If you’re ASML, not even a semiconductor downturn can dent your outlook

Whereas some within the semiconductor market are struggling, ASML, which produces chipmaking gear, has crushed its steerage for the primary quarter as demand for its merchandise exceeds capability. The corporate additionally stated it’s nonetheless awaiting steerage on curbing gross sales to China.

Netherlands-based ASML reported web revenue of €2.0 billion ($2.19 billion) on web gross sales of €6.7 billion ($7.3 billion) for calendar Q1 2023, up from the €6.43 billion web gross sales for the ultimate quarter of 2022 and €3.5 billion ($3.8 billion) in the identical quarter a 12 months in the past.

The corporate stated its web bookings for the quarter got here in at €3.8 billion ($4.1 billion), and €1.6 billion ($1.7 billion) of this pertained to excessive ultraviolet lithography (EUV) machines, used for probably the most superior silicon course of nodes, of which ASML is the only real international provider.

Wanting forward, ASML stated it expects web gross sales for the present second quarter to land someplace between €6.5 billion ($7.1 billion) and €7.0 billion ($7.6 billion).

Nonetheless, shares within the firm had been down simply previous to the outcomes being disclosed amid considerations over future demand for the photolithography gear that ASML builds for chip fabrication firms.

Digitimes Asia reported earlier this week that Taiwan’s TSMC might reduce on orders for brand spanking new EUV tools from ASML for the primary time, on the again of falling demand that will see TSMC incur a single-digit income decline this 12 months.

(TSMC’s Q1 outcomes are additionally due this week, and at its final earnings name the corporate predicted it will see income between $16.7 billion and $17.5 billion, the primary decline for the enterprise in 4 years.)

ASML president and CEO Peter Wennink acknowledged that there was some uncertainty forward for the semiconductor market as a complete.

“We proceed to see blended indicators on demand from the totally different end-market segments because the business works to convey stock to extra wholesome ranges. Some main clients are making additional changes to demand timing whereas we additionally see different clients absorbing this demand change, significantly in DUV [deep ultraviolet lithography] at extra mature nodes,” he stated.

However total demand nonetheless exceeds the corporate’s capability for this 12 months, and it at present has a backlog of orders value over €38.9 billion, Wennink claimed. “Our focus continues to be on maximizing system output,” he added.

For the entire of 2023, ASML expects continued robust progress, with Wennink repeating his earlier prediction of a web gross sales improve of greater than 25 p.c for the 12 months, plus a slight enchancment in gross margin relative to 2022.

On the problem of exports to China, CFO Roger Dassen stated in a video interview: “We’re nonetheless ready for the ultimate detailed steerage from the Dutch authorities.”

As The Register reported final month, the Netherlands has been coerced into becoming a member of US efforts to restrict China’s entry to cutting-edge chip expertise, and restrictions on the gross sales of superior lithography tools are anticipated to be a part of this.

“We count on that we’ll require export licenses for superior immersion instruments,” Dassen stated, “and our interpretation of superior immersion instruments could be for the NXT:2000 and subsequent variations.”

However it seems that ASML doesn’t imagine the restrictions could have any important impact on its total enterprise.

“Primarily based on that, we imagine the affect on our steerage for 2023 or on the eventualities that we modeled each for 2025 and 2030, we don’t count on that affect to be materials on these expectations,” Dassen stated. ®