ASM International’s Earnings Call: Growth Amid Challenges

Asm International ((ASMIY)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for ASM International painted a picture of robust financial health, marked by impressive revenue growth and notable achievements in the memory and logic/foundry segments. Despite these successes, the company faces challenges in the power, analog, and wafer markets, coupled with an anticipated decline in sales from China. The overall sentiment of the call was balanced, highlighting both significant achievements and areas of concern.

Strong Revenue Growth in Q4 2024

ASM International reported a remarkable 27% increase in revenue at constant currencies for the fourth quarter of 2024, reaching €809 million. This figure hit the upper end of the company’s guidance range, showcasing a strong finish to the fiscal year.

Record-Breaking Full Year Sales

For the full year 2024, ASM International achieved a new record high in sales, with a 12% increase at constant currencies, totaling €2.9 billion. This milestone underscores the company’s successful strategies and market positioning.

Improvement in Gross Margin

The company’s gross margin saw an improvement, rising from 49.3% in 2023 to 50.5% in 2024. This enhancement was primarily driven by a favorable sales mix and significant contributions from the Chinese market.

Significant Increase in Memory Sales

Memory sales experienced a substantial surge, increasing by more than 150% in 2024. This growth was largely fueled by heightened demand for HBM-related DRAM products.

Growing Orders in Logic/Foundry

The logic/foundry segment emerged as a strong performer, with Q4 orders seeing a notable increase compared to Q3. This was driven by gate-all-around orders for 2-nanometer volume manufacturing.

Strong Performance in Spares & Services

The spares and services division of ASM International also performed well, with sales rising by 49% year-on-year at constant currencies, reflecting robust demand in this area.

Decline in Power, Analog, and Wafer Sales

Conversely, the power, analog, and wafer segments faced difficulties, with sales dropping significantly year-on-year. This decline was attributed to ongoing cyclical downturns, particularly in the silicon carbide market.

Decreased Sales Contribution from China Expected

Looking ahead, ASM International anticipates a decrease in sales contribution from China in 2025, with Chinese equipment sales expected to represent a smaller percentage of total revenue.

Higher Net R&D Expenses

The company reported a 34% year-on-year increase in net R&D expenses for the fourth quarter, a trend expected to continue into 2025 as ASM International invests in customer engagements and development.

Challenges in the Power/Analog/Wafer Market

The power, analog, and wafer markets are currently experiencing a cyclical correction, with no immediate signs of recovery. This presents a challenge for ASM International as it navigates these market conditions.

Forward-Looking Guidance

ASM International maintained its guidance for 2025, projecting total revenue to range between €3.2 billion and €3.6 billion. The company expects further revenue growth in the first half of 2025, despite current challenges in certain market segments.

In conclusion, ASM International’s earnings call highlighted a balanced outlook with strong revenue growth and record-breaking sales achievements, tempered by challenges in specific market segments. The company’s forward-looking guidance suggests optimism for continued growth, albeit with caution in certain areas.