VELDHOVEN, NETHERLANDS (Reuters) - Semiconductor equipment maker ASML Holding NV on Wednesday forecast double digit growth in sales and profits for 2020, saying it did not expect any financial impact from being swept up in the trade war between the United States and China.
ASML has a near-monopoly in making lithography systems, giant 150 million euro machines used to print chip circuitry, but the Dutch government has withheld permission for the company to export one of its most advanced technologies to China.
Reuters reported earlier this month that the delay came after a campaign of pressure from the Trump administration to stop China getting hold of a machine required to make the world’s fastest microprocessors, but which also has military applications.
ASML CEO Peter Wennink on Wednesday confirmed that the company had requested but not received permission to send a machine with “Extreme Ultraviolet”, or EUV, technology to a Chinese customer, understood to be SMIC.
“We need to abide by the law, and if we want to ship a certain technology...we need to go to our government and apply for an export license,” he told Reuters in an interview.
He confirmed that the company was still waiting for approval to ship the order to China, but estimated the financial impact of the delay on the company as “zero”.
Earlier on Wednesday ASML reported fourth quarter net profit of 1.13 billion euros ($1.25 billion), up 43% from the same period of 2018 as sales rose 29% to 4.04 billion euros.
Wennink said that any machines destined for, but not sent to, China would eventually be sold elsewhere as global demand for computer chips grows.
“If we cannot ship to customer A or country B, we’ll ship it to customer C and country D,” he said.
ASML shares, which have more than doubled over the past year as its customers announced plans to invest heavily in new chipmaking capacity, traded 0.5% higher at 272.6 euros at 1311 GMT.
Despite problems shipping cutting-edge equipment, ASML regularly sends previous-generation technology to China, where customers such as TSMC, Intel and Samsung have manufacturing facilities.
Chinese customers accounted for 12% of ASML’s total sales in 2019, down from 19% the previous year, with Wennink saying that was due to general weakness in end-market demand for memory chips, rather than restrictions on ASML’s technology.
He added that the market for logic chips used in smart phones and 5G telecommunications networks was expected to remain strong, while customers were starting to see the first signs of recovery in the memory chip market.
ASML forecast sales of 3.1-3.3 billion euros in the first quarter and announced a new 6 billion euro share buyback program through 2022.
($1 = 0.9022 euros)
Reporting by Toby Sterling; Editing by Shri Navaratnam, Shailesh Kuber, Kirsten Donovan