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ASML smashes forecasts with annual sales up 30%

Dutch semiconductor equipment supplier ASML has shrugged off a depressed chip market and geopolitical tensions to post stellar 2023 results.

The company announced net sales for Q4 2023 of EUR 7.2 billion (USD 7.82 billion) against an expected total of EUR 6.9 billion. Net profit hit EUR 2.05 billion euros versus EUR 1.86 billion expected.

For the 2023 full year, ASML achieved net sales of EUR 27.6 billion for gross margin of 51.3%, with net income at EUR 7.8 billion. The FY 2022 total was EUR 21.1 billion.

The firm now says it expects Q1 2024 net sales to be between EUR 5.0 billion and EUR 5.5 billion with a gross margin between 48% and 49%. It is projecting total revenue for 2024 to expect to be similar to 2023, with significant growth ahead for 2025.

ASML's numbers can be seen as an indication of the semiconductor industry's general health. It has cornered the market for Extreme ultraviolet lithography (EUV) machines, which every fab needs to make silicon wafers.

Indeed, just weeks ago, ASML dispatched its first USD 400 million next gen EUV machines (called High-NA EUV) to Intel in a move which some say could revolutionise the production of application processors.

Peter Wennink, CEO of ASML, said: "The semiconductor industry continues to work through the bottom of the cycle. Although our customers are still not certain about the shape of the semiconductor market recovery this year, there are some positive signs. Industry end-market inventory levels continue to improve and litho tool utilisation levels are beginning to show improvement. Our strong order intake in the fourth quarter clearly supports future demand."

While ASML appears to have weathered the storm caused by the post-COVID chip glut, it is still navigating the political conflict between the US and China.

Despite US sanctions, ASML does ship machines to China though it limits its exports to less advanced 28nm equipment. And in fact, these sales have been climbing as China works to accelerate its domestic chip making capacity. A recent report in the South China Morning Post reported a 1050% surge in the import value of lithography equipment from the Netherlands to China in November 2023 – a tenfold year-on-year increase.


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June 13 2024 1:49 pm V22.4.55-2