The artificial intelligence boom is boosting demand for chip manufacturing equipment, with lithography machine giant$ASML Holding (ASML.US)$Second quarter orders far exceeded expectations, maintaining the outlook for fiscal year 2024.
On Wednesday, July 17th, ASML announced its second quarter performance, with profits and sales exceeding expectations. The report showed that ASML's net sales in the second quarter were 6.24 billion euros, higher than the expected 6.03 billion euros. ASML previously forecast the net sales for the second quarter to be between 5.7 billion euros and 6.2 billion euros.
Net income was 1.58 billion euros, higher than the expected 1.43 billion euros, a year-on-year decrease of 18.7%, but a narrowing compared to the previous quarter.
Specifically:
Second quarter total orders increased to 5.57 billion euros, a year-on-year increase of over 24%, higher than analysts' expected 4.41 billion euros, of which 2.5 billion euros came from extreme ultraviolet (EUV) systems. The company said that strong performance from some of its largest customers helped support demand for its equipment.
The gross margin for the second quarter was 51.5%, higher than the expected 50.6% and higher than the first quarter's 51%.
It is worth noting that this financial report is the first report after the new CEO, Fouquet, took office at ASML. Fouquet took over from Peter Wennink in April and said in a statement:
"We are currently seeing strong development of artificial intelligence, which is driving the recovery and growth of most industries and leading other submarkets."
Previously, ASML referred to 2024 as a "transition" year, and expected the semiconductor industry to start recovering after a difficult 2023. Last week, Taiwan Semiconductor released its financial report, with second quarter sales growth faster than any time since 2022.
ASML's outlook for the full year remains unchanged, with total net sales for 2024 expected to be similar to 2023, mainly due to strong market performance in the second half of the year.
ASML's guidance for the third quarter is as follows:
Third quarter net sales are expected to be between 6.7 billion euros and 7.3 billion euros, lower than the market's expected 7.46 billion euros.
Third quarter gross margin is expected to be between 50% and 51%, lower than the market's expected 51.1%.
AI drives EUV lithography machine orders
ASML believes that the development of AI is the main driving force behind the recovery and growth of the industry.
In ASML's new orders, EUV system orders are an important part, and in the second quarter ASML also made significant updates to EUV technology. With the support of its customers, ASML said that shipments in the second half of the year are expected to continue to increase.
Currently, ASML is enhancing its deep cooperation with customers and using EUV technology to assist in the manufacture of AI-related chips.
ASML said that the long-term growth drivers of the semiconductor terminal market are still very intact, and energy transformation, electrification, and AI will continue to drive demand. The increase in lithography technology at future technology nodes will also drive demand for advanced nodes and mature nodes.
The demand in the Chinese market is still robust.
In the second quarter, China remained a key "consumer player" of ASML's business, accounting for 49% of sales, which is the same as the previous quarter.
With the comprehensive rise of semiconductor stocks this year, ASML's stock price also rose by 44%. Today, ASML's pre-market trading fell by nearly 7%.
Editor/ping