They just posted a massive margin beat while admitting they have zero visibility on the specific segment required to hit their own high-end guidance.
Thesis: Ignore the noise on the cyclical legacy business. The signal is the 53.4% gross margin. ASM has pricing power because 2nm Gate-All-Around (GAA) doesn't work without them. The street is fretting over a flat H2 caused by a power/analog bottom, while the structural engine (Logic/Foundry) is ramping faster than prior nodes. You buy the structural margin expansion and get the cyclical recovery as a free option.
Verdict: LONG — Conviction: HIGH
Catalyst: Acceleration of Gate-All-Around bookings in H2 2025 for 2026 delivery, confirming the 2nm ramp magnitude.
Key Risk: Persistent CoWoS-L packaging constraints preventing HBM memory makers from placing tool orders, capping the memory upside.
The Tell: M'Saad admitting 'right now we don't see any visibility' on power/analog immediately after claiming the high-end of guidance depends on that specific segment recovering.
Friction Level: MODERATE_FRICTION — Street models flat H2 based on guidance math; Management claims 'opportunities' in Power/Analog and HBM will materialize to drive growth, despite admitting low visibility.
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