U.S. President Joe Biden’s administration plans to pressure the Netherlands next week to stop its top chipmaking equipment maker ASML from supplying some of China’s tools, two people familiar with the matter said, as the United States relies on allies to stymie Beijing’s tech industry .
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ASML First-quarter profit beat expectations while sales missed expectations, the company said on Monday, sticking to its full-year forecast.
Here’s how ASML’s performance compares to the LSEG consensus forecast:
- Net sales: 5.29 billion euros ($5.62 billion), compared with expectations of 5.39 billion euros.
- net income: 1.22 billion euros, expected to be 1.07 billion euros.
Net sales fell 21.6% compared with the same period last year, and net profit fell 37.4%. ASML’s net sales fell at the midpoint of the company’s guidance.
The closely watched net bookings of ASML machinery and equipment totaled 3.6 billion euros in the first quarter, down 4% year-on-year, but down nearly two-thirds from the December quarter.
ASML is one of the world’s most important semiconductor companies, producing tools known as extreme ultraviolet lithography machines, which are needed to make the world’s most advanced wafers.
Last year, weak demand for consumer electronics such as smartphones and laptops hit chipmakers that produce semiconductors for those devices. This in turn has resulted in slightly weaker demand for ASML devices.
However, various semiconductor companies such as memory chip maker Samsung are seeing a rebound in demand.
ASML has previously said it expects net sales in 2024 to be similar to 2023, and reiterated that forecast on Monday. ASML reported 2023 net sales of 27.6 billion euros.
ASML CEO Peter Wennink said in a statement: “Our outlook for the full year 2024 is unchanged, and we expect the second half to be stronger than the first half, which is consistent with the industry’s continued recovery from the downturn.”
“We view 2024 as a transition year and will continue to invest in capacity improvements and technology to prepare for the turn of the cycle.”
ASML’s equipment is purchased by the world’s largest chip manufacturers such as TSMC, Samsung, and Intel.
Part of ASML’s optimism comes from the fact that Samsung, TSMC and Intel are ramping up U.S. production capacity with funding from the U.S. Chip and Science Act.
“I think by 2025 you’ll see all three coming together. The opening of new fabs, strong secular trends,” ASML Chief Financial Officer Roger Dassen said in a pre-recorded video interview. And the industry is recovering.
ASML has yet to address the impact of export restrictions to China in the first quarter.
Under pressure from the United States, the Dutch government last June imposed restrictions on exports of advanced semiconductor equipment, including ASML’s machines.
However, sales of its systems to China accounted for 49% of total sales in the first quarter, up from 39% in the fourth quarter of 2023, the company said in a filing accompanying the results.
ASML previously said export restrictions would affect 10% to 15% of sales in China this year.
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