ASML shares drop most since 1998 after sales forecast
Leading supplier of equipment used to manufacture chips warns of worse than expected sales in 2025
15 October 2024 - 21:25
byToby Sterling
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ASML's headquarters in Veldhoven, the Netherlands. Picture: Reuters/Piroschka van de Wouw
Amsterdam — Computer chip equipment maker ASML on Tuesday forecast lower than expected 2025 sales and bookings on sustained weakness in parts of the semiconductor market, pushing its shares to their biggest one-day drop since 1998.
The company said that despite a boom in AI-related chips, other parts of the semiconductor market have been weaker for longer than expected, leading companies that make logic chips to delay orders, and customers that make memory chips to plan only “limited” new capacity additions.
ASML, Europe’s biggest tech firm, is the leading supplier of equipment used to manufacture chips. Its customers include AI chipmaker TSMC of Taiwan, logic chip makers Intel and Samsung, and memory chip specialists Micron and SK Hynix.
The company published its quarterly earnings on its website a day earlier than expected in what a spokesperson described as a “technical error”.
“We expect our 2025 total net sales to grow to between €30bn-€35bn, which is the lower half of the range” previously forecast, CEO Christophe Fouquet said in a statement.
The chip market’s weakness “is expected to continue in 2025, which is leading to customer cautiousness”, he added.
Trading in the shares was halted several times before they closed 16% lower at €668.10.
Still, the company reported a profit of €2.1bn on sales of €7.5bn, slightly ahead of analyst estimates. However, orders placed amounted to €2.6bn, well below forecasts of between €4bn and €6bn.
Lower expetations
ASML’s shares slumped over the summer months after Intel said it would cut its capital spending and weakness in memory chip prices.
Still, ASML’s change in outlook was a negative surprise for analysts.
“As recently as early September, management had reiterated that the low end of the 2025 range was still ‘conservative’,” Citi said in a note.
“We look for additional detail as to the more recent changes in demand that are affecting ASML’s reduced expectation for 2025 and what it means for customer plans for 2026.”
Analyst Michael Roeg of bank Degroof Petercam said he expected ASML’s warning to drag down the wider sector, but noted the company’s sales were still expected to rise in 2025 from 2024.
“There is still no downturn in [demand for equipment] despite sluggish end markets for chips,” he said.
ASML’s sales to China set a record at €2.79bn or 47% of its total, in the quarter. ASML dominates the market for lithography equipment, which uses lasers to help create the circuitry of chips.
ASML can’t sell its most advanced product range in China due to US-led restrictions, but Chinese chipmakers have been investing heavily in its equipment to make older generations of computer chips.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
ASML shares drop most since 1998 after sales forecast
Leading supplier of equipment used to manufacture chips warns of worse than expected sales in 2025
Amsterdam — Computer chip equipment maker ASML on Tuesday forecast lower than expected 2025 sales and bookings on sustained weakness in parts of the semiconductor market, pushing its shares to their biggest one-day drop since 1998.
The company said that despite a boom in AI-related chips, other parts of the semiconductor market have been weaker for longer than expected, leading companies that make logic chips to delay orders, and customers that make memory chips to plan only “limited” new capacity additions.
ASML, Europe’s biggest tech firm, is the leading supplier of equipment used to manufacture chips. Its customers include AI chipmaker TSMC of Taiwan, logic chip makers Intel and Samsung, and memory chip specialists Micron and SK Hynix.
The company published its quarterly earnings on its website a day earlier than expected in what a spokesperson described as a “technical error”.
“We expect our 2025 total net sales to grow to between €30bn-€35bn, which is the lower half of the range” previously forecast, CEO Christophe Fouquet said in a statement.
The chip market’s weakness “is expected to continue in 2025, which is leading to customer cautiousness”, he added.
Trading in the shares was halted several times before they closed 16% lower at €668.10.
Still, the company reported a profit of €2.1bn on sales of €7.5bn, slightly ahead of analyst estimates. However, orders placed amounted to €2.6bn, well below forecasts of between €4bn and €6bn.
Lower expetations
ASML’s shares slumped over the summer months after Intel said it would cut its capital spending and weakness in memory chip prices.
Still, ASML’s change in outlook was a negative surprise for analysts.
“As recently as early September, management had reiterated that the low end of the 2025 range was still ‘conservative’,” Citi said in a note.
“We look for additional detail as to the more recent changes in demand that are affecting ASML’s reduced expectation for 2025 and what it means for customer plans for 2026.”
Analyst Michael Roeg of bank Degroof Petercam said he expected ASML’s warning to drag down the wider sector, but noted the company’s sales were still expected to rise in 2025 from 2024.
“There is still no downturn in [demand for equipment] despite sluggish end markets for chips,” he said.
ASML’s sales to China set a record at €2.79bn or 47% of its total, in the quarter. ASML dominates the market for lithography equipment, which uses lasers to help create the circuitry of chips.
ASML can’t sell its most advanced product range in China due to US-led restrictions, but Chinese chipmakers have been investing heavily in its equipment to make older generations of computer chips.
Reuters
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