ASML logo is seen on the headquarters in Veldhoven, Netherlands, June 16, 2023.
Piroschka Van De Wouw | Reuters
ASML reported second-quarter earnings and sales that beat forecasts, as interest in artificial intelligence chips drives up demand for the Dutch firm’s critical semiconductor making equipment.
Here’s how ASML did versus LSEG consensus estimates:
- Net sales:Â 6.24 billion euros ($6.8 billion) versus 6.03 billion euros expected
- Net profit: 1.58 billion euros versus 1.43 billion euros expected
ASML previously forecast second-quarter net sales of between 5.7 billion euros and 6.2 billion euros. Net sales fell 9.5% year-on-year, while net income dropped by 18.7%. This was narrower than the falls logged last quarter.
Net bookings — a key metric for the market, marking orders for ASML machinery — totaled 5.6 billion euros within the June quarter, rising greater than 24% year-on-year.
The Dutch firm is one of the vital necessary semiconductor firms on this planet, producing tools often called extreme ultraviolet (EUV) lithography machines, that are required to fabricate essentially the most advanced chips.
ASML has previously called 2024 a “transition” 12 months because it expects the semiconductor industry to begin to get better after a tricky 2023. The corporate kept its outlook for the complete 12 months unchanged. ASML now said it forecast third-quarter net sales of between 6.7 billion euros and seven.3 billion euros. Analysts had expected the corporate to forecast revenue of seven.6 billion euros within the third quarter.
“While there are still uncertainties available in the market, primarily driven by the macro environment, we expect industry recovery to proceed within the second half of the 12 months,” ASML CEO Christophe Fouquet said in an announcement.
“We see 2024 as a transition 12 months with continued investments in each capability ramp and technology. We currently see strong developments in AI, driving a lot of the industry recovery and growth, ahead of other market segments.”
A few of the world’s biggest chipmakers are constructing recent semiconductor manufacturing plants equivalent to Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung within the U.S.
“The industry expects to be in a cyclical upturn in 2025. Because of this, we want to arrange for various recent fabs which can be being built today across the globe. Those fabs will likely be spread geographically and are strategic for all our customers. They’re all scheduled to take our systems,” Fouquet said in a pre-recorded video addressing the corporate’s earnings.
AI stays a “relatively small part” of ASML revenues, in accordance with Ben Barringer, technology analyst at Quilter Cheviot. “But that is going to grow very significantly over the subsequent couple of minutes,” he told CNBC’s “Squawk Box Europe.”
ASML also faces geopolitical headwinds. Following pressure from the U.S., the Dutch government last 12 months introduced curbs on the export of advanced semiconductor equipment, amid U.S. pressure to chop Beijing off from key chipmaking tools. The measures also impact the ASML offerings, although China has never received an ASML EUV machine.
ASML previously said that export restrictions would impact 10% to fifteen% of it’s China sales this 12 months.
But China remained a critical a part of ASML’s business within the second quarter, accounting for 49% of sales, similar to the previous quarter.
As semiconductor stocks across the board have rallied this 12 months, ASML has also seen its share price lifted 44%.
