Holding, a key supplier to the global chip manufacturing industry, said on Wednesday it expects to report sales growth of more than 25% this year despite uncertainty over semiconductor industry despite US efforts to limit China’s access to high-tech.
Dutch company ASML (ticker: ASML) supplies the “lithography” machines needed for semiconductor production, including customers.
Taiwan Semiconductor Manufacturing
Some chip makers are now cutting costs as the industry slows, along with semiconductor makers
(TXN) said on Tuesday that it faces softening demand and higher cancellations for orders.
“We continue to see uncertainty in the market as a result of inflation, rising interest rates, the possibility of a recession, and geopolitical developments related to the control of However, our customers indicate that they expect the market to recover in the second half of the year,” said ASML CEO Peter Wennink.
“Given our order lead times and the strategic nature of our lithography investments, demand for our systems remains strong,” he said.
Wennink also said that US pressure to limit high-end chipmaking exports to Chinese companies has not changed the company’s expectations for ASML, which generates around 15% of its sales from China. The company has been banned from exporting ultra-violet lithography machines to China since 2019, due to Dutch restrictions. The United States reportedly pressured the Netherlands to limit exports of aging ultraviolet lithographic equipment.
“The key question in the coming months will be how long ASML, TSMC,
by extending US restrictions on the export of chips and advanced equipment to China,” GlobalData’s Josep Bori wrote in a research note. “Remaining neutral will make it difficult for companies based in Taiwan, South Korea, the Netherlands, or Japan, despite the significant economic costs of not doing so.”
ASML’s net profit for the final quarter of 2022 was 1.8 billion euros ($1.96 billion), beating the consensus estimate of 1.71 billion euros, according to FactSet. Net sales for the quarter were €6.4 billion compared to €4.99 billion last year, with a loss margin of 51.5%.
ASML said it expects sales in the first quarter to be between €6.1 billion and €6.5 billion. For 2023 in general, we predict an increase in net sales of more than 25% and a slight improvement in gross margin compared to 2022.
Analysts at UBS wrote in a research note that the guidance for sales growth is ahead of consensus expectations of around 21% for this year and that the results are “encouraging.”
ASML’s US stock price fell 1.7% in recent trading, following a strong run on results that have sent shares up 23% this year.
The company ASML paid 5.80 € in dividends for the last month and 5.5 % of the annual expenses.
Write to Adam Clark at [email protected]