The fourth quarter has delivered a new revenue record for ASML. As a result, 2024 as a whole will go down as a record year for the Dutch chip machine maker. But with challenges growing bigger than ever, what does the future hold?
Unlike in Q3, this time ASML’s quarterly figures were kept under wraps until the official press release. That was probably for the best: back in October, a leak of these results caused stock market turmoil. While there were AI-related doubts on Wall Street on Monday that did affect ASML to some extent, the positive figures might soon put those concerns to rest.
Total net sales amounted to 9.3 billion euros in Q4, with net income of 2.7 billion euros. Orders for new chip machines totaled 7.1 billion euros, of which 3 billion euros came from more advanced EUV equipment. Expectations for Q1 are slightly more cautious, in line with previous years: between 7.5 billion and 8 billion euros in revenue. For the whole of 2025, the projection is 30 to 35 billion euros in sales. That would be another record year, following the 28.3 billion euros brought in during 2024.
Transition year over
When ASML presented its Q1 figures last April, the tone was noticeably more cautious. According to now ex-CEO Peter Wennink, 2024 would be a “transition year.” In terms of leadership, it certainly has been: Frenchman Christophe Fouquet is now in charge. He reiterates that a third High-NA EUV machine has already been shipped to a customer—this is ASML’s latest, most expensive, and most powerful equipment.
Over the longer term, ASML appears to be in a strong position. Its technological lead is so great that no competitor is expected to reproduce High-NA EUV in the coming years. Canon is experimenting behind the scenes with “nano-imprint” machinery for cheaper advanced chip production, but that remains some way off. TSMC, Samsung, and Intel Foundry can only turn to ASML for their future chip processes.
Turmoil right now, however….
When you look at the current situation, the headlines are filled with turbulence in the chip world. Although GenAI has boosted what was an otherwise struggling chip market, doubts triggered by DeepSeek caused a $1 trillion drop in tech share prices. The Chinese company DeepSeek built an almost state-of-the-art AI model with much less money than usual and with not-so-new Nvidia chips—something that will certainly worry OpenAI, Google, and Meta. On Monday, Nvidia took a hit of nearly 17 percent on the stock market, which also reflected negatively on ASML’s order book. Even so, things have calmed down somewhat since then, and the main takeaway remains that AI’s growth will require many chips, and therefore many chip machines, in the future.
China restrictions and tariff walls?
A big question is how much revenue ASML generated from China. That may be clarified during the earnings call at 11 a.m. What is known is that ASML isn’t overly concerned: it does not plan to lower its order expectations due to the new export restrictions toward China. EUV machines have always remained outside that country, but DUV restrictions—on machines for older chip production methods—do raise some concerns. According to ASML, even more curtailments would be needed to affect its outlook for 2025.
What remains highly uncertain is the potential tariff wall threatened by President Trump. Specifically, there is talk of massive tariffs—up to 100 percent—on chips manufactured in Taiwan. This would mean American companies would have to pay those tariffs if they buy TSMC-made processors not produced in the US. While there is some capacity in Arizona, such a tariff wall could still have a huge impact on TSMC’s overall sales. That, in turn, poses problems for ASML, since TSMC is by far the largest chip producer in the world. Whether or not this happens depends on Trump’s possible decision, and that could be very negative for ASML. For now, the mood remains upbeat, and 2025 is heading toward another record year if all things stay the same.
Also read: Philips sells ASML supplier: new independent company Xiver