Although the year has been less profitable for ASML so far, the technology giant has seen an increase in orders for its chip manufacturing machines in the last three months.
According to the company's earnings report for the second quarter of 2024, net bookings (i.e. orders) reached 5.6 billion euros – an increase of over 24% year-on-year.
A significant part of this was orders for EUV machines from ASML, which amounted to 2.5 billion euros. The Dutch company is the world's only manufacturer of these extreme ultraviolet (EUV) lithography machines, which are used to produce most high-end chips, such as those used in artificial intelligence.
The increase in EUV orders is in line with growing demand for AI chips – and also benefits chipmakers in the industry such as TSMC, ASML's largest customer. The company's sales in Taiwan, where TSMC is based, also rose from 6% to 11% between the first and second quarters of 2024.
“We are currently seeing strong developments in artificial intelligence, which is driving most of the industry’s recovery and growth ahead of other market segments,” said Christophe Fouquet, President and CEO of ASML.
Fouquet described 2024 as a “transition year” following the slowdown in the semiconductor industry, echoing what former President and CEO Peter Wennink said in the previous quarter.
In the second quarter of this year, ASML's net sales and net profit were higher than in the first quarter, reaching EUR 6.2 billion and EUR 1.5 billion, respectively, but decreased by 9.5% and 18.7% year-on-year, respectively.
China will remain ASML’s largest market in 2024
Similar to the first quarter, China accounted for 49% of ASML's revenue in the second quarter of this year, despite export restrictions on all EUV machines and a number of deep ultraviolet (DUV) machines that use older chipmaking technology.
Due to its limited access to advanced chipmaking tools – as part of a chip war with the US (and its allies) – China is emerging as the dominant producer of legacy chips for use in electronic devices ranging from home appliances to electric vehicles.
Shortly before ASML released its figures today, Bloomberg reported, citing insider sources, that the US is considering pushing its allies even harder to ban maintenance of machines that have already been sold to China.
In an interview with Dutch radio station BNR two weeks ago, Peter Wennink said the chip war between the US and China could last “decades”.
Time will tell how ASML's involvement in semiconductor geopolitics will affect the company. For now, the manufacturer expects a stronger second half of 2024 with third-quarter net sales of between 6.7 and 7.3 billion euros.
Comments are closed.