Record chip orders for ASML, outlook the same
• Company says sales to China will be affected by last year’s US and Dutch export restrictions
Chipmaking equipment maker ASML reported fourth-quarter earnings on Wednesday that beat expectations and its bestever quarterly orders, but it kept a cautious outlook for 2024 as it faces new restrictions on exports to China.
Net profit at Europe’s biggest technology company by market value rose 9% to €2bn on sales of €7.2bn in the fourth quarter. That topped analyst expectations of a €1.87bn net profit on revenue of €6.9bn, according to LSEG data.
The company registered strong orders of more than €9bn euros in the fourth quarter — more than triple third-quarter levels — but kept its outlook for flat sales growth in 2024 despite strong demand for artificial intelligence (AI) chips.
“The semiconductor industry continues to work through the bottom of the cycle,” CEO Peter Wennink said in a statement.
“Although our customers are still not certain about the shape of the semiconductor market recovery this year, there are some positive signs,” he said, citing improving demand for chips and higher factory utilisation rates.
Taiwan’s TSMC, which manufactures chips for Apple and Nvidia and is ASML’s biggest customer, said last week that its expected capital expenditure would be flat in 2024.
ASML dominates the global market for lithography systems, equipment used by computer chipmakers to help create the circuitry of chips.
“After the good results and the good outlook from TSMC last week, people were hoping that they would increase their outlook for 2024.
“But they’re still a little bit conservative,” analyst Jos Versteeg
of InsingerGilissen said of ASML’s outlook guidance.
He said markets might take that as a negative but predicted the company would raise its outlook later in 2024 as end markets continued to recover. Shares closed on Tuesday at €707.10 in Amsterdam, up 3.7% so far in January.
ASML said sales to China, its third-largest market after Taiwan
and South Korea, would be affected in 2024 by new US and Dutch export restrictions introduced in 2023, affecting up to 15% of its China sales.
Chinese chipmakers have been expanding rapidly with government support, despite weaknesses in the country’s economy, with a big buildout of relatively older chipmaking technology.
AFTER THE GOOD RESULTS ... FROM TSMC LAST WEEK, PEOPLE WERE HOPING THAT THEY WOULD INCREASE THEIR OUTLOOK FOR 2024