Customers expect a turning point
Chip industry supplier ASML expects a transition year
October 18, 2023, 1:47 p.m
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ASML supplies chip manufacturers worldwide and therefore has a good overview of the industry. And they are currently in a trough, but expected an upward trend to begin at the end of the year. However, the Dutch are not expecting any big jumps in the coming year.
Because of customers’ reluctance to buy, the manufacturer of chip production machines ASML has warned of stagnating sales for the coming year. However, thanks to a sales boost in China, the chip industry supplier’s revenues exceeded expectations in the past quarter. “The semiconductor industry is currently going through the bottom of the cycle and our customers expect the turning point to be apparent by the end of this year,” said ASML CEO Peter Wennink. However, they could not estimate the pace of recovery. “We therefore expect 2024 to be a transition year.” He continues to expect growth of 30 percent for the current year.
Analysts had previously forecast an increase in sales from a forecast 27.2 billion to 28.5 billion euros in 2024. Apparently the sanctions against China are partly responsible for the conservative outlook, wrote analyst Janardan Menon from the investment bank Jefferies. ASML shares fell as much as five percent in Amsterdam. This meant they were heading for the biggest daily loss of the year. With a market value of around 220 billion euros, ASML is the most valuable European technology group.
In the last quarter, the technology group increased its annual net profit from 1.7 billion to 1.9 billion euros. Experts had expected 1.8 billion euros. As expected, sales rose by 15 percent to 6.7 billion euros. China became the most important sales market, overtaking Japan and South Korea.
Customers from the People’s Republic increasingly bought ASML machines for chip production because their export is to be restricted at the turn of the year. In doing so, the Netherlands gave in to a request from the USA. The government in Washington is restricting technology exports to China on a large scale in order to slow down the country’s technological and military progress.