The Deepseek panic that dominated the tech fairs earlier this week does not seem to have lasting consequences for the price of ASML: the share opened 11 percent higher on Wednesday. Investors springed up after the Veldhoven chip machine manufacturer announced their expectations and announced a record turnover in the last quarter, of 9.3 billion euros. That is almost three times as much as the quarter before.
On Wednesday morning, ASML presented its results from 2024. ASML achieved a turnover of 28.3 billion euros for the entire year – narrowly higher than that of 2023 and also higher than earlier estimates. The win was a bit lower; 7.5 instead of $ 7.8 billion. The company booked 7.1 billion euros in new orders.
ASML makes lithography systems, the complex machines that copy chip patterns on silicon disks at high speed. They form the central and most expensive tools in a chip factory.
From the advanced EUV machines, which cost up to 200 million euros each, ASML sold less in 2024 than in 2023. On the other hand, the updates to existing systems yielded a lot of money. There are more than five thousand ASML machines worldwide that regularly receive new hardware and software. In the fourth quarter alone, that ASML yielded 2.1 billion euros.
The most expensive systems, which can depict even finer lines, cost at 400 million euros each. ASML sold three of those so-called high-after machines this year, one of which has been in the past quarter.
No deep cleft dip
Because ASML controls almost the entire market for lithography machines on its own, the figures from Veldhoven are an indication of the (un) health of the chip industry. In 2024, for example, more memory chip makers bought new ASML machines-a sign that that market is picking up again. This is partly due to the demand for extra fast memory for AI chips, which there is a great need at the moment.
Last week, the rate of ASML fell after it became known that the Chinese start-up Deepseek turned out to be able to make a competitive AI model with less computing power than that of American alternatives.
The fact that AI models become smaller and handy does not mean that there is no need for fast AI chips in one fell swoop; Earlier it will speed up the spread of AI technology and thus stimulate the demand for chips. The ASML hype seems to have just begun for ASML.
CEO Christophe Fouquet remains in earlier expectations that ASML will turn between 30 and 35 billion euros in 2025. That large margin reflects the uncertainty in the industry: there is a great need for AI-related chips, but the market for electric cars, industrial applications and electronics are left behind.
In an explanation of the results, Fouquet said: “AI causes a change in the market. Some of our customers benefit from this, but there is still a lot of uncertainty for factories that produce the less advanced chips. ”
For example, the Dutch chip manufacturer Nexperia, which delivers cheaper chip parts for electronics, with disappointing results. According to insiders, the company must shrink and there are conversations with the trade unions about scrapping a few dozen jobs. It would be more than 10 percent of the 400 employees at the head office in Nijmegen.
China share
The ASML figures show how the company notices the consequences of the new, heavily subsidized chip factories that Japan and the US build. Japan accounted for 10 percent of the ASML turnover in the fourth quarter, American customers were the largest buyers with 28 percent-more than South Korea (25 percent) and China (27 percent). Taiwan, where market leader TSMC is located, is left with 10 percent.
Measured over the entire year, China ASML’s largest market. The Chinese chip industry has ‘bought’ as many systems as possible to be ahead of even strict trade restrictions. Fouquet: “There was some deficit because we could not deliver earlier orders on time. In 2025, China will again have a more normal share in our turnover – at the level of before 2023. ”