Dutch company ASML manufactures one of the most important machines needed to manufacture the world’s most advanced chips. The US chip restrictions have left companies including ASML scrambling to figure out what the rules actually mean.
Emmanuel Dunant | AFP | Getty Images
chip equipment company ASML reported year-over-year profit growth in the third quarter, beating analyst expectations, but expects sales to be flat in 2024.
ASML is one of the world’s most important semiconductor companies, producing the tools known as extreme ultraviolet lithography machines needed to produce the world’s most advanced chips.
ASML shares were down nearly 4% just after 8 a.m. London time, as rising geopolitical concerns offset higher profits.
ASML’s third quarter results and LSEG’s forecasts are as follows:
- Net sales: €6.67 billion ($7.1 billion) compared to forecast of €6.71 billion
- Net profit: 1.89 billion euros compared to the expected 1.8 billion euros
Net sales increased by 15.5% from 5.78 billion euros in the same period last year. Net profit increased by approximately 11% from 1.7 billion euros in the same period last year.
Both third-quarter numbers were down from second-quarter results.
“The semiconductor industry is now out of the bottom of the economic cycle, and we expect our customers to see a turning point by the end of this year,” ASML CEO Peter Wennink said in a statement Wednesday. Stated. “Therefore, we expect 2024 to be a year of transition.”
Wennink added that the company has a more “conservative view” on 2024, expecting sales similar to 2023.
“But we also see 2024 as a key year to prepare for the significant growth expected in 2025.”
The semiconductor market has had a tough year as demand for products such as smartphones and laptops that incorporate these components has slumped. As a result, companies such as Taiwan’s TSMC and Samsung, the world’s largest chipmaker and ASML’s customer, have cut capital spending this year.
ASML’s net bookings totaled €2.6 billion in the third quarter, down 42% from the previous quarter as customers refrained from spending.
Still, ASML reaffirmed its guidance for 2023 net sales to increase 30% year over year.
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Focus on U.S. chip curbs
The Dutch company has also been caught up in technology tensions between the US and China because of the importance of its tools.
In June, the Netherlands, where ASML is headquartered, It has its own export restrictions on advanced semiconductor equipment, and companies need government permission to take certain technologies overseas.
This comes after the United States introduced its own wide-ranging restrictions on technology exports to China, and Washington urged its allies to follow suit.
ASML maintains that these measures are unlikely to impact its 2023 financial results.
The US Department of Commerce announced further restrictions on Tuesday to prevent the sale of artificial intelligence chips to China. The Washington government said these were aimed at closing loopholes that emerged after last year’s restrictions.
