ASML is receiving so many orders for its chip manufacturing machines that its production capacity limit is in sight. The organization shared the news during the financial presentation of the first quarter of 2022.

ASML recorded a quarterly turnover of €3.5 billion. Profit totalled €695 million compared to €1.3 billion in the same period last year.

Pressure on production capacity

The figures are disappointing. Turnover can only be credited to the books after successful testing the machines at customers’ production sites, which has been hampered recently. In addition, the manufacturer is suffering from higher parts and material prices for machine production. Furthermore, ASML is in dire need of personnel, which results in higher costs as well.

According to CEO Peter Wennink, demand for processors remains high worldwide. This has an effect on the demand for ASML’s machines. According to Wennink, the manufacturer is nearing its absolute production capacity. The demand for machines cannot be kept up. Expanding production capacity takes a lot of time.

Prospects

Despite its problems, ASML has a positive outlook for the second quarter. Coming sales are expected to reach €5.1 billion.

The long-term outlook is favourable as well. By the end of Q1 2022, the company received orders totalling €7 billion. The chip machine manufacturer expects to generate significant sales from its advanced EUV machines, which can make ever faster and more efficient semiconductors. According to ASML, large chip manufacturers are placing particularly large orders.

ASML is currently laying the groundwork for capacity increases in 2025 and beyond. The details will probably be announced in the second half of this year.

Tip: ASML warns of long-term shortage of chip manufacturing machines