Chip Firm ASML Offers Grim 2009 Outlook

AMSTERDAM, Netherlands -- ASML Holding(ASML Quote), a key supplier to Intel(INTC Quote) and other computer chip makers, reported a net loss for the fourth quarter on restructuring charges and weak demand for its products.

The fourth-quarter loss was 88 million euros ($116 million), compared with a net profit of 173 million euros in the same period a year earlier. The figure includes a restructuring charge of 138 million euros after the company announced plans in December to cut 1,000 jobs, around 10% of its work force.

Sales fell 48% to 494 million euros, and the company's outlook for 2009 was grim.

"The severity of the global economic downturn has caused semiconductor manufacturers to delay their investment plans," CEO Eric Meurice said in a statement.

"The uncertainty as to the timing of a semiconductor end-product demand pick up ... makes a recovery prediction impossible."

ASML makes lithography systems, the machines used to map out the circuitry of semiconductors. Customers include Intel, Samsung, and Taiwan Semiconductor(TSM Quote).

The company had just 127 million euros worth of new orders in the fourth quarter, but its backlog of orders -- some already delayed from earlier quarters -- is 755 million euros.

"Low fourth-quarter bookings ... were the result of a virtual freeze in capital expenditure by most customers, due to declining utilization rates and the inability of some customers to finance" purchases, ASML said.

ASML said its current restructuring would save around 50 million euros a quarter and it expected to have positive cash flow from operations in the first quarter.