ASML Q3 earnings beat; sees limited impact on U.S. chip curbs on China

Dutch agency ASML makes one of the crucial vital items of equipment required to fabricate essentially the most superior chips on the planet. U.S. chip curbs have left corporations, together with ASML, scrambling to determine what the principles imply in observe.

Emmanuel Dunand | AFP | Getty Images

Shares of ASML, one of many world’s most vital companies within the semiconductor provide chain, jumped 6% on Wednesday after reporting sturdy earnings that bucked the development of a slowdown within the chip business.

The Dutch company additionally mentioned that the most recent export curbs on high-end chips to China would have a “limited” impact on its business.

ASML doesn’t make chips. Instead, it sells $200 million excessive ultraviolet lithography machines to semiconductor producers like Taiwan’s TSMC, that are required to take advantage of superior chips. It is the one company on the planet making such machines, giving it a de-facto monopoly on this a part of the availability chain and making it one of the crucial vital companies within the semiconductor business.

ASML mentioned Wednesday income for the third quarter of 2022 got here in at 5.77 billon euros ($5.6 billion), beating analysts forecast of 5.41 billion euros, based on Reuters. That was a ten% year-on-year rise.

Net revenue totaled 1.7 billion euros versus forecasts of 1.42 billion euros, a 2.2% lower versus the identical interval final year, however increased when in comparison with the second quarter of this year.

Shares of chip companies have been battered in 2022 amid a slowdown in development amongst corporations like Samsung and Micron because the semiconductor increase hits a wall. ASML shares are down round 40% to date this year.

But the sturdy outcomes from ASML bucked the broader market slowdown, sending shares greater than 6% increased in European morning commerce.

“This is a classic case of ASML’s relative resilience versus the rest of its peers coming to the fore,” Amit Harchandani, head of European technology fairness analysis at Citi, instructed CNBC’s “Squawk Box Europe” on Wednesday.

“This strength overall that ASML sees … we would say is more a reflection of the relative positioning of the company as opposed to the broader semiconductor cycle … The broader cycle definitely seems to be going through a downward phase now.”

Peter Wennink, CEO of ASML mentioned Wednesday there may be “uncertainty in the market due to a number of global macro-economic concerns including inflation, consumer confidence and the risk of a recession.”

“While we are starting to see diverging demand dynamics per market segment, the overall demand for our systems continues to be strong.”

U.S. export curbs on China in focus

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