ASML Holding NV’s order intake plunged in the third quarter amid a sector-wide slump in the semiconductor industry, leaving the company increasingly reliant on revenue from China.
Order bookings fell 42 percent to 2.6 billion euros (US$2.8 billion) in the July-to-September period from the previous quarter, Europe’s most valuable technology company said in a statement yesterday.
That compared with an average estimate of 4.5 billion euros among analysts polled by Bloomberg.
Photo: Reuters
While ASML maintains a sizeable order backlog, the semiconductor industry has been experiencing a slowdown after inflation and recession fears hit consumer spending.
Slumping demand elsewhere made China ASML’s biggest market last quarter, overtaking Taiwan.
ASML, which is the only producer of the lithography equipment needed to make the most advanced semiconductors, has experienced a jump in business from China this year as chipmakers there boosted orders ahead of looming export controls.
“All in all, on the macro front it’s quite dynamic and quite challenging,” ASML chief financial officer Roger Dassen said in a video interview on the results. “If you then specifically look into the semiconductor industry, I think it’s plain to say that our customers are really going through the cycle trough.”
China accounted for 46 percent of ASML’s sales in the third quarter, compared with 24 percent in the previous quarter and 8 percent in the January-to-March period.
Taiwan was 24 percent, down from 34 percent in the second quarter.
ASML has been targeted by the US effort to curb exports of cutting-edge technology to China.
Earlier this year, US President Joe Biden’s administration convinced the Dutch government to prevent ASML from shipping some immersion deep ultraviolet lithography machines, its second-most advanced product line, to China without a license.
The Dutch restrictions are set to take full effect from Jan. 1.
The US on Tuesday announced additional export curbs that are designed to block China’s access to advanced semiconductor technology.
ASML said the new measures would affect its sales there in the medium to long term.
ASML is already barred from selling its most advanced equipment, known as extreme ultraviolet machines, to China.
The firm has said that it does not expect the Dutch and US measures to have a material impact on its financial outlook for the year or in the longer term.
ASML’s revenue next year is expected to be similar to this year, Dassen said.
“On the other hand, we believe 2024 is going to be a pivotal year in preparing us for what we think will be very significant growth in 2025,” he said.
Revenue is on track for 6.7 billion euros to 7.1 billion euros in the fourth quarter, compared with net sales of 6.7 billion euros in the previous period, the company said.
The forecast compares with analysts’ average estimate of 6.91 billion euros, a Bloomberg survey showed.
“We continue to see the industry as being in the early stages of a new upcycle, with industry fundamentals and ASML’s orders expected to steadily improve,” Jefferies analyst Janardan Menon said in an e-mailed note.
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