A brand on the outside of the ASML Holding NV headquarters in Veldhoven, Netherlands, on Wednesday, Jan. 24, 2024.
Peter Boer | Bloomberg | Getty Pictures
Dutch semiconductor large ASML on Wednesday reported an enormous leap in fourth-quarter web bookings, suggesting robust demand for its superior chipmaking instruments whilst DeepSeek’s low-cost mannequin raises issues over AI spending.
ASML shares surged as a lot as 11% throughout morning offers, however later pared good points barely. As of 12:15 p.m. London time, inventory was up 7.4%.
This is how ASML did versus LSEG consensus estimates for the fourth quarter:
- Web gross sales: 9.26 billion euros ($9.64 billion) versus 9.07 billion euros anticipated.
- Web revenue: 2.69 billion euros versus 2.64 billion euros anticipated.
ASML mentioned that web bookings, a key indicator of order demand, got here in at 7.09 billion euros. That was up 169% from the two.63 billion euros ASML reported within the third quarter, and exceeded the three.99 billion euros anticipated by analysts polled by Seen Alpha, in response to Reuters.
The semiconductor tools maker additionally mentioned that its 2025 full-year gross sales outlook stays unchanged from its earlier steerage of between 30 billion and 35 billion euros of complete income.
ASML had an order backlog of roughly 36 billion euros on the finish of 2024, CFO Roger Dassen mentioned in a transcript of a video interview.
Defying DeepSeek issues
ASML suffered losses throughout a worldwide tech sell-off earlier within the week after the rollout of Chinese language startup DeepSeek’s R1 reasoning mannequin, which claims to undercut OpenAI on each price and efficiency.
The transfer triggered questions over eyewatering spending from the likes of main AI gamers OpenAI and Microsoft on Nvidia graphics processing items, that are wanted to coach and run probably the most superior AI fashions.
This might hit demand for ASML’s high-precision excessive ultraviolet (EUV) machines, that are used to print probably the most superior microchips. EUV instruments accounted for 3 billion euros of ASML’s fourth-quarter web bookings.
ASML CEO Christophe Fouquet struck a optimistic notice on the arrival of low-cost AI fashions akin to DeepSeek, telling CNBC’s Arjun Kharpal that he expects this improvement to drive extra demand for semiconductors — not much less.
Whereas he declined to touch upon specifics with DeepSeek’s R1, Fouquet mentioned that he sees no signal of a slowdown in demand for AI-focused chips.
“A decrease price of AI may imply extra purposes. Extra purposes means extra demand over time. We see that as a possibility for extra chips demand,” Fouquet mentioned in an interview Wednesday.
There may be “numerous dialogue” within the business surrounding DeepSeek, however Fouquet mentioned ASML hasn’t heard from clients asking concerning the impression of the Chinese language agency’s mannequin on chip demand.
Ben Barringer, expertise analyst at Quilter Cheviot, mentioned that the earnings report provided “reassurance to the market following the turmoil as a result of issues round DeepSeek.”
Michael Discipline, chief fairness strategist at Morningstar, informed CNBC’s “Squawk Field Europe” that ASML’s fourth-quarter outcomes vindicate the view that the chip agency is not “overvalued” or “filled with puff.” ASML is Morningstar’s high AI choose in Europe, he added.
“Genuinely, we expect the numbers assist the [investment] case and, really, we expect the shares are price extra like 850 (euros) — which, given the pullback you’ve got seen in the previous couple of weeks, presents a reasonably good alternative for traders,” Discipline mentioned Wednesday.
ASML shares closed at 646.60 euros per share Tuesday.
Slowdown in China demand
Fouquet added that ASML’s anticipating a rebalancing of demand in China in 2025. Over the previous two years, ASML noticed heightened demand for its chipmaking instruments within the nation as Chinese language corporations stocked as much as get forward of U.S. restrictions on exports of superior semiconductor machines.
“We had an enormous backlog in China, on the finish of 2022, as a result of 2022 was a 12 months we could not feed the market with all of the instruments the market wanted. This has type of been absorbed final 12 months,” Fouquet informed CNBC.
He added that ASML expects to return to a extra “regular” demand ratio in China, in contrast with different markets this 12 months.
“We count on the ratio of our enterprise in China to be decrease than what it has been for positive in 23, 24,” Fouquet added.
