ASML Shares Drop as Sales Miss Forecasts

Shares of critical chipmaking equipment supplier ASML dipped 4.5% on Wednesday after the company's first-quarter sales fell short of expectations. However, ASML maintained its full-year outlook, predicting a stronger second half of 2024.

Key Figures

• Net Sales: €5.29 billion, below the €5.39 billion anticipated.
• Net Profit:  €1.22 billion, exceeding the €1.07 billion forecast.
• Net Bookings:  €3.6 billion, reflecting both a year-on-year decrease and a significant drop from the previous quarter.

Industry Context

ASML is a vital player in the global semiconductor industry, supplying the advanced machines needed to create cutting-edge chips. Weakened demand for consumer electronics in 2023 impacted ASML's sales, but recent signs of recovery among chipmakers suggest a potential upturn.

ASML's Outlook

ASML remains confident in its full-year sales projection, aiming to match 2023 figures. CEO Peter Wennink describes 2024 as a "transition year," highlighting investments in capacity and technology to prepare for the next industry upcycle. Increased spending by major chipmakers like TSMC, Samsung, and Intel, fuels this optimism.

Points to Note

• ASML's equipment sales to China made up a significant 49% of its total in Q1, with the company yet to disclose any specific impacts from export restrictions.
• The Dutch tech leader has previously estimated a 10-15% reduction in China sales for the year due to those restrictions.