ASML Holding NV reported new orders that were lower than analysts' expectations, affected by a decline in demand for its most advanced chip.
The leading European technology company 's recent bookings amounted to 3.6 billion euros in the first quarter, deviating from forecasts that spoke of 4.63 billion euros. In the previous quarter, the company had recorded new orders of 9.19 billion euros, confirming its strong purchasing power.
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ASML shares fell 7.3% on the Tradegate platform compared to the last close in Amsterdam on Tuesday .
ASML, the world's sole supplier of equipment for manufacturing the most complex chips, faced a drop in demand for its advanced extreme ultraviolet machines ,with orders falling to 656 million euros from 5.6 billion euros in the previous quarter. The company expects a period of lower sales in the second quarter before demand recovers.
“Our full-year 2024 guidance remains stable, with a stronger second half than the first as the industry continues to recover,” Chief Executive Officer Peter Wennink said in a statement on Wednesday. “We see 2024 as a transition year.”.
ASML is forecasting sales for the current quarter in the range of 5.7 to 6.2 billion euros, although it had previously forecast sales of up to 6.5 billion euros ahead of the expected recovery in demand.
“It is clear that the industry is recovering,” said Chief Financial Officer Roger Dassen. “We expect a recovery for the industry in 2024, while working towards an even stronger year in 2025.”.
Despite the company’s problems due to weaknesses in Taiwan and the United States – the main markets for ASML’s EUV machines – its business in China remained relatively strong. Sales came in at 1.9 billion euros in the first quarter, compared with 2.2 billion euros in the previous period. Dutch and US export regulations aimed at curbing Beijing’s chip development ambitions have affected the Veldhoven-based company’s ability to supply its high-tech equipment to China.
ASML has been able to benefit from increased demand in China over the past year as Chinese chipmakers rushed to equip themselves with advanced machines, exceeding established limits. However, new regulations, which came into full effect on January 1, restrict ASML from selling its DUV immersion lithography machines – the second-highest capacity in its product line – in China.
ASML has never been able to market its complex EUV machines in China due to pressure from the US government. The company predicts that new export control regulations will affect up to 15% of its sales in China this year.
Recently, some of ASML's largest customers have reported impressive financial results. Earlier this month, Taiwan Semiconductor Manufacturing Co. revealed that its revenue grew at its fastest pace in more than a year.
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Christophe Fouquet, currently the executive director of ASML’s business operations, is set to take over as CEO as Wennink is set to retire this month. In taking on this new role, he will be tasked with managing geopolitical challenges from the US while also meeting shareholder expectations for continued growth. Under Wennink’s leadership for a decade, the company’s share value has soared by nearly 1,400%.
Source: bnnbloomberg
