ASML earnings report drags semiconductor stocks lower | Wilnesh News

Chip stocks fell on Wednesday after ASML, a major developer of semiconductor manufacturing equipment, said first-quarter order volume fell 61% from the previous quarter, a decline that exceeded investor expectations.

In Wednesday’s trading, AMD’s The stock price fell more than 4%, Nvidia The stock price fell about 3%, Intel Shares fell nearly 2% Qualcomm 2% discount.But the biggest declines hit chip technology companies armthe stock fell nearly 10% on Wednesday.

ASML The entire S&P 500 index fell less than 1% that day, but fell more than 8% on the day.

Essentially, ASML is the sole supplier of the machines needed to make the world’s most advanced wafers, which often cost hundreds of millions of dollars. The Dutch company shipped 449 “lithography” machines in 2023, and its main customers include the world’s top processor foundries: TSMC, Samsung and Intel.

Its top two customers account for more than half of its 2023 sales. TSMC and Samsung, based in Taiwan and South Korea respectively, both saw sales decline.

Foundries actually produce the chips designed by companies like Nvidia or Apple, so any sign that they are buying less equipment could point to a downturn in the cyclical semiconductor industry, which could impact chip companies’ sales to end customers. And since licensing companies like Arm get a few cents each time their technology is used to make wafers, fewer sales of manufacturing machines could mean fewer wafers entering the market overall.

Gross bookings for ASML machines fell 4% year over year, and CEO Peter Wennink said in a statement that he expects the second half of 2024 to be stronger than the first half as the semiconductor industry “recovers from the downturn,” adding that the company We are in a “transitional year”.

“It’s clear that some of the usual suspects are missing from the order book,” Winnick said on a conference call with analysts.

Winnick said on an earnings call that he will retire at the end of this month. He will be replaced by current Chief Commercial Officer Christophe Fouquet.

Winnick said he expects companies such as Intel and TSMC that build foundries in the United States to place additional orders for lithography machines later this year. ASML also said it expects government subsidies to chip factories, such as the US CHIPS Act, to boost its sales. The company did not disclose how export restrictions to China would impact its business.

“If you look at the plans announced by some of our larger customers, it’s clear that there will be a need for significant orders over the next few quarters,” Winnick said.