ASML Holding NV (NASDAQ:ASML), a key supplier to computer chip makers, stock rose 0.94% (As on Oct 21, 12:21:37 AM UTC-4, Source: Google Finance) after the company posted slightly better-than-expected quarterly net income of 1.74 billion euros ($2 billion), amid strong demand for its products and a global semiconductor shortage. The analysts had forecast a net income of 1.6 billion euros for the third quarter ended Sept. 30, according to Refinitiv data. The company is expanding its capacity as semiconductor makers expand theirs to address the global chip shortage. Key customers include all major chip makers such as TSMC, Samsung and Intel. ASML dominates the market for lithography systems, machines that cost up to 150 million euros each and that use focused beams of light to help create the circuitry of semiconductors. The company ended the third quarter with cash, cash equivalents and short-term investments at a level of EUR4.5 billion. Further, Q3 net system bookings came in at EUR6.2 billion, including EUR2.9 billion for EUV systems.

ASML in the third quarter of FY 21 has reported the adjusted earnings per share of 4.27 euros ($4.96), beating the analysts’ estimates for the adjusted earnings per share of 4 euros. The company had reported the adjusted revenue of 5.24 billion euros in the third quarter of FY 21, beating the analysts’ estimates for revenue of 5.34 billion euros. The company shipped 13 EUV systems and recognized EUR2.2 billion revenue from 15 systems this quarter. Net system sales of EUR4.1 billion, was again more weighted toward Logic at 61% with the remaining 39% from Memory. The continued strength in Logic drives both DUV and EUV revenue. The Memory business is mainly driven by DRAM. Installed Base Management sales for the quarter came in at EUR1.1 billion, above guidance, due to increased upgrade and service business.

The company forecast fourth-quarter sales to be in the range of 4.9-5.2 billion euros at a gross margin of 51%-52%. The company’s full-year target is of 35% sales growth. The company expects Q4 R&D costs to be of around 670 million euros and SG&A costs to be of around 195 million euros.

The company said it was benefiting from “megatrends” in the electronics industry and also raised its long-term forecasts, estimating full-year revenue would hit 24-30 billion euros ($28 billion-$35 billion) in 2025, with gross margins of up to 55%.