Munich Orders are still being placed with Dutch chip provider ASML: “Our order book is 40 billion euros, we’ve never had that before,” he said ASML-Chief Peter Wennink on Wednesday. The most valuable technology group in Europe will grow strongly this year. Wennink adds: “Demand is still far greater than our capabilities.”

The company leader promises an increase in sales of more than 25 percent in the current year. This is a much faster upward trend than in 2022, when revenue increased 14 percent. The ASML chief announced that 2023 would offer many more chip-making systems than last year.

Despite the good prospects, Wennink cautioned against euphoria. Rising interest rates, high inflation, and geopolitical tensions are leaving their mark on chip producers, i.e. ASML customers. “Utilization of our machines in the factories is falling because customers are reducing their inventories.” However, this trend will reverse in the second half of the year, Wennink predicted. Last but not least, the end of the Covid restrictions in China is contributing to this.

ASML customers expect a short recession

There’s a reason the current bad business for semiconductor makers isn’t reflected in sales: “Customers assume the recession will be much shorter than our lead times.”

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With its so-called EUV machines, ASML is an indispensable supplier to the chip industry. EUV stands for extreme ultraviolet light, to which semiconductors are exposed. Only this technology makes it possible to produce next-generation chips with frame sizes of less than seven nanometers. Only ASML in the whole world masters this procedure.

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However, this technology has brought ASML to the center of politics. For years, ASML has been allowed under pressure from the USA do not deliver EUV machines to China. That still applies, Wennink explained Wednesday. In early October, the US government announced that it would restrict the export of chips and production equipment to the People’s Republic even more than before. The scope of exports to the country is therefore getting smaller and smaller. However, nothing has changed for ASML so far, Wennink explained. The company supplies systems to China that are less technologically sophisticated than EUVs.

>> Read here: 80 percent rise in share price since taking office: Interim boss makes Süss Microtec a star on the stock market

Earlier this year, Dutch Prime Minister Mark Rutte spoke with US President Joe Biden about the sanctions. However, it is not yet clear how things will continue. America tries Netherlands by their side and further restrict exports. “Now we have to wait until governments and politicians find a reasonable solution,” Wennink said. China is an important market for ASML: the group achieved 14 percent of sales with new systems in the People’s Republic last year.

Key customer TSMC is becoming more cautious

It would be even worse for ASML if the conflict between China and Taiwan escalated: more than 40 percent of new system sales come from Taiwan. The world’s largest contract manufacturer in the chip industry, TSMCis the key customer of the Dutch.

>> Read here: This is how semiconductor researchers in Belgium are shaping our future

TSMC is growing fast, but it’s also gotten a bit more cautious recently. The group has just announced that it will invest this year between 32,000 and 36,000 million dollars. At the low end of the range, this corresponds to a drop of around ten percent compared to 2022.

Peter Wennink

The ASML boss expects the plant manufacturer to continue to grow for a long time.


(Photo: Reuters)

Last year, ASML achieved sales of 21.2 billion euros, 2.6 billion more than in 2021. Profits fell by around five percent to 5.6 billion euros. In the fourth quarter, ASML beat analyst estimates. According to the company, profits increased from 1,770 to 1,820 million euros compared to the previous year. The turnover is 6,430 million euros. The bankers expected a surplus of 1.7 billion euros and a collection of 6.38 billion euros.

The share price has risen by about a fifth in the last three months. On Wednesday, investors took profits, the shares were trading slightly below the previous day at around 607 euros. However, the shares are far from the fall 2021 all-time high. At the time, investors were paying €760 per share.

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The analysts of Goldman Sachs they are now assuming that share certificates will go back up to EUR 750 within a year. ASML is worth about 240,000 million euros on the stock market, more than 100,000 million more than SAPthe most valuable German technology group.

Wennink said his company’s long-term prospects were excellent. Because chips are used in more and more areas of modern life. The group is expected to achieve sales of up to 60 billion euros by 2030.

More: Wolfspeed and ZF plan a chip factory in Saarland for more than two billion euros

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