After posting third-quarter results that met analysts’ forecasts on Wednesday, semiconductor equipment maker ASML Holding NV (ASML.AS) warned about flat revenues in 2024 as consumers continue to practice fiscal restraint.
The largest technology company in Europe posted a net profit of $2.0 billion (1.9 billion euros) for the three months ending September 30, compared to $1.7 billion (1.7 billion euros) the previous year. According to LSEG statistics, this exceeded expert consensus projections of 1.81 billion euros. Analysts predict revenues will rise from around 27.2 billion euros this year to 28.5 billion euros in 2024.
“The semiconductor industry is currently working through the bottom of the cycle and our customers expect the inflection point to be visible by the end of this year,” Peter Wennink, our CEO, said in a statement.
Yet “customers continue to be uncertain about the shape of the demand recovery … we therefore expect 2024 to be a transition year.”
Chip manufacturers, including TSMC, Samsung, and Intel, employ ASML’s lithography equipment, which are industry leaders. These expensive machines are required to produce the intricate circuitry found in chips.
According to CFO Roger Dassen, customers are “very cautious with cash, very cautious with capex, and as a result, they’re also very cautious with placing orders.”
Given the development intentions of its clients in Asia, the United States, and Europe, he said that ASML still had a 35 billion euro backlog of orders and that a robust 2025 would come after a tumultuous 2024.
Sales in the third quarter increased 15% to 6.7 billion euros, again in line with expert predictions. A new U.S. regulation prohibiting semiconductor equipment sales to China was revealed on Tuesday, but Dassen said the business did not anticipate any financial impact from the change.
The third-largest market for ASML in recent years, behind Taiwan and South Korea, China was the largest in the third quarter, accounting for 46% of sales.
Chinese clients were purchasing comparatively older equipment, and ASML had told them that, starting in January, they were unlikely to get licenses from the Dutch government to purchase one of its more cutting-edge product lines.
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