Samsung, SK hynix shares slide on weak ASML forecast

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Samsung, SK hynix shares slide on weak ASML forecast

Published: 16 Oct. 2024, 17:28

JIN EUN-SOO
jin.eunsoo@joongang.co.kr

ASML headquarters is seen in Veldhoven, Netherlands August 30, 2018. [REUTERS/YONHAP]

Samsung Electronics and SK hynix shares tanked Wednesday upon the disclosure of a grim 2025 outlook and a lower-than-expected order book for Dutch chip equipment company ASML.

ASML is the exclusive supplier of EUV and High-NA EUV equipment essential for manufacturing advanced chips.

Both Samsung Electronics and SK hynix are core clients of the Dutch company.

Samsung Electronics shares closed 2.46 percent lower than the previous trading day at 59,500 won ($43.64).

SK hynix shares dropped by 2.18 percent at 188,700 won.

ASML's order book for the third quarter came in at 2.6 billion euros ($2.8 million), a disappointing figure compared to the market estimation of 5.4 billion euros. The equipment maker also lowered its 2025 revenue outlook from the original range of 30 billion to 40 billion euros to a range of 30 billion and 35 billion euros.

“While there continues to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears that the recovery is more gradual than previously expected,” company CEO Christophe Fouquet said in the earnings release.

While the AI boom has driven up demand for advanced chips like high bandwidth memory, the recovery in traditional segments like smartphones and PCs still remain slow. The normalization of aggressive purchases made by Chinses chipmakers in 2024 due to the potential risk from intensifying U.S. export restrictions will also deal a blow to ASML's 2025 earnings.

Challenges for contract manufacturing chipmakers have also factored into the reduced outlook.

ASML's High-NA EUV machines are considered essential to manufacturing processors with less than two-nanometer nodes. However, Intel — which was the first recipient of the High-NA equipment and has been placing aggressive orders for the machine — is now planning to spin off its contract-manufacturing business into a separate unit to possibly turn around its mounting losses. Samsung Electronics also delayed the operational timeline for its AI chip plant in Taylor, Texas.

ASML posted a net profit of 2.1 billion euros in the third quarter and 7.5 billion euros of revenue.

Its shares plunged by 16.26 percent on Nasdaq on Tuesday.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]