The global economic unrest caused by Trumps import duties can have major consequences for the growth of ASML. ASML expert René Raaijmakers predicts that, while the Veldhoven chip machine maker presented a billion-dollar turnover on Wednesday: “If Trump continues to disrupt things in this way, the flame will soon be in the pan.”
That unrest was not evident on Wednesday from the figures presented. ASML achieved a turnover of 7.7 billion euros in the first quarter, exactly as expected. The growth forecast for this year has not been adjusted. ASML assumes that this year it sells between 30 and 35 billion euros in machines.
Logical, says ASML expert Raaijmakers. He knows almost everything about ASML and wrote a book about the company. “ASML can look far ahead. Chip machines are ordered far ahead. But the big question is: what will happen next year?”
“A lot of those machines in China are now standing still.”
Raaijmakers is worried about the future and that is because of two headache files: the US and China. “The chip machine market in China is saturated. Due to the expected trade restrictions with that country a few years ago a lot of chip machines were ordered and delivered ahead. In the end, those restrictions for the delivery of new machines to China also came.”
“A lot of those machines in China are now standing still,” says Raaijmakers. “In addition, with his import duties, Trump provides so much uncertainty that companies dare to order almost nothing anymore.”
“If Trump remains so fickle, that ASML hurts enormously.”
Also ASML CEO Christophe Fouquet gives opposite the NOS that the uncertainty has increased due to the import duties. As a result, parts and machines that go to the US from the Netherlands can become considerably more expensive. Raaijmakers: “If Trump remains so fickle with the import duties, that ASML hurts enormously.”
The US President announced this weekend that the import duties of first twenty and later ten percent do not apply to the chip industry. Moments later he announced that he is working on separate measures for that industry.
According to Raaijmakers, ASML must mainly have the high expectations of artificial intelligence. “For that, super fast chips are needed that can be made with the latest machines from ASML. A lot of money has already been invested in by large companies in the US.”
And according to him there is precisely the danger. “Trump can ensure that those investments in AI (ed. Artificial intelligence). If he keeps going and the economy comes in a recession, then those companies can just invest less in AI data centers. That has a direct influence on ASML.”
“At some point that balloon is punctured.”
ASML still has plans to double in the Netherlands to 40,000 employees in the Netherlands after 2030. Half of those people have to work on the campus still to be built in Eindhoven. According to Raaijmakers, the current turbulence in the US can throw a spanner in the works. He foresees a ‘serious danger’: “A large part of the chip market is hardly growing. If the industry starts investing less in AI, then we will not see the growth that ASML predicts.”
But why are ASML’s expectations not being adjusted now? “Because everyone tries to propagate the positive message. Nobody wants to get Trump for the head. But at a certain point that balloon is punctured. That growth is no longer as sure as in the past.”