Chip equipment firm ASML reports profit rise buts warns of flat 2024 amid tough market

Dutch firm ASML makes one of a very powerful items of equipment required to fabricate probably the most superior chips on the earth. U.S. chip curbs have left corporations, together with ASML, scrambling to determine what the principles imply in observe.

Emmanuel Dunand | AFP | Getty Images

Chip equipment firm ASML reported a year-on-year rise in profit within the third quarter and beat analyst estimates, however forecast 2024 income shall be flat.

ASML is one of a very powerful semiconductor corporations on the earth, producing instruments referred to as excessive ultraviolet lithography machines, that are required to fabricate probably the most superior chips globally.

Here’s how ASML did within the third quarter versus LSEG estimates:

  • Net gross sales: 6.67 billion euros ($7.1 billion) versus 6.71 billion euros anticipated
  • Net profit: 1.89 billion euros versus 1.8 billion euros anticipated

Net gross sales rose 15.5% from the 5.78 billion euro reported in the identical interval a 12 months earlier. Net profit jumped round 11% from the 1.7 billion euros reported in the identical interval a 12 months earlier.

Both third-quarter figures marked a decline from second-quarter outcomes.

“The semiconductor business is presently working by way of the underside of the cycle and our clients anticipate the inflection level to be seen by the top of this 12 months,” ASML CEO Peter Wennink mentioned in a Wednesday assertion. “We subsequently anticipate 2024 to be a transition 12 months.”

Wennink added that the corporate is taking a extra “conservative view” of 2024 and expects a income quantity much like 2023.

“But we additionally have a look at 2024 as an vital 12 months to arrange for important progress that we anticipate for 2025.”

The semiconductor market has had a tough year amid weak demand for merchandise like smartphones and laptops, which these elements go into. Companies like Taiwan’s TSMC and Samsung, two of the world’s largest chip producers and clients of ASML, have minimize their capital expenditure this 12 months consequently.

Still, ASML has reaffirmed its steering for internet gross sales to extend 30% year-on-year for 2023.

The Dutch firm has additionally been caught up within the tensions over know-how between the U.S. and China as a result of of the significance of its instruments.

In June, the Netherlands — the place ASML is headquartered — launched its own export restrictions on superior semiconductor equipment, with corporations now requiring a authorities license to take sure applied sciences overseas.

This got here after the U.S. launched its personal sweeping restrictions on know-how exports to China, and as Washington urged allies to comply with swimsuit.

ASML has maintained that these measures are unlikely to impression its 2023 monetary outcomes.

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