Dutch chip equipment manufacturer ASML Revenues are projected to surge in 2023 as the semiconductor industry expects growth to reaccelerate in the second half of this year.
ASML is one of the world’s most important companies in the chip supply chain. We manufacture the machines necessary to manufacture the world’s most advanced chips.
ASML’s net sales increased more than 29% to €6.4 billion ($7 billion) in the fourth quarter of 2022, the company announced Wednesday. Net sales for the full year he stood at €21.1 billion, up more than 13% year-on-year. But full-year net profit actually fell by more than 4% to his €5.6 billion.
ASML forecasts 25% more net sales growth in 2023 compared to 2022.
“Looking at the state of the industry today, we are not isolated from recession fears, high inflation and high interest rates. ASML CEO Peter Wennink told CNBC:
ASML machines are purchased by companies such as: intel TSMC, which actually makes the chips used in end products such as laptops and smartphones. Wennink said stockpiles of chips related to consumer products are increasing because demand for such electronics is “not very good.”
However, he said ASML’s customers consider this to be “short-lived” and therefore have not canceled orders.
“We expect most of our customers to recover in the second half of the year,” Wennink said.
“Then, given that the average lead time for our tools is … let’s say one and a half to two years, if you look at the relatively short projections … the potential downturn is, of course, when customers place their orders. I’m not canceling because I could be at the end of the line when this issue happens again.”
Companies like TSMC and Intel are ramping up production capacity globally, especially as the US and Europe move chip manufacturing closer to home. For example, TSMC plans to open two of his semiconductor factories in Arizona.
ASML caught in the geopolitical crosshairs
US introduces drastic export restrictions The aim is to separate China from major chip and semiconductor manufacturing equipment. As a result, ASML told its US employees to stop serving Chinese customers.
This month, Dutch Prime Minister Mark Rutte traveled to Washington to meet with US President Joe Biden. At this time, it is unclear whether the US is pushing for a blanket ban on his ASML equipment shipments to China.
Rutte told CNBC last week as a bystander at the World Economic Forum in Davos, Switzerland, that he hopes the issue will be resolved “in a few months, perhaps sooner.”
“I think it can be done in a friendly way, including by countries that don’t want to use high-end technology and defense systems,” Rutte told CNBC.
For now, ASML can ship old tools called deep ultraviolet (DUV) lithography machines to China, but not more EUV systems. ASML CEO Wennink said China will account for about 15% of his 2022 sales, with a “similar” amount this year.
Ultimately, he said, the situation will be resolved by the government.
“This is a complicated situation because it’s not just between the Netherlands and the US, it involves other European and Asian countries,” Wennink said.
“It’s up to them [governments]I have no choice but to follow what comes out.”
– CNBC’s Silvia Amaro contributed to this report.
