PARIS — ASML Holding NV (Veldhoven, The Netherlands) is another victim of the global economic crisis. The provider of lithography systems for the semiconductor industry announced it has implemented a set of measures, estimated between 120 million euros ($169 million) and 150 million euros ($212 million), to adjust its organization due to severe order slowdown.
Recently, Samsung Electronics, the world's largest producer of memory chips and one of ASML's main customers, said it would slash capital spending next year, with negative implications for ASML, Applied Materials and other semiconductor equipment makers.
For the fourth quarter of 2008, ASML said it now anticipates sales to be between 450 million euros and 500 million euros. This compares to guidance issued on Oct. 15 for sales of about 530 million euros.
Similarly, ASML said the sharp decline in new order intake, in addition to requests from customers to postpone backlog system deliveries, will translate into substantially lower sales in the first six months of 2009. The company said it expects sales to be between 180 million euros and 250 million euros in the first quarter of 2009.
ASML said it has taken action to structurally lower its cost base, while maintaining its R&D programs and a level of capacity to ramp production back to customer needs without lengthening lead times.
The first and most severe measure is the reduction of the company's workforce by more than 10 percent, representing 1,000 employees of its 7,000 employees, between the fourth quarter of 2008 and the second quarter of 2009. Reductions mostly concern employees on temporary contracts and will occur at the company's headquarters, in Veldhoven, at its manufacturing site in Wilton, Connecticut, and at its training site in Tempe, Arizona, which will be closed.
In addition, ASML said it plans to shut down production facilities for a total of four weeks, spread over the first and the second quarters of 2009.
In parallel, the Dutch chip equipment maker explained that it would reduce discretionary expenses, including contracted activities, salary raises and miscellaneous consumption.
The costs associated with the above measures, expected to be between 120 million euros and 150 million euros, will be mostly incurred in the fourth quarter of 2008, the company noted.
"Never before have we witnessed such a sharp and sudden fall-off in lithography system demand, triggered by an unprecedented mix of falling end-demand for semiconductors, weak memory prices and restricted access to capital for our customers," commented Eric Meurice, president and CEO of ASML.
He continued: "This steep decline in our business activity is forcing us to adjust our organization in order to lower our cost base significantly by using the full flexibility of our business model, while maintaining our important strategic investments in research and development (R&D). Although painful for our stakeholders in the short term, the current effort offers ASML an opportunity to emerge healthier and fundamentally stronger when the overall semiconductor market recovers."
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