ASML Holding, a critical supplier to the global chip-making industry, raised its annual sales guidance on Wednesday despite warning of a delayed recovery in the semiconductor industry
Dutch company ASML (ticker: ASML) supplies the ‘lithography’ machines that are essential for manufacturing semiconductors, with customers including Taiwan Semiconductor Manufacturing (TSM), Samsung Electronics (005930.Korea), and Intel (INTC).
“Our customers across different market segments are currently more cautious due to continued macroeconomic uncertainties, and therefore expect a later recovery of their markets. Also, the shape of the recovery slope is still unclear,” CEO Peter Wennink said in a statement.
However, that uncertainty didn’t stop ASML from raising its guidance for net sales growth this year to around 30%, compared with previous guidance of more than 25%. ASML said that was due to strong sales of its deep ultraviolet (DUV) lithography systems, which are older technology than its most advanced extreme ultraviolet (EUV) lithography.
American depositary receipts of ASML were down 1% in premarket trading on Wednesday.
ASML’s future growth could be hampered by increasing controls on its exports to China. ASML has been prohibited from exporting its EUV machines to China and the Dutch government recently said the company would need to apply for export licenses for all shipments of its most advanced DUV lithography systems.
“Our experts say that the export controls imposed on ASML with regards to China will only have a limited impact on its revenue targets, possibly not exceeding a 5% year-on-year decline. However, ASML is missing out on a promising growth market as the Chinese government heavily invests in the semiconductor industry,” wrote Albie Amankona, analyst at Third Bridge, in a research note on Wednesday.
ASML reported a second-quarter net profit of €1.94 billion ($2.18 billion), compared with €1.41 billion for the same period a year earlier. Quarterly net sales came to €6.90 billion, rising from €5.43 billion the prior year.
ASML said it expects third-quarter net sales of between €6.5 billion and €7.0 billion and a gross margin of around 50%.
Write to Adam Clark at [email protected]
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