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ASML picks finance chief Wennink as new CEO

ASML's logo is seen on the day of the presentation of the 2011 fourth quarter and annual results in Veldhoven January 18, 2012. REUTERS/Robi
ASML's logo is seen on the day of the presentation of the 2011 fourth quarter and annual results in Veldhoven January 18, 2012. REUTERS/Robi

By Sara Webb

AMSTERDAM (Reuters) - ASML , the world's biggest supplier of computer chip-making equipment, has named finance chief Peter Wennink as CEO, and pledged to stick to its strategy to develop technology used to make the next generations of smartphones and tablets.

Wennink, a 55-year-old Dutchman who has been chief financial officer since 1999, will succeed Eric Meurice, a 56-year-old Frenchman and former Dell Computer executive, as CEO in July. Meurice will become chairman and advisor to the new management.

In the past year, Meurice and Wennink have pulled off two significant deals that brought funding and expertise for ASML's research and development of the next generation of equipment.

"We have a clear roadmap of what to do. We're not going to make significant changes to the strategy and the roadmap of the company," Wennink said in a video interview coinciding with the release of better-than-expected quarterly results on Wednesday.

ASML, considered a barometer for the tech sector, forecast a recovery in sales to around $1.44 billion as demand for hot consumer gadgets, such as smartphones and tablet computers, grows at the expense of heavier laptop computers.

As expected, ASML also announced a new share buy-back program of up to 1 billion euros, equivalent to about 5 percent of its stock market value.

Shares in the company, which competes with Japanese groups Canon <7751.T> and Nikon <7731.T>, surged as much as 9 percent to the highest level since early March.

CONTINUITY

The appointment of Wennink as CEO was expected, analysts said, and showed the firm would continue to focus on its existing strategy and deliver strong returns to investors.

"This was the most likely scenario," said Pierre Ferragu, analyst at Bernstein Research.

"He (Wennink) has helped put them in the position they are in today. He has helped design a company that controls costs extremely well and outspent competitors on R&D as a result. This makes me confident investors will share in the benefits of strong returns going forward."

The quest to produce ever smaller, more efficient, more powerful chips pushed ASML into two deals last year.

It agreed to buy Cymer Inc , a supplier of lithography light sources used to make chips, in order to speed up the development of a new manufacturing technique which uses EUV, or extreme ultraviolet light, to produce smaller chips.

It also won funding from three big customers - Intel Corp , Taiwan Semiconductor Manufacturing <2330.TW> and Samsung Electronics <00593.KS> - for the research and development of EUV technology and of equipment for making larger wafers.

The production of wafers with a 450 mm diameter, compared with 300 mm now, allows more chips per wafer to be cut and will help reduce costs by as much as 30-40 percent.

Fast-tracking the development of such technology not only cements ASML's position as the market leader ahead of Nikon, but is also expected to significantly reduce production costs.

ASML reported better-than-expected first-quarter net profit of 96 million euros on sales of 892 billion euros, but the quarterly revenue figure was the lowest in three years.

Personal computer sales plunged 14 percent in the first three months of the year, the biggest decline in two decades of keeping records, as tablets continue to gain in popularity.

IT research firm Gartner, Inc said earlier this month it expects worldwide shipments of personal computers, tablets and mobile phones to rise 9 percent this year as strong growth in smartphones and tablet devices more than offsets an expected decline in PCs.

(Reporting by Sara Webb; Editing by Louise Heavens)

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