ASML Holding NV’s order intake plunged in the third quarter amid a sector-wide slump in the semiconductor industry, leaving the company increasingly reliant on revenue from China.
Order bookings fell 42 percent to 2.6 billion euros (US$2.8 billion) in the July-to-September period from the previous quarter, Europe’s most valuable technology company said in a statement yesterday.
That compared with an average estimate of 4.5 billion euros among analysts polled by Bloomberg.
Photo: Reuters
While ASML maintains a sizeable order backlog, the semiconductor industry has been experiencing a slowdown after inflation and recession fears hit consumer spending.
Slumping demand elsewhere made China ASML’s biggest market last quarter, overtaking Taiwan.
ASML, which is the only producer of the lithography equipment needed to make the most advanced semiconductors, has experienced a jump in business from China this year as chipmakers there boosted orders ahead of looming export controls.
“All in all, on the macro front it’s quite dynamic and quite challenging,” ASML chief financial officer Roger Dassen said in a video interview on the results. “If you then specifically look into the semiconductor industry, I think it’s plain to say that our customers are really going through the cycle trough.”
China accounted for 46 percent of ASML’s sales in the third quarter, compared with 24 percent in the previous quarter and 8 percent in the January-to-March period.
Taiwan was 24 percent, down from 34 percent in the second quarter.
ASML has been targeted by the US effort to curb exports of cutting-edge technology to China.
Earlier this year, US President Joe Biden’s administration convinced the Dutch government to prevent ASML from shipping some immersion deep ultraviolet lithography machines, its second-most advanced product line, to China without a license.
The Dutch restrictions are set to take full effect from Jan. 1.
The US on Tuesday announced additional export curbs that are designed to block China’s access to advanced semiconductor technology.
ASML said the new measures would affect its sales there in the medium to long term.
ASML is already barred from selling its most advanced equipment, known as extreme ultraviolet machines, to China.
The firm has said that it does not expect the Dutch and US measures to have a material impact on its financial outlook for the year or in the longer term.
ASML’s revenue next year is expected to be similar to this year, Dassen said.
“On the other hand, we believe 2024 is going to be a pivotal year in preparing us for what we think will be very significant growth in 2025,” he said.
Revenue is on track for 6.7 billion euros to 7.1 billion euros in the fourth quarter, compared with net sales of 6.7 billion euros in the previous period, the company said.
The forecast compares with analysts’ average estimate of 6.91 billion euros, a Bloomberg survey showed.
“We continue to see the industry as being in the early stages of a new upcycle, with industry fundamentals and ASML’s orders expected to steadily improve,” Jefferies analyst Janardan Menon said in an e-mailed note.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the