ASML orders up 24%, with China still the biggest market
While this year thus far has been less profitable for ASML, the tech giant saw orders for its chip making machines increase again over the past three months.
According to the company’s earnings report for the second quarter of 2024, net bookings (i.e. orders) reached €5.6bn — rising over 24% year-on-year.
A significant chunk consisted of orders for ASML’s EUV machines, which accounted for €2.5bn. The Dutch company is the world’s sole manufacturer of these Extreme Ultraviolet (EUV) lithography machines which produce the most high-end chips, such as the ones used for AI.
The rise in EUV orders is in line with the growing demand for AI chips — also benefiting chipmakers in the sector such as TSMC, ASML’s biggest client. The company’s sales in Taiwan, where TSMC is based, also increased from 6% to 11% between Q1 and Q2 2024.
“We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments,” said ASML President and CEO Christophe Fouquet.
Fouquet described 2024 as a “transition year,” following the semiconductor industry’s slowdown, repeating what former President and CEO Peter Wennink said in the previous quarter.
In Q2 of this year, ASML’s net sales and net income were higher compared to Q1, reaching €6.2bn and €1.5bn, respectively. They fell, however, by 9.5% and 18.7% year-on-year.
China remains ASML’s biggest market in 2024
Much like in Q1, China accounted for 49% of ASML’s sales in Q2 of this year. That’s despite the export restrictions of all the EUV machines and a number of Deep Ultraviolet (DUV) machines, which use older chipmaking technology.
With restricted access to advanced chipmaking tools — as part of a chip war with the US (and its allies) — China is emerging as the dominating producer of legacy chips, for use in electronic devices from home appliances to EVs.
Just before ASML published its figures today, citing insider sources, Bloomberg reported that the US is considering pressing its allies even further to prohibit maintenance of machines already sold to China.
In an interview with Dutch radio station BNR two weeks ago, Peter Wennink said that the US-China chip war could last for “decades.”
How ASML’s entanglement in the semiconductor geopolitics will impact the company will show in time. For now, the manufacturer expects a stronger second half of 2024, with Q3 net sales between €6.7bn and €7.3bn.
