ASML reported better results than expected in the second quarter of this year. The bottom line was a net profit of 1.6 billion euros, compared to 1.2 billion euros in the previous quarter. In the same period a year earlier, however, the chip machine manufacturer noted 1.9 billion euros. Half of the turnover over the past quarter was at the expense of China.
Christophe Fouquet, the new CEO of the Netherlands’ largest tech company, is pleased with the latest quarterly results. ‘Our total net turnover in the second quarter was 6.2 billion euros, at the top end of our expectations, with a gross margin of 51.5 percent, which is above expectations.’ The order book stood at 5.6 billion euros at the end of last month, compared to 3.6 billion euros at the end of March 2024.
The so-called ‘immersion systems’, duv machines (deep ultraviolet) in which a layer of water between the lens and the silicon wafer improves the resolution, are selling well. ASML sees the total inventory levels of semiconductors improving at its customers. It is also important that the utilisation rate of the lithographic machines is improving for both bi-logic and memory customers. Fouquet therefore expects the recovery of the sector to continue in the second half of the year. He sees 2024 as a transition year with continued investments in both capacity expansion and technology. For 2024, he still expects a turnover equal to that of the record year 2023, when it was 27.6 billion euros.
Gross margin
ASML maintains its expectation that turnover will grow to thirty to forty billion euros in 2025 with a gross margin of 54 to 56 percent. In 2030, this should increase to 44 to sixty billion euros with a margin of 56 to sixty percent. Strong developments in the field of AI are driving demand for chips. Despite the export restrictions, China remained by far the best customer in the past quarter with a turnover share of just under fifty percent. South Korea (28 percent) and Taiwan (11 percent) come next. Only four percent of the machines remain in Europe, while the US takes three percent.
Half of the turnover in the past quarter came from the sale of so-called arfi-lithography systems that combine an argon fluoride laser with a layer of water between the lens and the wafer. EUV systems accounted for almost a third of the turnover. The R&D costs will remain at a high level in the coming quarter at 1.1 billion euros.
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[UPDATE, 18:30] Despite the much-improved order position and the favorable quarterly figures, ASML shares fell by no less than 11 percent on Wednesday. 47 billion euros of stock market value was burned. The sentiment turned in response to reports from Bloomberg that the American government is pushing for new export restrictions. ASML would be faced with these if the chip machine manufacturer continues to supply advanced tools and equipment to China. The Americans also have machine builder Tokyo Electron in their sights.
Because ASML and almost all Western suppliers use American technology, an American boycott might put them in acute danger. Yesterday, Bank of America pointed out this danger in a commentary on the new ASML figures. Other banks such as Jefferies, KBC and Degroof Petercam, on the other hand, showed no signs of concern. The latter two even raised their target price for ASML shares. But due to the sharp drop on Wednesday, this target is far away. ASM from Almere also suffered from the threatening new measures from Washington