ASML Q4 order book seen to signal tech rebound

AMSTERDAM (Reuters) - Dutch chip equipment maker ASML is expected to report an improvement in orders, indicating a technology sector recovery, but analysts said rising expectations could disappoint if any of the numbers slip.

There are expected to be 37 new system bookings valued at 813 million euros ($1.17 billion) in the fourth quarter, according to a Reuters poll, up from 35 systems worth 777 million euros in the third quarter.

"End demand for semiconductors is recovering after a very weak period. Capex is rapidly increasing after a virtual standstill in the first half of 2009. This will lead to positive news flow in the coming quarters," Petercam analyst Eric de Graaf said.

ASML''s order book, which is in an important indicator for the chip industry, has been improving since the second quarter of 2009 after a virtual stand-still at the end of 2008 and early 2009.

INTEL HOPES

The initial order growth was driven by ASML''s premium clients, which began investing again to maintain their leading market positions.

These customers include the world''s largest chip maker Intel Corp and Samsung, especially for ASML''s immersion machines, which allow manufacturers to produce chips with ever-finer structures, and sell at about 30 million euros each.

Analysts expect orders from mass production customers such as the world''s largest contract chip maker, Taiwan Semiconductor Manufacturing, will also recover on the back of a rise in chip sales for personal computers, wireless devices and consumer electronics.

Hopes for a rebound of the technology sector were also fueled last week by Intel, which beat analyst expectations and gave a bullish outlook for the sector.

Researchers at Gartner said last month worldwide wafer fabrication equipment spending is expected to increase 56.6 percent in 2010, compared with total global semiconductor spending growth, projected up 45 percent in 2010 to $37 billion.

"At this time, Gartner analysts do not see that a shortage of immersion tools will develop, but the availability of long lead items could limit wafer fab equipment growth in 2010 if the market heats up more," Gartner said.