ASML's order backlog at the end of the second quarter increased by over 24% YoY and approximately 54% QoQ. Multiple A-share equipment manufacturers achieved a record high in net income for Q2. Analysts predicted that due to domestic semiconductor wafer fabs expanding, semiconductor equipment demand is expected to grow by over 20% in 2024.
Under the warm current of the industry, semiconductor equipment demand has begun to revive.
Global lithography leader ASML (阿斯麦) released its Q2 financial report today:
In Q2, the company's sales reached 6.24 billion euros, a QoQ growth of 18% but a YoY decline of 9.57%, slightly higher than the expected 6.03 billion euros.
Net income was 1.58 billion euros, higher than the expected 1.43 billion euros.
Gross margin was 51.5%.
The order backlog amounted to 5.567 billion euros (including 2.5 billion euros for EUV equipment), a YoY increase of over 24% and a QoQ increase of approximately 54%, exceeding analysts' expectations.
China accounted for about half of ASML's Q2 sales, the same as the previous quarter.
"The overall inventory level of the semiconductor industry is continuing to improve," said Farooq, ASML's President and CEO, "although the macro environment remains uncertain, we expect the semiconductor industry to continue to recover in the second half of the year, entering an upcycle by 2025. We need to prepare for the large number of new wafer fabs being built around the world right now." Farooq called 2024 a "transitional year" and stated that the company will further invest in expanding production capacity and improving technology. "We see strong development in AI, which is driving the recovery and growth of most industries." Ben Barringer, an analyst at Quilter Cheviot, believes that the share of revenue generated by AI is "relatively small" in ASML's revenues, but it will grow significantly in the coming period.
Farooq called 2024 a "transitional year" and stated that the company will further invest in expanding production capacity and improving technology. "We see strong development in AI, which is driving the recovery and growth of most industries." Ben Barringer, an analyst at Quilter Cheviot, believes that the share of revenue generated by AI is "relatively small" in ASML's revenues, but it will grow significantly in the coming period.
However, it should be noted that ASML predicts sales of 6.7-7.3 billion euros and a gross margin of 50-51% in Q3 of 2024. As Q3 outlook was lower than expected, ASML's stock plummeted in the European market and fell more than 4.7% at the time of publication.
As for A-shares, four semiconductor equipment companies have already released half-year report forecasts, with the highest growth rate even exceeding 1000%, and both Changchuan Technology and Naura Technology Group achieved a record high in net income for Q2.
The performance data of suppliers both at home and abroad confirms the high demand in the industry. SEMI's latest Mid-Year Semiconductor Equipment Forecast Report also stated that the total global semiconductor equipment sales in 2024 are expected to reach a historical high of 109 billion US dollars, and are expected to further increase to 128 billion US dollars by 2025.
Mainland China is the world's largest semiconductor market, with a share of about 29.5% according to SIA. Data from semiconductor research institute Knometa Research shows that as of the end of 2023, mainland China accounted for approximately 19% of global wafer production, of which domestic enterprises accounted for only 11%, and the remaining capacity was built by foreign-funded companies in mainland China. Furthermore, domestic manufacturing enterprises mainly have mature technology, and the proportion of advanced technology is even smaller.
Against this backdrop, CITIC Securities' report on July 11 pointed out that there is a huge capacity gap in the domestic semiconductor industry, and it is expected to continue expanding in the long-term. Short-term advanced customer orders will bring more incremental demand. According to expectations for domestic semiconductor wafer fabs expansion, semiconductor equipment demand is expected to grow by over 20% in 2024. However, according to statistics from China International Bidding Network, the overall domestic semiconductor equipment production rate in 2023 is only about 20%. The localization rate of semiconductor equipment is expected to improve rapidly. The high-speed growth of domestic semiconductor equipment orders in recent years is expected to continue.