After a turnover increase of 30 percent in the past year, chip machine maker ASML is planning no further growth this year. The chip industry is recovering from a serious dip, but major players such as Intel, Samsung and TSMC are still cautious about additional orders. ASML will notice this in 2024, said financial director Roger Dassen on Wednesday during the presentation of the annual figures.
Over the course of 2023, all major chip manufacturers presented disappointing results. The market for memory chips in particular fell sharply due to high inventories. ASML reported that this was not yet noticeable in its results; The multinational achieved 27.6 billion euros in turnover and 7.8 billion in profits last year.
Demand from China continued to increase in 2023 as chip manufacturers in that country did not put on the brakes. They tried to buy as many ASML machines as possible to avoid the American and Dutch export restrictions. Officially, the export restrictions came into effect on September 1, but ASML was allowed to ship advanced chip machines to China for another four months. The idea behind the restrictions is that they prevent China from producing advanced chips that will increase its military and technological power.
According to Dassen, the export restriction measures will cost 10 to 15 percent of ASML turnover in China, 8 billion euros in 2023. That loss would then amount to 800 million to 1.2 billion euros.
Momentum
For the chip machine manufacturer, 2024 is a transition year in advance. After more than thirteen years, the company has a new CEO and it is preparing for an explosive increase in demand for chip machines. “Building momentum,” chief financial officer Roger Dassen calls it. More production capacity is needed, in North Brabant and in the international branches, to meet future demand.
Regardless of the fluctuations in demand, the size of the chip industry is expected to double by 2030. The demand for semiconductors is increasing, and they are largely produced with the help of ASML, which has a monopoly on the most advanced machines.
Europe and the US are expanding their production capacity to no longer be completely dependent on chips from Asia, while Asia continues to grow just as fast. South Korea announced last week that it would allocate $470 billion over the next 25 years to develop its own chip industry.
The current managers at ASML, general manager Peter Wennink and technical director Martin van den Brink, will retire at the end of April. The new CEO will be Frenchman Christophe Fouquet, if the shareholders agree.
ASML is currently the most valuable tech company in Europe. In the run-up to the announcement of the annual results, the stock market value rose to almost 300 billion euros and is almost back to the peak of 2021, when ASML was unable to acquire the chip machines during corona times.