The ASML logo is seen on the headquarters in Veldhoven, the Netherlands, on June 16, 2023.
Piroschka Van De Wouw | Reuters
ASML reported second-quarter earnings and revenue that beat forecasts as interest in artificial intelligence chips boosted demand for the Dutch company’s key semiconductor manufacturing equipment.
Here’s how ASML performed in comparison with LSEG consensus estimates:
- Net sales: 6.24 billion euros (6.8 billion dollars) in comparison with 6.03 billion euros expected
- net profit: 1.58 billion euros in comparison with 1.43 billion euros expected
ASML had previously forecast second-quarter net sales of between 5.7 and 6.2 billion euros. Net sales fell 9.5 percent year-on-year, while net profit fell 18.7 percent, lower than the declines seen last quarter.
Net bookings – a key market metric that measures orders for ASML machines – totaled EUR 5.6 billion within the June quarter, up greater than 24 percent year-on-year.
The Dutch company is one in all the world’s most vital semiconductor corporations and produces tools called extreme ultraviolet lithography machines (EUV), that are required to provide probably the most advanced chips.
ASML had previously described 2024 as a “transition year” as the corporate expects the semiconductor industry to recuperate after a difficult 2023. The company kept its full-year forecast unchanged. ASML has now announced that it forecasts net sales of between 6.7 and seven.3 billion euros for the third quarter.
“Although uncertainties remain in the market, mainly due to the macroeconomic environment, we expect the industry recovery to continue in the second half of the year,” said Christophe Fouquet, CEO of ASML, in an announcement.
“We view 2024 as a transition year with continued investment in capacity expansion and technology. We are currently seeing strong developments in AI, which is driving most of the industry’s recovery and growth, ahead of other market segments.”
Some of the world’s largest chipmakers are constructing latest semiconductor manufacturing facilities, corresponding to Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung within the United States.
“The industry is expecting a cyclical recovery in 2025, so we need to prepare for a number of new factories being built today around the world. These factories will be geographically distributed and will be strategic for all our customers. They will all be expected to adopt our systems,” Fouquet said in a recorded video on the corporate’s earnings.
According to Ben Barringer, technology analyst at Quilter Cheviot, AI stays a “relatively small part” of ASML’s revenue. “But that will grow very strongly in the near future,” he told CNBC’s “Squawk Box Europe.”
ASML can be battling geopolitical headwinds. Under pressure from the US, the Dutch government last yr introduced restrictions on exports of advanced semiconductor equipment, while the US has applied pressure to chop Beijing off from key chipmaking tools. The measures are also affecting ASML’s supply, although China has never received an EUV machine from ASML.
ASML had previously stated that the export restrictions would affect 10 to fifteen percent of its China sales this yr.
However, China remained a vital a part of ASML’s business within the second quarter, accounting for 49% of sales, the identical as within the previous quarter.
As semiconductor stock prices have generally risen this yr, ASML has also seen its share price rise by 44%.
