ASML makes hay while suns shines, but Trump could rain on its parade
- Reference: 1738158888
- News link: https://www.theregister.co.uk/2025/01/29/asml_q4_2024/
- Source link:
The maker of advanced semiconductor production machinery said its net sales were up in both the final quarter of 2024 and for the full year, while its bookings in Q4 jumped to €7.1 billion ($7.4 billion) from €2.6 billion ($2.7 billion) the previous quarter.
However, CEO Christophe Fouquet claimed that bookings "are not necessarily a good reflection or an accurate reflection of the business momentum" and said the company will stop providing this number after this year, instead listing its backlog of orders.
[1]
ASML is understood to be the only company in the world that makes extreme ultraviolet (EUV) photolithography equipment, which can reproduce finer and more complex patterns on silicon wafers, allowing for more transistors to be crammed into chip designs.
[2]
[3]
For Q4, ASML reported revenue of €9.3 billion ($9.7 billion), up 29 percent [4]year-on-year , and net income of €2.7 billion ($2.8 billion), up from €2.077 billion ($2.15 billion)..
Meanwhile, for the full year, the Netherlands-based company saw income dip to €7.6 billion ($7.9 billion) on total net sales of €28.3 billion ($29.4 billion), up from €27.6 billion in the prior 12 months.
[5]
Fouquet said Q4 revenue was primarily driven by "additional upgrades," while ASML also recognized revenue on two of its High NA EUV systems and shipped a third to a customer in the fourth quarter. Intel is believed to be the recipient of the first two systems, which are the most advanced produced by ASML.
The CEO credited the company's financial results to demand for AI-related products from its chipmaking customers.
"AI is the clear driver. I think we started to see that last year. In fact, at this point, we really believe that AI is creating a shift in the market and we have seen customers benefiting from it very strongly. Others maybe a bit less," Fouquet said.
[6]
If AI demand remains strong and ASML's customers are able to build output capacity, the company reckons its future performance could rise towards the highest part of the range of its forecast.
"On the other hand, there's still quite some uncertainty on the other customers and this also justifies the lowest part of the range," the CEO said.
Those forecasts are for total net sales between €7.5 billion ($7.8 billion) and €8.0 billion ($8.3 billion) for the first quarter of 2025, and for the full year 2025 to come in at between €30 billion ($31.2 billion) and €35 billion ($36.4 billion).
In response to a question about China, Fouquet said he expected its sales there to return to a normal level.
"We had a lot of discussion about China in 2023-2024 because our revenue in China was extremely high. We have explained that this was caused by the fact that we are still working on some backlog created in 2022, when our capacity was not big enough to fulfil the whole market," he explained.
"2025 will be a year where we see China going back to a more normal ratio in our business. So I think we're going to see again numbers people used to see before 2023." This means that China should account for roughly 20 percent of the ASML's revenue, instead of the 49 percent during [7]some recent quarters .
Also in the news over the past several years has been growing US interference in the products that ASML can sell to Chinese customers. While the Netherlands government has barred it from selling its most advanced EUV kit into the Middle Kingdom, the White House has been trying to impose [8]ever tighter export restrictions on the company, allegedly to curb China's ability to make cutting-edge AI chips.
[9]$373M ASML chipmaker shrinks to $228 – but it's made of Lego
[10]Uncle Sam lays out plans for $825M EUV R&D site in New York
[11]ASML faces turbulence amid stock drop, customer delays
[12]Uncle Sam reportedly considers capping AI chip shipments to Middle East
Former ASML boss Peter Wennink gave his opinion [13]last year that the US-China "chip wars" are mainly ideological in nature.
It was [14]reported last week that the Netherlands expects newly inaugurated President Trump to keep pressing to further restrict ASML's exports of chipmaking machines to China.
Dutch Prime Minister Dick Schoof told Bloomberg: "When it comes to ASML, we currently have discussions on a weekly basis." He said ASML is very important for the country's economy and "we want to make sure that position doesn't change."
Speaking of the most recent measures, Fouquet said: "The combination and the impact of those, both US and Dutch measures, has been appropriately reflected in the guidance that we've given before. So, the €30-35 billion properly reflects the limitations that we see from an export controls perspective."
He also intimated that AI would continue to drive growth for the Dutch firm.
"We truly believe that AI is going to bring even more opportunity to this semiconductor industry," Fouquet said, adding: "The second thing is that AI is going to drive more advanced technology to address some of the challenges on cost, on power consumption. We believe that this will drive more advanced DRAM and logic technology. This is, of course, good for lithography."
ASML stock is up by more than 7 percent and is now back to where it was before the market was hit earlier this week by the shockwave from Chinese start-up [15]DeepSeek releasing AI models that challenged the best America had to offer.
"Demand for ASML's products is still likely to remain strong in the future," said James Bull, Technology Industry Senior Analyst at consultants RSM UK.
"While DeepSeek's significant progress has led to fears over future demand for advanced AI chips, which are manufactured using ASML's equipment, ASML remains the sole manufacturer globally. This means that as AI is rapidly becoming more cost efficient, ASML may be well-placed to benefit from the rising adoption of AI as the technology becomes accessible to a wider audience." ®
Get our [16]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z5pet4V9VxBt4bCF0Gq82QAAAIg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z5pet4V9VxBt4bCF0Gq82QAAAIg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z5pet4V9VxBt4bCF0Gq82QAAAIg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[4] https://www.theregister.co.uk/2025/01/29/asml_q4_2024/www.theregister.com/2024/01/24/asml_orders_boom/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z5pet4V9VxBt4bCF0Gq82QAAAIg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z5pet4V9VxBt4bCF0Gq82QAAAIg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2024/04/17/asml_profits_slump_40_percent_q1_2024/
[8] https://www.theregister.com/2022/07/05/us_expands_efforts_to_hamstring/
[9] https://www.theregister.com/2024/12/03/asml_lego_twinscan/
[10] https://www.theregister.com/2024/10/31/uncle_sam_lays_out_plans/
[11] https://www.theregister.com/2024/10/21/asml_setbacks/
[12] https://www.theregister.com/2024/10/16/us_export_cap_ai_chip_middle_east/
[13] https://www.theregister.com/2024/07/08/us_china_chip_wars_ideological/
[14] https://www.bloomberg.com/news/articles/2025-01-22/trump-to-push-hard-on-asml-export-controls-dutch-premier-says
[15] https://www.theregister.com/2025/01/27/tech_stocks_tank_as_us/
[16] https://whitepapers.theregister.com/
If the US starts breaching WTO agreements at scale at what point does the rest of the world start sanctioning them and disregarding any sanctions they've been placing. It could take Trump's successor a fair while to dig out of pariah status.
"If he punishes the Netherlands for this then it could get to the point where they and other countries decide it's easier and safer to deal even more with China to make up the losses and costs of dealing with a US that expects to get its own way all the time and lashes out like a spoilt kid when it doesn't."
It is a little bit like TMSC in Taiwan. The USA needs TMSC to deliver their chips. Taiwan need the USA to defend itself against the Mainland.
The USA needs ASML to produce the machines to make its chips (or let TMSC produce its chips). The Netherlands need the USA to defend themselves against Russia (and China and ...).
At the moment, the USA is threatening to block Dutch exports to the USA and to prevent imports to the Netherlands of the requisite components for its machines to get ASML to toe the line. But this strategy has its limits as ASML failing will hurt everyone else too.
> The Netherlands need the USA to defend themselves against Russia (and China and ...).
They do? Interesting.
When exactly has Russia or China tried to invade the Netherlands?
So, what exactly and where exactly is that protection that NL allegedly "needs"?
When exactly has Russia or China tried to invade the Netherlands?
"Inside Russia’s shocking proposals to obliterate the Netherlands"
https://www.msn.com/en-us/news/world/alert-in-europe-as-russia-considers-nuclear-strike-on-the-netherlands/ss-BB1nJIxn
China has their own navy to reach the Netherlands if no one defends them.
Re: When exactly has Russia or China tried to invade the Netherlands?
The Netherlands is part of the EU & NATO.
Anybody invading one EU country is courtesy of the mutual defence pact at war with the lot, and the same comments apply to NATO. Additionally, Britain got involved in both world wars due to Germany invading the only deep water ports in Europe that can conveniently be used to invade the UK; if somebody invaded them again then we'd be looking to keep them out of unfriendly hands.
If somebody nukes the netherlands then given nuclear weapons will be flying and landing within 100km of the borders of two nuclear powers (That's Britain & France for Americans; both are nuclear powers) then they are liable to end up with one or the other side tossing nukes back. Which the Russians know; they aren't stupid. They just talk shit because their social media arm is the most successful part of their army. They detected that americans scare easily and bow to their threats and hence the event of the drunken nuclear threat of the day for the last couple of years.
They won't carry through with their threats; Russians know that they would be the epicenter of a large glowing radiactive crater if their fired nukes first. Even China has told Russians to lay off the drink and threats or else they'll stop propping the Russian economy up because they don't like being associated with crazy people.
Apart from the tariff threat, what can Trump do? If the US were to commit to buying the equivalent $$ of kit that the Chinese might buy then fair enough, but chucking your toys out the pram because China is catching up and threatening people is a hiding to nothing. If he punishes the Netherlands for this then it could get to the point where they and other countries decide it's easier and safer to deal even more with China to make up the losses and costs of dealing with a US that expects to get its own way all the time and lashes out like a spoilt kid when it doesn't.