ASML Q3 2023 Earnings Report

The Dutch company ASML makes one of the most important pieces of machinery needed to produce the world’s most advanced chips. US chip restrictions have left companies, including ASML, struggling to figure out what the rules mean in practice.

Emmanuel Dunand | AFP | Getty Images

Chip equipment company ASML reported a year-over-year increase in third-quarter profit, beating analysts’ estimates, but forecast revenue would be flat in 2024.

ASML is one of the world’s preeminent semiconductor companies, producing tools known as extreme ultraviolet lithography machines that are required to produce the world’s most advanced chips.

ASML shares fell nearly 4% shortly after 8 a.m. London time as rising geopolitical concerns wiped out profit gains.

Here’s how ASML performed in the third quarter compared to LSEG’s estimates:

  • Net sales: 6.67 billion euros ($7.1 billion) versus expected 6.71 billion euros
  • Net profit: 1.89 billion euros versus 1.8 billion euros expected

Net sales increased by 15.5% compared to 5.78 billion euros in the same period last year. Net profit rose by around 11% compared to 1.7 billion euros in the same period last year.

Both third quarter numbers showed a decrease from second quarter results.

“The semiconductor industry is currently going through the bottom of the cycle and our customers expect the turning point to be visible by the end of this year,” ASML CEO Peter Wennink said in a statement Wednesday. “We therefore assume that 2024 will be a transition year.”

Wennink added that the company has a “more conservative view” of 2024 and expects revenue similar to 2023.

“But we also view 2024 as an important year to prepare for the significant growth we expect in 2025.”

The semiconductor market has had a difficult year as demand for products such as smartphones and laptops that use these components is weak. Companies like Taiwan’s TSMC and Samsung, two of the world’s largest chipmakers and customers of ASML, have cut capital spending this year.

ASML’s net bookings totaled €2.6 billion in the third quarter, down 42% quarter-on-quarter as customers reduced spending.

Nevertheless, ASML reiterated its forecast for a 30% year-over-year increase in net sales for 2023.

US chip restrictions in focus

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