BE Semiconductor expects demand to weaken further

Chipmaking equipment supplier BE Semiconductor (BESI) on Thursday forecast a big drop in third-quarter revenue as soaring prices dampens demand.

The maker of semiconductor assembly and packaging equipment said it expects its revenue to decline by 20 per cent to 30 per cent in the three months to Sept. 30 quarter-on-quarter, following a year-on-year fall of 5.4 per cent to 214 million euros ($218.75 million) in the second quarter.

“Whether current market softness is a temporary pause or more prolonged in duration is difficult to tell at present given the many conflicting economic, geopolitical and industry cross currents,” Chief Executive Officer Richard Blickman said as he delivered second quarter results.

Chipmakers including Micron Technology Inc and Advanced Micro Devices Inc last month signalled waning demand as rising inflation across the world resulted in consumers tightening belts.

BESI’s orders in the second quarter fell by 23.5 per cent to 153.1 million euros from a year earlier, as slower economic growth made customers more cautious, the company said.

It cited lower bookings by Chinese subcontractors and decreased orders for high performance computing applications as the main reason for the drop.

“The YoY decline is a consequence of lower demand for Chinese handset and mainstream electronics applications due to overcapacity and COVID-19 triggered lockdowns,” analysts at ING said.

KBC analysts expect the second half of the year to be turbulent for BESI, but in the longer term said it should benefit from being an industry front runner.

The group is targeting a third-quarter gross margin of 60-62 per cent, after reaching 61 per cent in the April-June period helped by favourable product mix, stronger dollar, and lower operating expenses.

BESI shares, which are down almost 36 per cent since the start of the year, fell 3.3 per cent by 0908 GMT.

Dutch peer ASML Holding on Wednesday reported higher second-quarter profit on record bookings but unexpectedly cut its 2022 outlook citing an increasing number of fast shipment delays due to lingering supply-chain constraints.

(This story changes Q3 revenue forecast in second paragraph to qtr/qtr from yr/yr.)


Source: Reuters