ASML Reports Drop in Revenue and Profit as it Faces Weaker First-Quarter Bookings

ASML, the leading equipment supplier to chip manufacturers, has reported €5.29 billion in sales in Q1 2024 vs €6.75 billion in Q1 2023.
ASML NXEASML’s net income was €1.2 billion in Q1 2024 vs €1.95 billion in Q1 2023.

ASML expects sales between €5.7 billion and €6.2 billion, and a gross margin between 50 percent and 51 percent in Q2 2024.

ASML expects 2024 sales will be similar to 2023.

ASML disclosed on Wednesday a dip in first-quarter new bookings. First-quarter bookings amounted to 3.6 billion euros ($3.8 billion). Despite this, sales to China remained resilient amidst ongoing U.S.-led trade restrictions.

Though the Dutch conglomerate observed a temporary lull in demand for its most advanced machines, it anticipates a robust performance in 2025, fueled by the increasing demand for AI and memory chips, particularly from top customer TSMC of Taiwan, a key supplier to Nvidia and Apple.

ASML’s dominance in the lithography systems market positions it to benefit from the construction of new chip plants supported by governments in Taiwan, South Korea, Japan, and the United States.

ASML has diversified its revenue streams, with approximately 25 percent of earnings derived from servicing, maintenance, and upgrades of its expanding installed base of equipment.

In the first quarter, Chinese demand buoyed earnings, with sales to China accounting for a record 49 percent of total sales, approximately 2 billion euros. Chinese chipmakers, restricted from acquiring advanced equipment due to U.S. export controls, turned to older ASML equipment to manufacture a range of products, from household appliances to smartphones.

Despite the quarterly challenges, ASML reaffirmed its 2024 financial forecasts, maintaining flat sales compared to 2023’s 27.6 billion euros.

ASML CEO Peter Wennink expressed confidence in a stronger second half of the year, aligning with the industry’s ongoing recovery, characterizing 2024 as a transitional period. Peter Wennink will be succeeded by Christophe Fouquet at the company’s annual meeting on April 24.

Han Dieperink, chief investment officer at Aureus, echoed sentiments of confidence in ASML’s long-term growth outlook, emphasizing the company’s market dominance and defensive qualities.

ASML Ships EUV Lithography System to Second Customer

ASML also announced the shipment of one of its latest “High NA” EUV lithography systems to a second undisclosed customer, Reuters news report said.

Following the delivery of a High NA tool to Intel between December and January, ASML did not disclose the identity of the new recipient. Potential candidates for the advanced system could include prominent players such as contract chipmaker TSMC, known for producing chips for Nvidia and Apple, or Samsung.

Priced at 350 million euros ($370 million) each, these machines are anticipated to pave the way for next-generation chips, boasting smaller sizes and enhanced speed.

Both TSMC and Samsung have expressed intentions to adopt the new system, heralding a significant leap in the transistor density achievable on individual chips.

Intel has also committed to integrating High NA tools into its production process, with plans to utilize them for its 14A series chips in early production by 2026-2027.

The inaugural High NA machine was assembled at ASML’s headquarters in Veldhoven, Netherlands, where companies embracing EUV technology are granted access for testing purposes. ASML has received orders for between 10 and 20 of these machines.

Baburajan Kizhakedath