ASML reported a dip in profits for the 3rd quarter, yet nonetheless exceeded expectations; they predicted that 2024 revenue will remain constant. The Dutch entity is a pivotal player in the semiconductor industry, since their machines are integral for producing the most advanced chips worldwide. The company has been wrapped up in the technology-related disagreements between the United States and China because of the significance of its equipment.
ASML reported a year-on-year increase in profit during the third quarter that exceeded analyst expectations, but predicted flat revenue for 2024. The Netherlands-based firm is among the most important suppliers of chip-making equipment in the world, manufacturing extreme ultraviolet lithography machines which are used to create the most advanced microchips. These news, however, did not raise investors' hopes as ASML shares dropped by almost 4% shortly after 8 a.m. London time, as rising geopolitical tensions cancelled out the increase in profits. Here is a brief summary of what the figures disclosed: revenue for the third quarter was 6.67 billion euros (7.1 billion dollars), 1.89 billion euros profit - figures which, despite exceeding expectations, presented a decline in comparison to the second quarter. Year-on-year, though, net sales rose 15.5% (from 5.78 billion euros) and net profit 11% (from 1.7 billion euros).
Peter Wennink, CEO of ASML, noted in a Wednesday statement that the semiconductor industry is presently going through a barren patch, and their customers anticipate the turnaround to occur by the end of this year. To that end, Wennink proclaimed that the company is taking a more conservative view of 2024, predicting revenue figures akin to those of 2023, but they are also looking forward to significant growth in 2025. The global chip market has been struggling due to inadequate demand for products like laptops and mobile phones, which incorporate semiconductors, prompting TSMC and Samsung - two of ASML's foremost customers - to reduce expenditure in 2020. Nonetheless, ASML has reconfirmed their guidance for a 30% surge in net sales for 2023.
ASML, a Dutch company, has been embroiled in the ongoing tech tensions between the U.S. and China due to its products' significance. Last June, the Netherlands, where ASML is based, enacted its own export regulations on hardware for semiconductors, with companies now in need of a government license to export particular technologies. This happened right after the U.S. implemented vast export prohibitions to China, and requested that allies do the same. ASML declared that these measures would not probably affect its economic performance in 2023. On Tuesday, the U.S. Department of Commerce issued extra regulations to avoid the sale of AI chips to China, saying they are meant to seal previous year's limitations' gaps.
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