ASML Sees Signs of Rebound With Semiconductor Market at Nadir
(Bloomberg) -- ASML Holding NV said the semiconductor market has reached its nadir and there are now are signs of a rebound.
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“We believe that the market has now reached the lowest point of the dip,” ASML Chief Financial Officer Roger Dassen said in comments in the company’s 2023 annual report published on Wednesday. “Although we cannot predict the exact nature of the slope ahead, the recovery is nascent.”
ASML is the world’s top maker of lithography systems, machines that perform a crucial step in the process of creating semiconductors. The demand for its products is a bellwether for the industry, even as chipmakers including Intel Corp., Texas instruments Inc. and Infineon Technologies AG have warned of subdued sales this year.
The Veldhoven-based company is the only producer of extreme ultraviolet lithography machines that are used by Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and Intel for the most advanced fabrication. The equipment prints patterns of transistors onto silicon wafers, which are then sliced into individual chips.
ASML’s sales are dominated by these three companies. While it doesn’t disclose its top buyers, its largest customer bought €8.78 billion ($9.4 billion) of equipment in 2023, or 32% of its total net revenue. Last year, 54% of ASML’s total net sales were made to two customers.
“The longer-term trends are unmistakable,” Dassen said, citing artificial intelligence, electrification and the energy transition as boons to ASML’s business.
The company last quarter received record orders for its top-of-the-line EUV machines, boosting optimism for the industry which had been hit by inflation and recession fears last year.
ASML also benefited from strong demand from China last year as chipmakers there rushed to get lithography machines ahead of export controls meant to hobble Beijing’s semiconductor ambitions. The rise in Chinese demand helped offset the effects of a global chip industry slowdown on ASML.
Read More: ASML’s China Sales Surged Despite Secret Dutch Deal With US
ASML recently unveiled its latest chipmaking machine. The new advanced equipment weighs as much as two Airbus A320s and costs €350 million.
Dassen said a large number of fabs are set to open in the next couple of years and “all of these new fabs will need our tools.”
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