ASML foresees growth in 2023, while chipmakers expect pain • The Register

Dutch producer of chipmaking gear ASML beat monetary analysts’ estimates for This fall of 2022, and expects continued momentum for the yr forward, regardless of the probability of additional export restrictions rising.
ASML mentioned that for the previous quarter it booked internet gross sales of €6.43 billion ($6.98 billion), up from €4.98 billion a yr earlier, and internet revenue of €1.82 billion ($1.97 billion) versus €1.77 billion.
As the only world provider of utmost ultraviolet lithography (EUV) machines for chipmaking, €3.4 billion ($3.69 billion) of ASML’s bookings for the interval have been accounted for by this expertise.

For the complete yr 2022, the corporate reported internet gross sales of €21.2 billion ($23.03 billion), up from €18.6 billion ($20.2 billion) in 2021, though its internet revenue for the yr of €5.6 billion ($6.08 billion) was down from the €5.9 billion ($6.4 billion) of 2021.

The latter is probably going as a consequence of quick shipments, the place ASML has skipped among the manufacturing unit checks of its photolithography machines with the intention to get the gear delivered as quickly as doable, however the firm has needed to defer recording the income from that sale till the machine is totally inspected and formally accepted on the buyer website.
The worth of such quick shipments resulting in income recognition being delayed from 2022 into 2023 is round €3.1 billion ($3.4 billion), the corporate claimed.

ASML president and CEO Peter Wennink mentioned in an announcement that 2022 was one other optimistic yr for commerce, with This fall internet gross sales coming in across the midpoint of the corporate’s personal steering.
He additionally mentioned ASML anticipated to see continued sturdy development throughout 2023, with a internet gross sales enhance of greater than 25 p.c projected.
“We proceed to see uncertainty out there attributable to inflation, rising rates of interest, danger of recession and geopolitical developments associated to export controls,” Wennink cautioned.

“Nevertheless, our clients point out that they count on the market to rebound within the second half of the yr. Contemplating our order lead instances and the strategic nature of lithography investments, demand for our techniques subsequently stays sturdy.”
Stress from the US
However the Netherlands is dealing with continued stress from the US to step up its export ban to China overlaying superior expertise similar to chips and chipmaking gear, and this might influence ASML’s future gross sales.
As The Register reported final week, President Biden raised the difficulty with Dutch Prime Minister Mark Rutte throughout a White Home assembly. The Netherlands has already blocked the sale of the EUV gear used for probably the most superior semiconductor manufacturing nodes to China, however the US needs the nation to broaden the ban to incorporate extra gear.
Dutch commerce minister Liesje Schreinemacher has thus far indicated the nation is not going to essentially help any such extension.
“I do know there’s numerous stress internationally however I will likely be preventing for open commerce and towards protectionism,” she reportedly advised a panel on the World Financial Discussion board in Davos final week.
In the meantime, chipmakers are feeling the pinch, with Texas Devices recording its first gross sales decline since 2020. The corporate reported income of $4.7 billion for This fall 2022, a lower of 11 p.c on the earlier quarter and three p.c from the identical quarter a yr in the past.

The outcomes replicate weaker demand in all finish markets aside from automotive, based on TI Head of Investor Relations Dave Pahl, who mentioned a part of this weaker demand was clients working to cut back their inventories.
A report from analysts at Jefferies Group mentioned that softness in US industrial manufacturing in December might level to weaker industrial chip demand, however added that the top of semiconductor shortages was serving to gear distributors like ASML.
The report says November knowledge signifies that world semiconductor revenues fell 9.2 p.c year-on-year, representing the fourth consecutive month of detrimental development.
On the again of this, Jefferies mentioned it has revised its forecasts to foretell the downturn will backside out at 26 p.c down by July of this yr. This interprets to a full-year outlook of a 20 p.c fall in income for the semiconductor business, it mentioned. ®