In the first quarter, ASML failed to meet analysts’ financial expectations. However, the company’s CEO Peter Wennink stresses that 2024 is a “transition year”, and the overall guidance for the year remains unchanged.
Sales for Q1 2024 brought in 5.29 billion euros, significantly less than a quarter ago (7.24 billion). It is also a significantly smaller number than the same quarter last year when ASML took home a sales figure of 6.7 billion euros.
Interestingly, Chinese customers represented 49 percent of all ASML orders. Sales to China have been restricted for some time, which means that, for example, the most advanced (and most lucrative) EUV machines are not allowed to be sold to this part of the customer base.
Tip: ASML faces uncertain 2024 with export restrictions and transition period
Additional export restrictions began in 2024, but the United States does not want to stop there. For example, President Joe Biden’s administration is reportedly pushing to halt the maintenance of current ASML machines in China. Below the line, ASML expects the new restrictions to affect 15 percent of its targeted sales to China.
Transition year
Departing CEO Peter Wennink says expectations for this calendar year need not be adjusted. The last two quarters should make up for the somewhat disappointing figures. “We see 2024 as a transition year,” Wennink said.
It means the current quarter is expected to show relatively little improvement. ASML estimates sales will be between 5.7 billion and 6.2 billion euros, again below the 6.5 billion euros forecast by analysts.
Prelude to High-NA
In the somewhat longer term, ASML has relatively little to fear. It delivered the first High-NA EUV test machine late last year to Intel. This new technology builds on EUV, which exploded ASML’s market value between 2018 and now.
It will be a few more years before High-NA EUV is ready for production, but parties like TSMC, Samsung and Intel will need many of ASML’s machines. Since they appear to cost roughly 400 million euros each, the medium-term future for the chip machine maker remains bright.
Also read: Latest ASML machine reaches “first light” milestone