ASML Reports Weaker Than Expected First-Quarter Bookings, China Sales Hold Up

ASML, the largest supplier of equipment to computer chip makers, reported weaker than expected first-quarter new bookings on Wednesday, causing shares in Europe’s biggest tech firm to drop 4.5% to 873.40 euros at 0741 GMT. Despite this setback, sales to China remained strong, defying U.S.-led restrictions.

The Dutch group is experiencing a temporary slowdown in demand for its most advanced machines but is anticipating robust growth in 2025 due to the increasing demand for AI and memory chips. ASML is set to benefit from new chip plants planned with government support in various countries.

Although first-quarter new bookings were below analysts’ expectations at 3.6 billion euros, ASML remains optimistic about the future. Sales to customers in China accounted for a record 49% of total sales in the first quarter, highlighting the company’s strong presence in the region.

The U.S. government’s restrictions on exports of advanced chipmaking equipment to China have led Chinese chipmakers to seek older ASML equipment that is not subject to these restrictions. This trend, combined with the overall growth in chipmaking capacity in China, Taiwan, and South Korea, bodes well for ASML’s future prospects.

Despite the weaker bookings, outgoing CEO Wennink expressed confidence in a stronger second half of the year and described 2024 as a “transition year.” Investors like Han Dieperink from Aureus remain optimistic about ASML’s long-term growth outlook, citing the company’s position as a key player in the AI and memory chip markets.

ASML’s first-quarter net income was 1.22 billion euros, with sales totaling 5.29 billion euros. The company’s financial forecasts for 2024 remain unchanged, with sales expected to be flat compared to 2023.

With a new CEO set to take over at the upcoming annual meeting, ASML is poised to navigate the challenges of the industry and capitalize on the growing demand for advanced chip technology.