ASML Surpasses Q2 Earnings Expectations, Boosted by AI-Driven Demand

ASML beats Q2 earnings forecasts; bookings rise on AI demand

AMSTERDAM, July 17 (Reuters) - ASML beat second-quarter earnings forecasts on Wednesday as the world's largest supplier of chipmaking equipment saw strong sales to China and a rise in new AI-driven bookings. In his first results as CEO Christophe Fouquet said ASML continues to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," Fouquet said in a statement. Net income of 1.6 billion euros ($1.74 billion) for the quarter ended June 30 was down 19% from a year earlier but beat the 1.41 billion expected by analysts, LSEG data showed. Revenue fell 9.5% to 6.2 billion euros but topped an analysts estimate of 6.04 billion. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Chinese chipmakers, however, face escalating U.S.-led restrictions on ASML's top-end gear. Instead, they have been ramping up purchases of equipment used to make older generations of chips widely used in cars and industrial applications. China accounted for 49% of ASML's sales in the second quarter. Bloomberg reported on Tuesday that the U.S. is privately telling allies including the Netherlands and Japan that it may invoke the "Foreign Direct Product Rule" to unilaterally restrict products made using U.S. technology. Analysts said the report could weigh on ASML shares on Wednesday. "The geopolitical angle....is more likely to be in focus today than the results," Citi analysts wrote in a note. ASML declined to comment. Shares in Europe's second-largest listed company behind pharmaceuticals maker Novo Nordisk were seen trading 4% lower ahead of the start of trade in Amsterdam, and pulling other European chip stocks with them. ASML's shares have risen 45% this year and are trading near record highs, about 40 times forecast 12-month forward earnings. Its new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines -- vital to manufacturing AI and smartphone chips. Analysts had expected ASML's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha. ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." TSMC, Intel and Samsung are engaged in new construction projects that will be outfitted with equipment in 2025-2027. ($1 = 0.9172 euros) (Reporting by Toby Sterling; editing by Janane Venkatraman, Varun H K and Jason Neely)

ASML beats Q2 earnings forecasts; bookings rise on AI demand

ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Company CEO Christophe Fouquet said ASML continues to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025.ASML beat second-quarter earnings forecasts on Wednesday as the world's largest supplier of chipmaking equipment saw strong sales to China and a rise in new AI-driven bookings. In his first results as CEO Christophe Fouquet said ASML continues to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," Fouquet said in a statement. Net income of 1.6 billion euros ($1.74 billion) for the quarter ended June 30 was down 19% from a year earlier but beat the 1.41 billion expected by analysts, LSEG data showed. Revenue fell 9.5% to 6.2 billion euros but topped an analysts estimate of 6.04 billion. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Chinese chipmakers, however, face escalating U.S.-led restrictions on ASML's top-end gear. Instead, they have been ramping up purchases of equipment used to make older generations of chips widely used in cars and industrial applications. China accounted for 49% of ASML's sales in the second quarter. Bloomberg reported on Tuesday that the U.S. is privately telling allies including the Netherlands and Japan that it may invoke the "Foreign Direct Product Rule" to unilaterally restrict products made using U.S. technology. Analysts said the report could weigh on ASML shares on Wednesday. "The geopolitical angle....is more likely to be in focus today than the results," Citi analysts wrote in a note. ASML declined to comment. Shares in Europe's second-largest listed company behind pharmaceuticals maker Novo Nordisk were seen trading 4% lower ahead of the start of trade in Amsterdam, and pulling other European chip stocks with them. ASML's shares have risen 45% this year and are trading near record highs, about 40 times forecast 12-month forward earnings. Its new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines -- vital to manufacturing AI and smartphone chips. Analysts had expected ASML's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha. ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." TSMC, Intel and Samsung are engaged in new construction projects that will be outfitted with equipment in 2025-2027. ($1 = 0.9172 euros)

ASML beats Q2 earnings forecasts; bookings rise on AI demand

AMSTERDAM - ASML beat second-quarter earnings forecasts on Wednesday as the world's largest supplier of chipmaking equipment saw strong sales to China and a rise in new AI-driven bookings. In his first results as CEO Christophe Fouquet said ASML continues to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," Fouquet said in a statement. Net income of 1.6 billion euros ($1.74 billion) for the quarter ended June 30 was down 19% from a year earlier but beat the 1.41 billion expected by analysts, LSEG data showed. Revenue fell 9.5% to 6.2 billion euros but topped an analysts estimate of 6.04 billion. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Chinese chipmakers, however, face escalating U.S.-led restrictions on ASML's top-end gear. Instead, they have been ramping up purchases of equipment used to make older generations of chips widely used in cars and industrial applications. China accounted for 49% of ASML's sales in the second quarter. Bloomberg reported on Tuesday that the U.S. is privately telling allies including the Netherlands and Japan that it may invoke the "Foreign Direct Product Rule" to unilaterally restrict products made using U.S. technology. Analysts said the report could weigh on ASML shares on Wednesday. "The geopolitical angle....is more likely to be in focus today than the results," Citi analysts wrote in a note. ASML declined to comment. Shares in Europe's second-largest listed company behind pharmaceuticals maker Novo Nordisk were seen trading 4% lower ahead of the start of trade in Amsterdam, and pulling other European chip stocks with them. ASML's shares have risen 45% this year and are trading near record highs, about 40 times forecast 12-month forward earnings. Its new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines -- vital to manufacturing AI and smartphone chips. Analysts had expected ASML's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha. ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." TSMC, Intel and Samsung are engaged in new construction projects that will be outfitted with equipment in 2025-2027. ($1 = 0.9172 euros) (Reporting by Toby Sterling; editing by Janane Venkatraman, Varun H K and Jason Neely)

ASML shares fall 7% as China risks cloud solid Q2 earnings

Shares in ASML, the biggest supplier of computer chip- making equipment, fell on Wednesday on the prospect pressure from the U.S. government could lead to tighter restrictions on its exports to China. The investor concerns overshadowed second-quarter earnings at Europe's largest technology company that beat forecasts and showed a rise in AI-linked bookings, as well as continued strong sales in China. Shares fell by more than 7% after Bloomberg reported on Tuesday that the U.S. is telling allies, including the Netherlands, it may take unilateral action to restrict exports of chip equipment to China if they fail to do so themselves. ASML, which is already restricted from selling most of its advanced product lines in China, declined comment. The Dutch foreign ministry said it could not comment on the report but was in close contact with partners it did not specify on export controls, which are a matter of national security. In his first results as CEO, Christophe Fouquet said ASML continued to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," Fouquet said in a statement. Net income of 1.6 billion euros ($1.74 billion) for the quarter ended June 30 was down 19% from a year earlier but beat the 1.41 billion expected by analysts, LSEG data showed. Revenue fell 9.5% to 6.2 billion euros but topped an analysts estimate of 6.04 billion. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Chinese chipmakers, facing escalating U.S.-led restrictions on ASML's top-end gear, have increased purchases of equipment used to make older generations of chips widely used in cars and industrial applications. China, usually ASML's third market after Taiwan and South Korea, accounted for more than 2 billion euros in lithography system sales in the second quarter, around 49% of the total. Analysts linked the fall in share price to the Bloomberg report and remarks Bloomberg published from a June interview with U.S. presidential candidate Donald Trump in which he said Taiwan had taken "100% of our chip business". ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "The geopolitical angle....is more likely to be in focus today than the results," Citi analysts wrote in a note. "The arguments being referenced [in the Bloomberg report] are not new, but pressure is building" for further restrictions they said. Shares in Europe's second-largest listed company behind pharmaceuticals maker Novo Nordisk fell 7.9% to 900.00 euros at 1236 GMT, pulling other European chip stocks lower. ASML's shares are up 32% in the year to date. In the earnings report, new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines - vital to manufacturing AI and smartphone chips. Analysts had expected ASML's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." TSMC, Intel and Samsung are engaged in construction projects that will be outfitted with equipment in 2025-2027. ($1 = 0.9172 euros)

ASML beats Q2 earnings forecasts; bookings rise on AI demand

The Dutch company's new CEO Christophe Fouquet said that ASML continues to view 2024 as a "transition year" in which its performance will be about flat as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," he said in a statement. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Its closely-watched new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines -- vital to manufacture AI and smartphone chips. ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." Analysts had expected the company's order book to increase by about 5 billion euros, according to estimates compiled by Visible Alpha. However, the results were below ASML's net income of 1.94 billion euros on revenue of 6.90 billion euros a year ago. TSMC, Intel and Samsung are engaged in new construction projects that will be outfitted with equipment in 2025-2027. (Reporting by Toby Sterling; Editing by Tom Hogue, Janane Venkatraman and Varun H K)

ASML shares fall 7% as China risks cloud solid Q2 earnings

Shares fell by more than 7% after Bloomberg reported on Tuesday that the U.S. is telling allies, including the Netherlands, it may take unilateral action to restrict exports of chip equipment to China if they fail to do so themselves. ASML, which is already restricted from selling most of its advanced product lines in China, declined comment. The Dutch foreign ministry said it could not comment on the report but was in close contact with partners it did not specify on export controls, which are a matter of national security. In his first results as CEO, Christophe Fouquet said ASML continued to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," Fouquet said in a statement. Net income of 1.6 billion euros ($1.74 billion) for the quarter ended June 30 was down 19% from a year earlier but beat the 1.41 billion expected by analysts, LSEG data showed. Revenue fell 9.5% to 6.2 billion euros but topped an analysts estimate of 6.04 billion. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Chinese chipmakers, facing escalating U.S.-led restrictions on ASML's top-end gear, have increased purchases of equipment used to make older generations of chips widely used in cars and industrial applications. China, usually ASML's third market after Taiwan and South Korea, accounted for more than 2 billion euros in lithography system sales in the second quarter, around 49% of the total. Analysts linked the fall in share price to the Bloomberg report and remarks Bloomberg published from a June interview with U.S. presidential candidate Donald Trump in which he said Taiwan had taken "100% of our chip business". ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "The geopolitical angle....is more likely to be in focus today than the results," Citi analysts wrote in a note. "The arguments being referenced [in the Bloomberg report] are not new, but pressure is building" for further restrictions they said. Shares in Europe's second-largest listed company behind pharmaceuticals maker Novo Nordisk fell 7.9% to 900.00 euros at 1236 GMT, pulling other European chip stocks lower. In the earnings report, new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines - vital to manufacturing AI and smartphone chips. Analysts had expected ASML's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." TSMC, Intel and Samsung are engaged in construction projects that will be outfitted with equipment in 2025-2027. (Reporting by Toby Sterling; editing by Janane Venkatraman, Varun H K, Jason Neely and Barbara Lewis)

ASML shares fall 10% as China risks cloud solid Q2 earnings

Shares fell by more than 10% after Bloomberg reported on Tuesday that the U.S. is telling allies, including the Netherlands, it may take unilateral action to restrict exports of chip equipment to China if they fail to do so themselves. "We don't comment on the rumours," said Christophe Fouquet in his first analyst call as CEO following the earnings. ASML is already restricted from selling most of its advanced product lines in China, and Fouquet added that the company also already faces restrictions on servicing existing equipment in some Chinese plants as a result of US and European rules. The Dutch foreign ministry said it could not comment on the report but was in close contact with allies on export controls, which it said were a matter of national security. Fouquet said ASML continued to view 2024 as a "transition year" with broadly flat performance as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," Fouquet said. Net income of 1.6 billion euros ($1.74 billion) for the quarter ended June 30 was down 19% from a year earlier but beat the 1.41 billion expected by analysts, LSEG data showed. Revenue fell 9.5% to 6.2 billion euros but topped an analysts estimate of 6.04 billion. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Chinese chipmakers, facing escalating U.S.-led restrictions on ASML's top-end gear, have increased purchases of equipment used to make older generations of chips widely used in cars and industrial applications. China, usually ASML's third market after Taiwan and South Korea, accounted for more than 2 billion euros in lithography system sales in the second quarter, around 49% of the total. CFO Roger Dassen said about 20% of the company's current order backlog is for sales to China, and those tools would likely be sold elsewhere if not in China, given the world's growing demand for older chips. Analysts linked the fall in share price to the Bloomberg report and remarks Bloomberg published from a June interview with U.S. presidential candidate Donald Trump in which he said Taiwan had taken "100% of our chip business". ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "The geopolitical angle....is more likely to be in focus today than the results," Citi analysts wrote in a note. "The arguments being referenced [in the Bloomberg report] are not new, but pressure is building" for further restrictions they said. Shares in Europe's second-largest listed company behind pharmaceuticals maker Novo Nordisk fell 7.9% to 900.00 euros at 1236 GMT, pulling other European chip stocks lower. ASML's shares were up 28% in the year to date following Wednesday's decline. In the earnings report, new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines - vital to manufacturing AI and smartphone chips. Analysts had expected ASML's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." TSMC, Intel and Samsung are engaged in construction projects that will be outfitted with equipment in 2025-2027. (Reporting by Toby Sterling; editing by Janane Venkatraman, Varun H K, Jason Neely and Barbara Lewis)

ASML's order book expected to jump on AI chip boom

AMSTERDAM, July 16 (Reuters) - ASML, the top equipment supplier to computer chip makers, is expected to report an influx of new orders when its new boss delivers second-quarter results on Wednesday, as customers expand capacity to meet booming demand for AI chips. Another focus will be whether Chinese firms have continued heavy purchasing of equipment used to make older generations of chips such as those used in electric cars, a concern for Western policymakers who have curbed buying of more advanced technology. Analysts say the company may upgrade guidance as key makers of cutting-edge chips - including Taiwan's TSMC, which manufactures chips for Nvidia and Apple, and reports earnings on Thursday - may increase and accelerate equipment purchases. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. It is the only maker of lithography systems using extreme ultraviolet (EUV) wavelengths, needed by TSMC to make the most complex chips for smart phones and AI chips. "We expect ASML's order received value to reach close to 5 billion euros in the second quarter, higher than consensus estimates", Mihuzo analyst Kevin Wang said, with strong orders from TSMC of ASML's EUV product line. The results are the first under ASML's new CEO Christophe Fouquet, who took over the reins at Europe's biggest tech firm as it navigates the ongoing U.S.-China fight over chips. ASML, worth about 400 billion euros ($437 billion), has described 2024 as a "transition" year when business will be flat before rebounding strongly in 2025, driven by demand for its most advanced tools. Shares in the group have risen 45% this year and are trading near record highs above 1,000 euros each, about 40 times forecast 12-month forward earnings, significantly higher than the STOXX Europe 600 tech index. A growing order book would reassure investors that demand for the company's most advanced products is returning following a weak first half of 2024, in which it relied heavily on orders of older equipment from China. Analysts are expecting second-quarter net income of 1.41 billion euros on revenue of 6.04 billion euros, according to the mean estimate from 16 analysts, based on LSEG data. That compares with net income of 1.94 billion euros on revenue of 6.90 billion euros in the same period a year ago. ORDER BACKLOG ASML had a 38 billion euro order backlog at the end of the first quarter. That means it needs new orders of 4 billion-6 billion euros each quarter to meet its forecast of 2025 sales at the upper end of a 30 billion-40 billion euro range. The company's machines, which cost up to $300 million each, have delivery lead times of 12-18 months, and orders are closely coordinated with customers including Samsung, Intel , and memory specialists SK Hynix and Micron . For slightly older generations of chipmaking technology, it competes with Canon and Nikon of Japan. Chinese firms including Shanghai Micro Electronics Equipment (SMEE) are attempting to develop competing lithography tools. But Chinese chipmakers, who are prevented by U.S.-led export restrictions from obtaining ASML's best tools, have escalated their purchases of older ASML equipment in the past year, representing nearly half of company sales in the first quarter. China's rapid increase means lost market share and more competition for non-Chinese firms. The European Commission has begun polling European chip industry firms on whether they feel Chinese state subsidies are distorting markets. ASML argues that world needs older chips, as was shown by shortages during the COVID pandemic, and China is stepping in to supply them. ($1 = 0.9164 euros) (Reporting by Toby Sterling; Editing by Jan Harvey)

ASML beats Q2 earnings forecasts; bookings rise on AI demand

ASML, the top chipmaking tool supplier, reported better-than-expected Q2 net income of $1.74B on €6.2B revenue, attributed to strong China sales and high new bookings. CEO Fouquet noted 2024 as a transition year with AI driving growth. Advanced EUV systems saw demand from TSMC, Intel, Nvidia, and Apple, with equipment planned for 2025-2027 projects.ASML, the world's biggest chipmaking equipment supplier, reported better-than-expected second-quarter earnings on Wednesday on strong sales to China and with higher new bookings than the first quarter. ASML reported net income of 1.6 billion euros ($1.74 billion) on revenue of 6.2 billion euros for the quarter ended June 30. Analysts had expected 1.41 billion euros on revenue of 6.04 billion euros, according to LSEG data. The Dutch company's new CEO Christophe Fouquet said that ASML continues to view 2024 as a "transition year" in which its performance will be about flat as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," he said in a statement. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Its closely-watched new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines -- vital to manufacture AI and smartphone chips. ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." Analysts had expected the company's order book to increase by about 5 billion euros, according to estimates compiled by Visible Alpha. However, the results were below ASML's net income of 1.94 billion euros on revenue of 6.90 billion euros a year ago. TSMC, Intel and Samsung are engaged in new construction projects that will be outfitted with equipment in 2025-2027. ($1 = 0.9172 euros)

ASML's order book expected to jump on AI chip boom

Analysts say the company may upgrade guidance as key makers of cutting-edge chips - including Taiwan's TSMC, which manufactures chips for Nvidia and Apple, and reports earnings on Thursday - may increase and accelerate equipment purchases. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. It is the only maker of lithography systems using extreme ultraviolet (EUV) wavelengths, needed by TSMC to make the most complex chips for smart phones and AI chips. "We expect ASML's order received value to reach close to 5 billion euros in the second quarter, higher than consensus estimates", Mihuzo analyst Kevin Wang said, with strong orders from TSMC of ASML's EUV product line. The results are the first under ASML's new CEO Christophe Fouquet, who took over the reins at Europe's biggest tech firm as it navigates the ongoing U.S.-China fight over chips. ASML, worth about 400 billion euros ($437 billion), has described 2024 as a "transition" year when business will be flat before rebounding strongly in 2025, driven by demand for its most advanced tools. Shares in the group have risen 45% this year and are trading near record highs above 1,000 euros each, about 40 times forecast 12-month forward earnings, significantly higher than the STOXX Europe 600 tech index. A growing order book would reassure investors that demand for the company's most advanced products is returning following a weak first half of 2024, in which it relied heavily on orders of older equipment from China. Analysts are expecting second-quarter net income of 1.41 billion euros on revenue of 6.04 billion euros, according to the mean estimate from 16 analysts, based on LSEG data. That compares with net income of 1.94 billion euros on revenue of 6.90 billion euros in the same period a year ago. ASML had a 38 billion euro order backlog at the end of the first quarter. That means it needs new orders of 4 billion-6 billion euros each quarter to meet its forecast of 2025 sales at the upper end of a 30 billion-40 billion euro range. The company's machines, which cost up to $300 million each, have delivery lead times of 12-18 months, and orders are closely coordinated with customers including Samsung, Intel, and memory specialists SK Hynix and Micron. For slightly older generations of chipmaking technology, it competes with Canon and Nikon of Japan. Chinese firms including Shanghai Micro Electronics Equipment (SMEE) are attempting to develop competing lithography tools. But Chinese chipmakers, who are prevented by U.S.-led export restrictions from obtaining ASML's best tools, have escalated their purchases of older ASML equipment in the past year, representing nearly half of company sales in the first quarter. China's rapid increase means lost market share and more competition for non-Chinese firms. The European Commission has begun polling European chip industry firms on whether they feel Chinese state subsidies are distorting markets. ASML argues that world needs older chips, as was shown by shortages during the COVID pandemic, and China is stepping in to supply them. (Reporting by Toby Sterling; Editing by Jan Harvey)

ASML's order book expected to benefit from AI chip boom

Analysts say the company may upgrade guidance as key makers of cutting-edge chips - including Taiwan's TSMC, which manufactures chips for Nvidia and Apple, and reports earnings on Thursday - may increase and accelerate equipment purchases. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. It is the only maker of lithography systems using extreme ultraviolet (EUV) wavelengths, needed by TSMC to make the most complex chips for smart phones and AI chips. "We expect ASML's order received value to reach close to 5 billion euros in the second quarter, higher than consensus estimates", Mihuzo analyst Kevin Wang said, with strong orders from TSMC of ASML's EUV product line. The results are the first under ASML's new CEO Christophe Fouquet, who took over the reins at Europe's biggest tech firm as it navigates the ongoing U.S.-China fight over chips. ASML, worth about 400 billion euros ($437 billion), has described 2024 as a "transition" year when business will be flat before rebounding strongly in 2025, driven by demand for its most advanced tools. Shares in the group have risen 45% this year and are trading near record highs above 1,000 euros each, about 40 times forecast 12-month forward earnings, significantly higher than the STOXX Europe 600 tech index. A growing order book would reassure investors that demand for the company's most advanced products is returning following a weak first half of 2024, in which it relied heavily on orders of older equipment from China. Analysts are expecting second-quarter net income of 1.41 billion euros on revenue of 6.04 billion euros, according to the mean estimate from 16 analysts, based on LSEG data. That compares with net income of 1.94 billion euros on revenue of 6.90 billion euros in the same period a year ago. ASML had a 38 billion euro order backlog at the end of the first quarter. That means it needs new orders of 4 billion-6 billion euros each quarter to meet its forecast of 2025 sales at the upper end of a 30 billion-40 billion euro range. The company's machines, which cost up to $300 million each, have delivery lead times of 12-18 months, and orders are closely coordinated with customers including Samsung, Intel, and memory specialists SK Hynix and Micron. For slightly older generations of chipmaking technology, it competes with Canon and Nikon of Japan. Chinese firms including Shanghai Micro Electronics Equipment (SMEE) are attempting to develop competing lithography tools. But Chinese chipmakers, who are prevented by U.S.-led export restrictions from obtaining ASML's best tools, have escalated their purchases of older ASML equipment in the past year, representing nearly half of company sales in the first quarter. China's rapid increase means lost market share and more competition for non-Chinese firms. The European Commission has begun polling European chip industry firms on whether they feel Chinese state subsidies are distorting markets. ASML argues that world needs older chips, as was shown by shortages during the COVID pandemic, and China is stepping in to supply them. (Reporting by Toby Sterling; Editing by Jan Harvey)

ASML's order book expected to benefit from AI chip boom

ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Analysts say ASML may upgrade guidance as key makers of cutting-edge chips - including Taiwan's TSMC, which manufactures chips for Nvidia and Apple. ASML, the top equipment supplier to computer chip makers, is expected to report an influx of new orders when its new boss delivers second-quarter results on Wednesday, as customers expand capacity to meet booming demand for AI chips. Another focus will be whether Chinese firms have continued heavy purchasing of equipment used to make older generations of chips such as those used in electric cars, a concern for Western policymakers who have curbed buying of more advanced technology. Analysts say the company may upgrade guidance as key makers of cutting-edge chips - including Taiwan's TSMC, which manufactures chips for Nvidia and Apple, and reports earnings on Thursday - may increase and accelerate equipment purchases. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. It is the only maker of lithography systems using extreme ultraviolet (EUV) wavelengths, needed by TSMC to make the most complex chips for smart phones and AI chips. "We expect ASML's order received value to reach close to 5 billion euros in the second quarter, higher than consensus estimates", Mihuzo analyst Kevin Wang said, with strong orders from TSMC of ASML's EUV product line. The results are the first under ASML's new CEO Christophe Fouquet, who took over the reins at Europe's biggest tech firm as it navigates the ongoing U.S.-China fight over chips. ASML, worth about 400 billion euros ($437 billion), has described 2024 as a "transition" year when business will be flat before rebounding strongly in 2025, driven by demand for its most advanced tools. Shares in the group have risen 45% this year and are trading near record highs above 1,000 euros each, about 40 times forecast 12-month forward earnings, significantly higher than the STOXX Europe 600 tech index. A growing order book would reassure investors that demand for the company's most advanced products is returning following a weak first half of 2024, in which it relied heavily on orders of older equipment from China. Analysts are expecting second-quarter net income of 1.41 billion euros on revenue of 6.04 billion euros, according to the mean estimate from 16 analysts, based on LSEG data. That compares with net income of 1.94 billion euros on revenue of 6.90 billion euros in the same period a year ago. Order backlog ASML had a 38 billion euro order backlog at the end of the first quarter. That means it needs new orders of 4 billion-6 billion euros each quarter to meet its forecast of 2025 sales at the upper end of a 30 billion-40 billion euro range. The company's machines, which cost up to $300 million each, have delivery lead times of 12-18 months, and orders are closely coordinated with customers including Samsung, Intel, and memory specialists SK Hynix and Micron. For slightly older generations of chipmaking technology, it competes with Canon and Nikon of Japan. Chinese firms including Shanghai Micro Electronics Equipment (SMEE) are attempting to develop competing lithography tools. But Chinese chipmakers, who are prevented by U.S.-led export restrictions from obtaining ASML's best tools, have escalated their purchases of older ASML equipment in the past year, representing nearly half of company sales in the first quarter. China's rapid increase means lost market share and more competition for non-Chinese firms. The European Commission has begun polling European chip industry firms on whether they feel Chinese state subsidies are distorting markets. ASML argues that world needs older chips, as was shown by shortages during the COVID pandemic, and China is stepping in to supply them. ($1 = 0.9164 euros)

ASML posts Q2 earnings ahead of forecasts; bookings rise

AMSTERDAM, July 17 (Reuters) - ASML, the largest equipment supplier to computer chip makers, reported better-than-expected second-quarter earnings on Wednesday on strong sales to China and higher new bookings than in the first quarter of 2024. ASML reported second-quarter net income of 1.6 billion euros on revenues of 6.2 billion euros. Analysts had expected 1.41 billion euros on revenue of 6.04 billion euros, according to LSEG data. The company's new CEO Christophe Fouquet said in a statement that the company continues to view 2024 as a "transition year" in which its performance will be about flat as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," he said in a statement. ASML's closely watched new bookings increased to 5.6 billion euros ($6.11 billion) from 3.6 billion euros in the first quarter of 2024, with about half of that coming from the company's most advanced EUV product lines -- vital in the manufacture of AI chips and smartphones. Analysts had expected the company's order book to increase by about 5 billion euros, according to estimates compiled by Visible Alpha. The second-quarter numbers were lower than in the same period a year earlier, when net income was 1.94 billion euros and sales were 6.90 billion euros. ($1 = 0.9171 euros) (Reporting by Toby Sterling; Editing by Tom Hogue and Janane Venkatraman)

ASML orders up 24%, with China still the biggest market

The Dutch tech giant saw net income and sales in Q2 2024 fall year-over-year While this year thus far has been less profitable for ASML, the tech giant saw orders for its chip making machines increase again over the past three months. According to the company's earnings report for the second quarter of 2024, net bookings (i.e. orders) reached €5.6bn -- rising over 24% year-on-year. A significant chunk consisted of orders for ASML's EUV machines, which accounted for €2.5bn. The Dutch company is the world's sole manufacturer of these Extreme Ultraviolet (EUV) lithography machines which produce the most high-end chips, such as the ones used for AI. The rise in EUV orders is in line with the growing demand for AI chips -- also benefiting chipmakers in the sector such as TSMC, ASML's biggest client. The company's sales in Taiwan, where TSMC is based, also increased from 6% to 11% between Q1 and Q2 2024. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," said ASML President and CEO Christophe Fouquet. Fouquet described 2024 as a "transition year," following the semiconductor industry's slowdown, repeating what former President and CEO Peter Wennink said in the previous quarter. In Q2 of this year, ASML's net sales and net income were higher compared to Q1, reaching €6.2bn and €1.5bn, respectively. They fell, however, by 9.5% and 18.7% year-on-year. Much like in Q1, China accounted for 49% of ASML's sales in Q2 of this year. That's despite the export restrictions of all the EUV machines and a number of Deep Ultraviolet (DUV) machines, which use older chipmaking technology. With restricted access to advanced chipmaking tools -- as part of a chip war with the US (and its allies) -- China is emerging as the dominating producer of legacy chips, for use in electronic devices from home appliances to EVs. Just before ASML published its figures today, citing insider sources, Bloomberg reported that the US is considering pressing its allies even further to prohibit maintenance of machines already sold to China. In an interview with Dutch radio station BNR two weeks ago, Peter Wennink said that the US-China chip war could last for "decades." How ASML's entanglement in the semiconductor geopolitics will impact the company will show in time. For now, the manufacturer expects a stronger second half of 2024, with Q3 net sales between €6.7bn and €7.3bn.

ASML beats Q2 earnings forecasts; bookings rise on AI demand - ET Telecom

Devices 1 min read ASML beats Q2 earnings forecasts; bookings rise on AI demand The Dutch company's new CEO Christophe Fouquet said that ASML continues to view 2024 as a "transition year" in which its performance will be about flat as it prepares for a strong 2025. By Toby Sterling and Nathan Vifflin AMSTERDAM: ASML, the world's biggest chipmaking equipment supplier, reported better-than-expected second-quarter earnings on Wednesday on strong sales to China and with higher new bookings than the first quarter. ASML reported net income of 1.6 billion euros ($1.74 billion) on revenue of 6.2 billion euros for the quarter ended June 30. Analysts had expected 1.41 billion euros on revenue of 6.04 billion euros, according to LSEG data. The Dutch company's new CEO Christophe Fouquet said that ASML continues to view 2024 as a "transition year" in which its performance will be about flat as it prepares for a strong 2025. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," he said in a statement. ASML dominates the market for lithography systems, complex tools that use lasers to help create the tiny circuitry of computer chips. Its closely-watched new bookings increased to 5.6 billion euros from 3.6 billion euros in the first quarter, with about half of that coming from the its most advanced EUV product lines -- vital to manufacture AI and smartphone chips. ASML's top customer is Taiwan's TSMC, which makes chips for Nvidia and Apple. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." Analysts had expected the company's order book to increase to about 5 billion euros, according to estimates compiled by Visible Alpha. However, the results were below ASML's net income of 1.94 billion euros on revenue of 6.90 billion euros a year ago. TSMC, Intel and Samsung are engaged in new construction projects that will be outfitted with equipment in 2025-2027.

Earnings Preview: ASML's sales expected to continue decline

ASML is one of the world's largest semiconductor equipment manufacturers, supplying computer and smartphone chips to major chipmakers such as TSMC, Samsung, and Intel. The Dutch group is scheduled to report its second-quarter earnings on 17 July. Its share price has risen by 45% year-to-date amid the AI frenzy, outperforming the 8% growth of the benchmark Euro Stoxx 600 this year. Key metrics that will determine its upcoming earnings results include TSMC's orders and sales in China, with an expectation that the firm may continue to experience a decline in sales. The Taiwan-based semiconductor maker, TSMC, is ASML's largest customer, a primary Apple supplier. Therefore, due to the lump nature of orders, ASML's bookings are a main factor impacting the Dutch firm's quarterly results. Some analysts expect that the order contract may not be signed until the third quarter, which could boost ASML's full-year guidance but the result will not factor into the second quarter. Analysts anticipate that ASML will report net machinery bookings of €5.04 billion in the second quarter, up 12% from the same quarter in 2023. This would be a positive outcome for the firm after a 4% decline in the first quarter when it reported only €3.06 billion in new bookings. However, net sales are expected to be €6.08 billion, a fall of 12% from the same quarter last year, marking the second consecutive quarterly decline. In the first quarter, ASML disappointed investors with a 21.6% drop in net sales and a 37.4% slump in net income. ASML reported a gross profit margin of 51%, with a net income of €1.2 billion in the first quarter. The company forecasts a profit margin of between 50% and 51% in the second quarter. Analysts expect the margin to be around 50.6%. Its gross profit is expected to be near €3.08 billion, down 13% from the second quarter last year. China's sales remain a key metric for the Dutch firm's quarterly results. China has been one of the biggest markets for the tech firm, along with Taiwan and South Korea. However, sales in China may be affected by US export restrictions aimed at curbing China's ability to advance technology for military use. Nonetheless, sales of ASML's lithography systems in China accounted for 49% of its overall revenue in the first quarter, up from 39% in the fourth quarter of 2023. This increase has been driven by sales of its lower range of products that were not affected by US law. However, this momentum may not be sustainable as China reported a much weaker-than-expected second-quarter GDP, with domestic consumer demand remaining sluggish in the first half of the year. Apart from hardware sales, ASML's service segment is also a key contributor to its overall revenue, making up roughly 25% of its earnings. The service division includes servicing, maintenance, and upgrading of its equipment. The advanced technology, Extreme Ultraviolet (EUV), is expected to perform well and bolster the company's service revenue in the second quarter. EUV is a cutting-edge lithography process used in semiconductor manufacturing, which should be in high demand amid the AI boom. The company's technological advancement and its unique services have a positive prospect in the long term. In the first-quarter earnings call, CEO Peter Wenink said: "Our outlook for the full year 2024 is unchanged, with the second half of the year expected to be stronger than the first half, in line with the industry's continued recovery from the downturn." Chief financial officer, Roger Dassen, also expressed an optimistic outlook for 2025.

ASML Orders Beat Forecasts Amid AI Chip Boom -- Update

ASML Holding posted orders above analysts' expectations as chip makers rush to get their hands on key production equipment to meet booming demand for artificial intelligence. The Dutch group, which supplies semiconductor-making machinery to chip makers, booked 5.57 billion euros ($6.07 billion) in orders in the three months to the end of June, up from EUR4.50 billion a year earlier. Analysts had forecast nearly EUR5.04 billion in orders, according to consensus estimates by Visible Alpha. Sales declined to EUR6.24 billion from EUR6.90 billion, beating analysts' forecasts and company guidance. For the current quarter, the group expects sales between EUR6.7 billion and EUR7.3 billion. Net profit slipped to EUR1.58 billion from EUR1.94 billion, beating analysts' forecasts. Gross profit--a closely watched metric for companies operating in the semiconductor industry--came in at EUR3.21 billion, generating a 51.5% margin that beat consensus and company guidance. For the current quarter, ASML is forecasting a gross margin between 50% and 51%. This year, ASML is expecting sales to be similar to the EUR27.56 billion that it reported for 2023.

ASML Expected To Beat Estimates With Over $5B In Orders During Q2 Thanks To Rising AI Chip Demand - Apple (NASDAQ:AAPL), ASML Holding (NASDAQ:ASML)

ASML Holding NV ASML, the leading supplier of equipment to computer chip manufacturers, is poised to witness a surge in new orders, driven by the escalating demand for AI chips. This development is likely to be announced on Wednesday when the company's new CEO presents the second-quarter results. What Happened: The anticipated influx of orders is attributed to the increasing demand for AI chips, a trend that is expected to prompt ASML's clients to expand their production capacity, reported Reuters. "We expect ASML's order received value to reach close to €5 billion (approx. $5.45 billion) in the second quarter, higher than consensus estimates", Mihuzo analyst Kevin Wang said, with robust orders from TSMC for ASML's EUV product line. This surge is largely driven by robust orders from key players in the cutting-edge chip manufacturing sector, such as Taiwan's Taiwan Semiconductor Mfg. Co. Ltd. TSM, which produces chips for NVIDIA Corp. NVDA and Apple Inc. AAPL. ASML's new CEO, Christophe Fouquet, is expected to present these results amid the ongoing U.S.-China chip dispute. The company, valued at approximately €400 billion (approx. $436 billion), has projected 2024 as a "transition" year, with a strong rebound in 2025 due to the demand for its most advanced tools. See Also: No More Getting High On Hemp In America? Multiple States Begin Intoxicating Hemp Crackdown Why It Matters: The anticipated surge in orders for ASML comes amid a broader context of geopolitical and market dynamics. The U.S. has been pressuring Japan and the Netherlands recently to tighten export controls on chipmaking equipment to China. This move aims to restrict China's access to advanced semiconductor technology, which could enhance its military capabilities. This development is part of a broader strategy to maintain technological superiority and national security. Moreover, ASML has been highlighted as a top pick in the European semiconductor equipment sector. Analysts have pointed out its crucial role in AI infrastructure, which is expected to drive multiple expansions. The increased demand for EUV tools and higher gross margins have led to optimistic revenue and earnings projections for the coming years. Price Action: ASML closed at $1,063.63, down 1.99%, on Monday. In after-hours trading, the stock gained 0.46%. Year to date, ASML's stock has risen by 48.36%, according to the data from Benzinga Pro. Read Next: Bitcoin, Ethereum, Dogecoin Continue Their Green Streak, But 'Big Test' Could Come On A $60K Retest Image Via Shutterstock This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote Market News and Data brought to you by Benzinga APIs

ASML Stock Up 49% In 2024, Falls On Fear Of China Export Curbs

Demand for machines used to build computer chips is likely to increase due to the boom in demand for generative artificial intelligence. One company, Netherlands-based ASML, is the world's dominant supplier of these extreme ultraviolet (EUV) lithography machines -- which "are required to manufacture the most advanced chips," noted CNBC. ASML's machines are expensive and take a long time to build. "Sporting a price tag of over $300 million each, in November 2023, buyers faced a two-year wait once they placed an order," noted my new book, Brain Rush. ASML's second quarter 2024 results beat expectations due to demand for AI chips. Nevertheless, ASML shares fell 9% on fear of a decline in demand for its machines in China as a result of more export curbs, reported Barron's. The drop in ASML shares could represent a buying opportunity as demand for the company's product rises in in 2025 and beyond. ASML's stock had risen 49% in 2024 as of July 16, yet the company's shares fell after reporting expectations-beating results. ASML expressed optimism about the company's future. "We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," ASML CEO Christophe Fouquet said in a statement. Nevertheless, worries about the future persist. "While there are still uncertainties in the market, primarily driven by the macro environment, we expect industry recovery to continue in the second half of the year," Fouquet said. "We see 2024 as a transition year with continued investments in both capacity ramp and technology. We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments," he added. "EUV orders increased substantially" in the quarter, Mihuzo Securities analyst Kevin Wang told Reuters. "We attribute this to strong orders from TSMC and Intel." ASML has been under government pressure -- from the U.S. and the Netherlands -- to restrict exports of its latest EUV machines to China. The company said such restrictions would "impact 10% to 15% of it's China sales this year," CNBC reported. In the second quarter of 2024, 49% of ASML's business came from exporting its older equipment to China, according to Reuters. ASML stock is slightly under-valued according to Wall Street analysts. Based on three analysts offering 12-month price targets for ASML Holding the stock would need to rise 2.3% to reach the average of $1,092.50, noted TipRanks. Demand for EUVs could pick up in 2025 -- thus resulting in faster than anticipated growth in ASML revenues. Last year, Jeffries forecast strong demand from TSMC driven by growth in AI. Specifically, TSMC was anticipated to use ASML machines to build 5 nanometer and 3 nanometer parts "to power machine learning and AI training and inference workloads," note Brain Rush. Jeffries estimated ASML's revenue growth would average 21% between 2022 and 2025. ASML confirmed such demand from TSMC and Samsung. "The industry expects to be in a cyclical upturn in 2025, Fouquet said in a pre-recorded video addressing the company's Q2 2024 earnings, reported CNBC. "As a result, we need to prepare for a number of new fabs that are being built today across the globe. Those fabs will be spread geographically and are strategic for all our customers. They are all scheduled to take our systems," he added. Another analyst expects AI to account for a growing share of ASML's revenues. AI isa "relatively small part" of ASML revenues, Ben Barringer, technology analyst at Quilter Cheviot, told CNBC. "But that's going to grow very significantly over the next little while," added Barringer. The upcoming presidential election could make things more difficult for ASML. If Biden wins a second term, export restrictions on ASML could increase. "The Biden administration is said to be considering implementing more restrictions on ASML Holding that would prevent it from selling equipment to China," notes Bloomberg. If former president Donald Trump wins, Taiwan may not receive U.S. military protection from an invasion by China, "I think, Taiwan should pay us for defense," Trump said in an interview with Bloomberg Businessweek. "You know, we're no different than an insurance company. Taiwan doesn't give us anything," he added. Whether a killer app emerges for generative AI is likely to be more important for ASML's future than the U.S. election results. That's because demand for GPUs will trail off -- along with the urge to buy ASML's machines -- unless companies find a way to make their investments in generative AI pay off.

Why ASML Stock Is Down Today

Shares of the Dutch tech company traded down 10% as of 10:30 ET on reports the United States is considering tighter restrictions on tech sales to China. Strong quarter, tough questions ASML makes the machines that make semiconductor chips, providing the technology that makes tech trends including artificial intelligence possible. The company reported second-quarter net profit of 1.58 billion euros on net sales of 6.24 billion euros, topping the 1.43 billion-euro profit on sales of 6.03 billion euros that analysts had expected. Net bookings totaled 5.6 billion euros, up 24% from a year ago, and ASML generated a 51.5% gross margin. "In line with previous quarters, overall semiconductor inventory levels continue to improve," CEO Christophe Fouquet said in a statement. "While there are still uncertainties in the market, primarily driven by the macro environment, we expect industry recovery to continue in the second half of the year." But investors were more focused on a report that the Biden administration has told allies it is considering drastic steps to crack down on ASML technology going to China. The U.S. government is considering restricting ASML's ability to service and repair systems already operating in China, putting ASML and other foreign companies on a equal footing to U.S. companies. Is ASML stock a buy? The geopolitical risk is real and unlikely to go away until at least after the U.S. election. Investors need to be braced for volatility and headline risk in the months to come. But for long-term-focused investors, there's a lot to like about ASML. The company is the only source of the massive machines necessary to make the smallest and most powerful chips, giving it a powerful competitive position. The focus on China could also help stimulate future sales as semiconductor manufacturers look to diversify their geographical footprint away from Taiwan. ASML is a stock that nearly never goes on sale, and even after the Wednesday decline, the shares still trade at 48 times earnings. Should it fall further on the uncertainty, investors could get a buying opportunity.