company, which produces advanced lithography equipment (ASML.US), stated earlier this month that it had observed a "positive momentum" in AI investments expanding to more customer groups.