Chip equipment sales to boom in Asia

VELDHOVEN, The Netherlands: Electronic chip production equipment maker ASML is expanding its presence in Asia to take advantage of a sales opportunity for more than 1,000 new chip lithography machines, the Dutch firm said.

The world's biggest maker of machines that map out electronic circuits on silicon wafers said that over the next three to five years, Asian chipmakers, excluding Japan, would buy some 738 of the leading edge 300-millimetre wafer tools and around 379 of the 200-millimetre machines.

"Asia is where the action is," Executive Vice President for Sales, Dave Chavoustie, said at an investors' meeting, adding that Asia sales were 70 percent of ASML's total business so far in 2004.

Analysts said they were pleased with the forecasts, because they removed some concerns about the severity of the downturn which is expected to start sometime next year.

"It shows there's good growth in the market and a good foundation for the years ahead," said Jan Willem Berghuis at broker Kempen & Co.

"The market will experience ups and downs, but underlying demand looks good," said ING analyst Ewald Walraven.

The machines sold by ASML sell for an average of 11 million euros apiece and the latest 300-millimetre tools sell for prices well above that, because they can handle silicon wafers with a 300 millimetre diameter which can contain twice as many chips as 200-millimetre wafers.

ASML has a global market share of around 45 percent in value terms, and is determined to fill several holes in its customer base such as a small presence in Japan and with Taiwanese memory chip makers. It also has a limited presence in the factories of the world's biggest chip maker Intel.

ASML said it will boost its presence in Japan by expanding its sales and support teams to be able to target more than one sales lead simultaneously. It currently has just four clients in Japan, with Seiko Epson the only public one, while the country bought almost a quarter of the world's chip lithography machines in 2003.

"That (Japan) is going to take some resources," said Don Crabtree, who is in charge of Asia sales.

However, ASML also said it now has 17 out the world's top 20 chip makers as customers. It competes with Japan's Nikon Corp and Canon Inc.