ASML product production process (Source: ASML)
ASML, first quarter sales decreased by 26.9%… net profit fell by 40%
After the earnings announcement, the stock price fell by more than 4% in the Dutch market.
EUV demand recovery is expected to be difficult in the second quarter… “Rebound in the second half”
Dutch semiconductor equipment company ASML, known as ‘Super Eul’, announced poor first quarter performance. Analysis suggests that the demand for extreme ultraviolet (EUV) lithography equipment is decreasing and that it is being affected by the US export restrictions to China.
ASML is plummeting by more than 4% on the Dutch stock market on the 17th due to weaker-than-expected first quarter performance and second quarter outlook.
ASML announced on this day that net sales in the first quarter of 2024 were 5.29 billion euros (about 7.79 trillion won), a 26.9% decrease compared to the previous quarter. It fell short of market expectations (5.39 billion euros) compiled by LSEG.
Net profit for the period was 1.224 billion euros (1.8031 trillion won), exceeding market expectations but plummeting by 40.4% compared to the previous quarter.
Net bookings in the first quarter were recorded at 3.6 billion euros (approximately 5.3 trillion won), including 656 million euros (approximately 965.8 billion won) in EUV exposure equipment, an essential equipment for advanced microprocessing. It decreased by about two-thirds compared to the previous quarter. Net Booking Sales is a figure that includes all sales orders for which written approval has been accepted, plus adjustments for inflation.
Peter Bennink, CEO of ASML, explained, “Total net sales in the first quarter were in the middle of market guidance,” adding, “This was mainly the result of one-off factors in product mix.”
ASML sales classification chart by product, customer, and region (Source: ASML)
EUV demand recovery is expected to be difficult in the second quarter… rebound in the second half
ASML’s EUV exposure equipment is evaluated as essential equipment for fine processes with a circuit line width of 7 nanometers or less. Foundries (specialized semiconductor consignment production companies) such as Taiwan’s TSMC, Samsung Electronics, and U.S. Intel are ASML’s main customers.
The poor performance is believed to be due to fewer new orders than expected in the first quarter of this year. According to Bloomberg, demand for EUV equipment in particular fell sharply, reaching 656 million euros, down to one-ninth of the previous quarter (5.6 billion euros). There are predictions that sales in the coming second quarter, before EUV demand recovers, will also be weaker than expected.
US regulations on China are also affecting ASML sales. ASML will no longer be able to sell high-performance exposure equipment (DUV) to China under the measure, which will be fully implemented from January 1, 2024.
However, overall sales in 2023 are expected to be similar to last year. Sales in the second quarter are expected to reach 5.7 to 6.2 billion euros, with a gross profit margin of 50 to 51%.
ASML CEO Peter Bennink said, “The outlook for the entire year 2024 remains unchanged,” and added, “We expect the second half of the year to be stronger than the first half as the semiconductor industry continues to recover from the economic downturn.”
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