On April 17, it was reported that due to the newly disclosed first-quarter orders far lower than market expectations, the global lithography giant$ASML Holding (ASML.US)$The stock price dropped sharply.

During the night trading session of US stocks, Asma once plummeted by more than 11%; in the European market on April 17, Asma's stock price once fell by more than 6%. Asmack fell nearly 5% before the US stock market on April 17.

Some analysts said that Asmack's latest financial results were not what many investors wanted or expected; the decline was greater than expected, which may be a worrying early warning sign.

Currently, Asma's market value is 385.5 billion US dollars, which is equivalent to about RMB 2.74 trillion.

Asmack orders plummeted

Today, Asmat, the technology company with the highest market capitalization in Europe and a leading global lithography machine company, released its financial report for the first quarter of 2024. The data showed that in the first quarter, the company's new orders amounted to €3.61 billion (including €656 million EUV orders), far below market expectations of €5.1 billion. Compared to the record order volume of 9.19 billion euros in the fourth quarter of 2023, orders for the first quarter of this year fell by nearly two-thirds.

After the above data was disclosed, in the European market, Asma's stock price once dived by more than 6%, and has now fallen by more than 4%. In the US stock market, Asmack's stock price once plummeted by more than 11% during night trading, but now the decline has narrowed to 5%. Nvidia was also dragged down. During the night trading session of US stocks, the stock went from rising 0.8% to diving down nearly 1%.

Specifically, in the first quarter, Asmack's sales were 5.29 billion euros, down 22% year on year and 27% month on month, compared with the average sales expected by analysts at 5.39 billion euros; net profit was 1,224 billion euros, down 40% month on month, and the market forecast was 1.07 billion euros. Asmack expects second-quarter sales of 5.7 billion to 6.2 billion euros, lower than market expectations of 6.46 billion euros.

According to financial reports, Asmack sold 66 units of new lithography systems and 4 used lithography systems in the first quarter. Compared with 113 units and 11 units in the previous quarter, they decreased by 41.59% and 63.64%, respectively. Earlier this year, Asmack acknowledged that some mainstream lithography machine deliveries have encountered problems, and shipments to China are expected to be affected by 10% to 15%.

On April 17, when talking about product orders, Asmack's chief financial officer Roger Dassen said, “I believe everyone has discovered that the new order situation is generally not stable. On Investor Day 2022, we forecast net sales of €30 billion to €40 billion in 2025. The median value for achieving this target, or 35 billion euros, given the current undelivered order situation, we can reach the median net sales target in early 2025 if we receive more than 4 billion euros of new orders each quarter over the next three quarters.” Roger Dassen said it will see a recovery in the industry in 2024 and the company is preparing for a stronger year in 2025.

Peter Wennink, CEO of Asmack, said in a statement that the outlook for the full year of this year remains unchanged, and the situation in the second half of the year is expected to be better than in the first half of the year. This is in line with the pace of the industry's continued recovery from the slump. Peter Wennink pointed out that 2024 is expected to be a transition year and will continue to invest in production capacity and new technology to prepare ahead of time for changes in the industry cycle.

It wants to “run away from home”

According to public information, Asmack, headquartered in the Netherlands, is the world's largest manufacturer of lithographers, accounting for up to 80% of the high-end lithography machine market share. All of the EUV lithography equipment required by global chip manufacturers to manufacture chips for the most advanced process comes from Asmack. Demand for consumer electronics products such as smartphones and laptops weakened last year, leading to poor performance of chip makers that produce semiconductors. This eventually spread to Asmack, where demand for the company's devices declined markedly.

Currently, Asmat has almost monopolized the global market share of lithography machines and holds the lifeblood of manufacturing advanced chips. Recently, Asmack's plan to move its headquarters out of the Netherlands attracted global attention.

In March of this year, it was reported in the media that Asmäck had proposed an intention to the Dutch government to expand or relocate to other places, of which France was one of the options. According to reports, the increasingly poor business environment in the Netherlands is the main reason. On the one hand, due to long-term industrial hollowing out, the Netherlands, like many developed Western countries, continues to decline in infrastructure construction capacity and maintenance levels. Highways, housing, and power grids in the Eindhoven region are in a state of disrepair for a long time, increasing the cost of business operations.

Meanwhile, the Dutch political environment continues to be volatile. Although the Netherlands has one of the strictest immigration policies in Europe, the number of immigrants has increased dramatically in recent years, leading to the rise of populist and conservative ideology. In the 2023 general election, the Dutch far-right Liberal Party won a big victory. The party's leader, Wilders, known as “Dutch Trump,” publicly announced that if he were in power, one important policy would be to curb immigrants. Measures include abolishing corporate tax relief for skilled immigrants.

The news that Asmer intended to “flee” to other countries made the Dutch government nervous. In order to preserve Asmäck's continued development in the Netherlands, the Dutch government has set up a special task force codenamed the “Beethoven Plan” to be responsible for this work. The working group is personally responsible for the task.

Recently, the Dutch government announced that in order to ensure that Asmack does not move its business to other countries, the Dutch government will spend 2.5 billion euros (approximately RMB 19.5 billion) to retain Asmack.

According to the plan, the funds will be used to improve infrastructure such as housing, education, transportation, and power grids in Eindhoven, where Asmäck's headquarters is located, in the next few years. In addition to this, the Dutch government said in a statement that they will also take action to reduce the tax burden on businesses.

Asmack welcomed the Dutch government's plan. However, in an email, Asma responded that the decision they need to make is not whether to stay, but where they will develop.

Asmack was born in 1984 in the Dutch town of Eindhoven, and has been in business for 40 years. Currently, Asmat has 42,000 employees worldwide, and more than half of them work in the Netherlands. In 2023, Asmack's net sales reached 27.6 billion euros, up 23.2% year on year, gross margin was 51.3%, up 0.8 percentage points year on year; net profit was 7.8 billion euros, up 28.3% year on year. The total number of undelivered orders reached €39 billion. Asmat's record orders were mainly due to strong demand in the Chinese market.

Editor/Jeffrey