ASML reports strong second quarter results amid market uncertainties

In the face of continued macro-economic uncertainties, ASML Holding, a prominent semiconductor equipment manufacturer, has announced impressive financial results for the second quarter of 2023.
ASML Holding chip business
The company reported sales of €6.9 billion, a notable increase from the €5.4 billion recorded during the same period last year. This surge in revenue led to a gross margin of 51.3 percent and a net profit of €1.9 billion ($2.1 billion), surpassing the previous year’s net profit of €1.4 billion.

The strong performance was underlined by the company’s robust quarterly bookings in Q2, which amounted to a staggering €4.5 billion, with €1.6 billion of that attributed to the highly advanced Extreme Ultraviolet (EUV) systems.

ASML CEO, Peter Wennink, addressed the challenges posed by the current market conditions, stating, “Our customers across different market segments are currently more cautious due to continued macro-economic uncertainties, and therefore expect a later recovery of their markets.”

However, Peter Wennink in its earnings report expressed confidence in resilience, given its substantial backlog of orders, totaling around 38 billion euros. This backlog provides the company with a solid foundation to navigate the short-term uncertainties and continue its growth trajectory.

Looking ahead, ASML expects its sales in Q3 2023 to fall within the range of €6.5 billion to €7.0 billion, with a gross margin of approximately 50 percent. Notably, Wennink raised the full-year sales growth forecast to 30 percent, up from the previous projection of 25 percent, indicating the company’s optimism for the rest of the fiscal year.

ASML’s dominance in the market for lithography systems, which are crucial in creating the intricate circuitry of chips, has enabled the company to serve almost every major chip maker. These advanced machines come with a hefty price tag of up to $200 million each, reflecting the high demand for ASML’s cutting-edge technology.

Despite the positive outlook, ASML acknowledged that some parts of the computer chip market are experiencing a downturn. However, the company noted that it appears to be bottoming out, and ASML’s order backlog remains larger than its current production capacity. To meet this demand, ASML is in the process of expanding its production capabilities.

A slight slowdown in the pace of equipment delivery has been observed among computer chip makers using ASML’s most advanced EUV systems. This trend is due to global expansion efforts, where new fabrication plants (fabs) are not yet fully prepared to receive EUV machines.

With ASML Holding’s strong financial position and its dedication to meeting market demands, the company is well-positioned to navigate the short-term challenges and remain a key player in the semiconductor industry. As technology continues to advance, ASML’s contributions will undoubtedly play a vital role in shaping the future of chip manufacturing and electronics worldwide.