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ASML Holding is the world’s major supplier to semiconductor companies and managed to beat first-quarter net income forecasts on Wednesday, raising its full-year sales expectations.

The reason for this is the global chip shortage with demand for chips going up. The company forecasts that full-year sales could grow by 30%, up from a previous forecast that placed the numbers at around 10%.

Peter Wennink, the CEO, said that the increase is partly because of the uncertainty around ASML’s ability to get equipment to its customers in China this year, amid rising geopolitical tensions and obstructions.  

The set of circumstances behind the surge

Wennink said that compared to three months ago, ASML is seeing a significant increase in demand, across market segments and its product portfolio. The pandemic saw an increased demand for consumer electronics, stockpiling in China, and supply problems.

All of these have come together to create a global shortage of semiconductors, now felt in many industries globally. ASML shares, which have been up 35% so far this year, were 4.4% higher, going at 534.70 euros.

Dominant player

Wennink said that aside from the demand for ASML hardware, customers were also buying utilization software to increase capacity rapidly, boosting the margins. ASML’s customers include all the major chipmakers.

TSMC, Intel, and Samsung have all recently announced expansions that will need ASML equipment. In China, Wennink said that the company’s order book now includes 600 million euros in shipments that were only considered as potential in January.

ASML is based out of the Dutch town of Veldhoven and is the dominant maker of lithography systems that beam energy to map circuitry onto computer chips. They cost about 200 million euros each.