Eindhoven, Netherlands – ASML, a leading semiconductor company, reported a decrease in net sales to 5.29 billion euros in the first quarter, falling short of expected revenues. Despite the decline, net profit exceeded expectations at 1.22 billion euros.
The drop in net sales by 21.6% and net income by 37.4% reflects the challenges faced by ASML due to weakened demand for consumer electronics like smartphones and laptops. This impact on chipmakers producing semiconductors has resulted in a slight decrease in demand for ASML’s machinery.
During the first quarter, ASML’s net bookings for their machinery totaled 3.6 billion euros, marking a 4% decrease year-on-year and a significant plunge from the previous quarter. This decline comes as various semiconductor companies, including memory chipmaker Samsung, are experiencing a rebound in demand.
ASML, known for producing extreme ultraviolet lithography machines crucial for manufacturing advanced chips, is optimistic about their outlook for 2024 despite the current challenges. The company expects net sales to remain similar to 2023, with the second half of the year projected to be stronger as the industry continues to recover.
CEO Peter Wennink expressed confidence in the company’s growth trajectory, emphasizing a focus on investments in capacity ramp and technology to prepare for the industry’s cycle upturn. ASML’s equipment is heavily sought after by major chip manufacturers like Taiwan Semiconductor Manufacturing Co., Samsung, and Intel.
The bullish stance from ASML is further supported by the increased production capacity by key players like Samsung, TSMC, and Intel, especially in America with backing from the U.S. CHIPS and Science Act. CFO Roger Dassen envisions a convergence of new fab openings, strong industry trends, and the ongoing upturn by 2025.
ASML’s first-quarter results did not address any potential impact from export restrictions to China, which were implemented by the Dutch government in response to U.S. pressure. Despite the restrictions, sales to China accounted for a significant portion of ASML’s total sales in the first quarter.
While export restrictions may affect a portion of sales to China, ASML remains confident in its ability to navigate challenges and capitalize on opportunities within the semiconductor industry. The company’s commitment to innovation and growth positions it well for success in a rapidly evolving market landscape.