ASML: ‘Step the accelerator more deeply’ | Financial

“We will have to step on the accelerator more deeply,” says CFO Roger Dassen in an explanation, given the high demand from the market for the chip machines. The company is therefore in talks with its hundreds of suppliers to see if it is possible to ramp up production by 2025 to 90 units of its EUV machines, which produce the most advanced chips, and 600 duv units, which are good for the more coarse semiconductors. “We still see that the demand for our systems exceeds our current production capacity,” explains CEO Peter Wennink of the new expansion plans.

In plans that ASML unveiled last September, the target for 2025 was still 375 duv and 70 euv machines, about 1.5 times as many as in 2021. This year, ASML expects to deliver 55 euv devices.

Results first quarter

For the quarter, ASML performed within the estimate it announced in its annual results in January, with revenue at €3.5 billion, as projected, well below the €5 billion in the last three months of last year and €3.5 billion in revenue. 4.4 billion from a year ago. The profit amounted to €695 million.

The decrease was related to a different way of working that means that it takes a little longer before a delivered device is recorded as revenue. Actual production had increased. At the same time, ASML secured €7 billion in new orders and is sticking to its previously issued 20% growth forecast for the full year.

Among the new orders were three for machines of the next generation technology, which ASMl calls ‘High-NA euv’. The new machines cost more than €300 million each.

New strategy update

ASML’s gross margin came in at 49% as forecast, although the company has faced an increase in costs due to more expensive personnel and components, as well as higher transport costs, which are affected by the closure of Ukraine’s airspace. China accounted for more than a third of the turnover. This is entirely at the expense of duv machines, since euv technology may not be exported to China.

To what extent the new ambitions are actually achievable, Dassen said he cannot yet say with certainty. The company wants to come up with definitive plans this fall, including a new revenue forecast for 2025. In the plan, which was unveiled in September, revenue would grow to €24 to 30 billion over three years, where it will be €18.6 billion in 2021. amounted to.

Additional factories

For the additional expansion of production, ASML will also have to build more new dust-free areas. Where that will happen has yet to be decided. ASML’s machines are still all built on the ASML campus in Veldhoven, but last year CEO Peter Wennink hinted that new expansion may take place elsewhere.

Investors reacted positively to the figures and expansion plans when the stock market opened on Wednesday. After a hesitant start, the share was more than 7.5% higher early in the afternoon on an almost 2% rise in the AEX index.

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