ASML Holding NV, Europe's largest tech
firm, has exceeded first-quarter earnings
forecasts despite some cautionary signs
from its customers. The company posted
a net profit of €1.96 billion ($2.15 billion),
triple that of the previous year, on
revenue that rose 91% to €6.74 billion. This
was ahead of analysts' expectations of
net profit of €1.62 billion on revenue of
€6.31 billion. The semiconductor industry
leader dominates the market for
lithography equipment used to create
minute circuitry in chips. Despite its order
backlog of over €38.9 billion, the firm's
shares fell 2.5% to €574.00, but remain up
over 10% year-to-date.
ASML faces restrictions on exporting
some equipment to China from this
summer, due to concerns about the "dual
use" of technology that could have
military applications. Although sales to
China dipped in the first quarter, the firm
anticipates them to improve throughout
the rest of the year. ASML is a key player
in the industry and its customers,
including TSMC, Samsung and Intel, have
invested billions in expansion.
However, the company's finance chief,
Roger Dassen, noted that some major
companies are "delaying the timing of
their demand for certain tools", while
memory customers are limiting their
capex. Some caution has been raised
following news that Samsung will cut
production due to a downturn in
semiconductor demand, while SK Hynix
and Micron have reduced spending
plans. Despite this, ASML is confident that
demand still outstrips capacity for this
year, with a sales growth forecast of 25%
and sales of €6.5-€6.7 billion in the
second quarter. JPMorgan believes that
neither 2023 nor 2024 estimates are at
risk for the company.
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