Dutch tech giant ASML Holding NV, which supplies chipmaking machines to the semiconductor industry, yesterday reported a rise in annual net profit despite a high-tech trade spat between China and the West.
Net profits came in at 7.8 billion euros (US$8.5 billion) for last year, compared with 5.6 billion euros the previous year, the firm said.
“The semiconductor industry continues to work through the bottom of the cycle,” ASML Holding NV CEO Peter Wennink said in a statement.
Photo: Reuters
“Although our customers are still not certain about the shape of the semiconductor market recovery this year, there are some positive signs,” he added.
ASML is one of the world’s leading manufacturers of equipment to make state-of-the-art semiconductor chips, which power everything from mobile phones to cars.
However, the semiconductor industry has become a geopolitical battleground, as the West seeks to restrict China’s access over fears the chips could be used for advanced weaponry.
ASML earlier this month said that it had been blocked from exporting “a small number” of its advanced machines to China, amid reports of US pressure on Amsterdam.
At the time, Beijing lashed out at what it called “bullying behavior” by Washington, adding that it “seriously violates international trade rules.”
There are also concerns Beijing might introduce its own export controls on gallium and germanium — two rare earth metals critical for semiconductors.
ASML has shrugged off the financial impact of the geopolitical headwinds, with top officials saying the firm is well placed to weather the storm.
The company said it expects flat sales this year, which it has called a “transition year,” before registering “significant growth” next year.
Overall net sales last year came in at 27.6 billion euros, up from 21.1 billion euros in 2022.
The numbers for last quarter were also slightly better than the firm had expected, with profits of 2 billion euros on sales of 7.2 billion euros.
ASML said its pipeline was also robust, with net bookings nearly tripling to 9.2 billion euros in the fourth quarter compared with 2.6 billion euros in the previous quarter.
“Our strong order intake in the fourth quarter clearly supports future demand,” Wennink said.
However, net bookings were down for the year as a whole, at 20 billion euros compared with 30.6 billion euros in 2022.
The firm said sales in this quarter are expected to slow compared with the pace set in last quarter, with a forecast of 5 billion euros to 5.5 billion euros.
“In spite of the positive signs as described above, we maintain our conservative view for the total year and expect 2024 revenue to be similar to 2023,” Wennink said. “We also expect 2024 to be an important year to prepare for significant growth that we expect for 2025.”
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