- Q4 orders three times estimates
- Full year earnings surge 40%
- ‘No AI without ASML’ says CEO
Dutch semiconductor equipment maker ASML (ASML:AMS) smashed analysts’ forecasts for quarterly orders and earnings with its latest trading update, confirming its position as Europe’s largest technology firm.
The shares climbed 6.5% in Amsterdam to €753, just shy of their all-time high in late 2022, giving the company a market value of more than €300 billion.
NEW SEMICONDUCTOR CYCLE
For the year to December, ASML posted 30% growth in sales to €27.6 billion and a 40% jump in net income to €7.8 billion thanks to better-than-expected installed-base revenue and margins in the fourth quarter.
Moreover, net new orders in the fourth quarter were €9.2 billion, more than three times the market consensus, of which €5.6 billion were for its top-of-the-range EUV (extreme ultra-violet) machines used to make memory chips.
Chief executive Peter Wennink admitted growth in 2024 would be slower than last year, and margins in the first quarter would be lower than the previous quarter, but the firm is gearing up for a significant jump in demand in 2025 as the semiconductor industry begins the next big cycle.
More than 20 of the company’s customers are building new factories, from the US to Europe, India and Japan, which has serious ambitions to rebuild its domestic chipmaking industry, and all are planning to install their first lithography machines later this year or in 2025.
‘2025 will be a full upswing year’, said Wennink, ‘although depending on the steepness of the slope some orders could be pulled forward to 2024.’
‘NO ASML, NO AI’
Given the global megatrends in the electronics industry, and in particular the roll-out of AI (artificial intelligence), there is ever-greater demand for more computing power to handle more data.
In order to make more complex chips with greater capacity, lithography intensity and complexity has to go up and ASML has both the hardware and the software to do it argues Wennink.
‘Without high-end logic and memory chips there is no AI, which means without ASML there is no AI’, he concludes.
