ASML predicts a 25% increase in revenue in 2023 as the chip industry recovers

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The Dutch company ASML manufactures one of the most important machines needed to manufacture the world’s most advanced chips. US chipmakers have challenged companies, including ASML, to try to figure out what the rules actually mean.

Emmanuel Doonan | AFP | Getty Images

Dutch chip equipment manufacturer ASML Anticipate a jump in revenue in 2023 as the semiconductor industry anticipates further acceleration in growth in the second half of this year.

ASML is one of the world’s largest companies in the chip supply chain. It manufactures the machines needed to manufacture the world’s most advanced chips.

ASML’s net sales rose more than 29% to 6.4 billion euros ($7 billion) in the fourth quarter of 2022, it said on Wednesday. Full-year sales totaled 21.1 billion euros, up more than 13% year-on-year. However, net income for the full year actually fell by 4% to 5.6 billion euros.

ASML expects net sales for 2023 to increase by more than 25% compared to 2022.

“Looking at the state of the industry today, we’re worried about a recession, high inflation or high interest rates, that’s for sure. Then we’ll see the impact on our customers’ businesses,” ASML CEO Peter Wennink told CNBC.

companies such as buy ASML machines Intel and TSMC, which actually make the chips that go into end products like laptops or smartphones. Wennink said there has been an increase in chip inventory related to consumer products because demand for these electronic devices is “not very good.”

But he said ASML’s customers thought it would be “short-term” and were therefore not canceling orders.

“Most of our customers are telling us they expect recovery in the second half of this year,” Wennink said.

“If you take into account that the average delivery time of our tools is … say one and a half to two years, and you consider the relatively short expectations of a possible downturn, then of course customers will not cancel any orders. If this happens again, they may end up at the end of the queue.”

Companies like TSMC and Intel have ramped up their capabilities globally, with the United States and Europe in particular looking to bring chip manufacturing closer to home. For example, TSMC plans to open two semiconductor plants in Arizona.

ASML is caught at a geopolitical crossroads

The United States has imposed extensive export restrictions aimed at isolating China from key chip and semiconductor manufacturing equipment. As a result, ASML ordered its US employees to stop serving Chinese customers.

This month, Dutch Prime Minister Mark Rutte traveled to Washington to meet with US President Joe Biden. At this point, it is unclear whether the United States is seeking a total ban on ASML shipments to China.

Rutte told CNBC last week on the sidelines of the World Economic Forum in Davos, Switzerland that he hoped the issue would be resolved “in a few months, maybe sooner.”

“I think we can get there peacefully, including with countries that don’t want to use high technology and defense systems,” Rutte told CNBC.

Currently, ASML can ship older tools called deep ultraviolet (DUV) lithography machines to China, but not its EUV systems. ASML CEO Wennink said China will account for around 15% of sales in 2022 and will reach a “similar” amount this year.

Ultimately, he said, it was up to governments to resolve the situation.

“It’s not just between the Dutch and the Americans, it involves other European countries, it involves Asian countries, so it’s a complicated situation,” Wennink said.

“It’s up to them [governments]. I just have to follow what comes out.”

CNBC’s Silvia Amaro contributed to this report.

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