● Covered by 2 sources · 5 reportsMedium impact2 neutral
ASML Increases Sales Forecast Amid AI Chip Demand, Plans EUV Tool Price Hikes
Key points
- ASML forecasts 2023 sales of €43-45 billion due to AI chip demand.
- The company aims to boost 2026 EUV and DUV output capacity by 30%.
- ASML is exploring Low-NA EUV tool price hikes, drawing TSMC's criticism.
- ASML reported Q2 net sales of €9.3 billion and net profit of €2.9 billion.
- Price hikes could affect semiconductor industry due to ASML's market dominance.
Sales Forecast Increase
ASML has announced a significant increase in its sales forecast for 2023, attributed to the rising demand for AI chips. The Dutch company now expects full-year revenues between €43 billion and €45 billion, surpassing its previous estimate of €36 billion to €40 billion. ASML's latest projected gross margin is between 54-56%.
Capacity Expansion Plans
In response to strong customer commitments, ASML plans to expand its production capacity for its EUV and DUV machines. By 2026, target capacity increases include a 30% rise in EUV and DUV immersion tool production, prompted by continuous demand and order intake.
Price Hike Controversy
ASML is considering increasing prices of its Low-NA EUV lithography machines, which has upset its largest customer, TSMC. The planned price changes are unlikely to affect sales immediately due to existing orders filling up capacity until 2027, but could impact deliveries post-2028.
Financial Performance
ASML reported strong financial results for its second quarter, with net sales reaching €9.3 billion and net profit of €2.9 billion, exceeding market expectations. The strong performance underscores ASML's effective business strategies amidst growing semiconductor demands.
Impact on the Industry
As the sole manufacturer of EUV machines, ASML's pricing strategies and production capacity decisions have significant implications for the semiconductor industry. This could potentially shift pricing dynamics and cost structures for clients like TSMC.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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How outlets covered it
An unnamed Chinese company has reportedly begun mass-producing immersion deep ultraviolet (DUV) lithography machines, a critical tool for chip manufacturing previously monopolized by ASML. This development could reduce China's reliance on foreign technology for less-advanced chips, but the impact on ASML's market dominance is uncertain due to questions about the Chinese machines' performance and yield.
Zeiss Semiconductor Manufacturing Technology is adding 25,000 square meters of production space at its Oberkochen site in Germany, with the first new building now occupied. This expansion directly addresses the bottleneck in ASML's EUV lithography scanner production, as Zeiss is the sole supplier of critical optical components, and ASML plans to increase Low-NA EUV output by approximately 30% in 2027.
ASML is contemplating price increases for its Low-NA EUV lithography tools, which have drawn frustration from its largest customer, TSMC. Pricing changes could significantly impact the semiconductor industry due to ASML's dominant position in the market and the high costs of its evolving technologies.
ASML is exploring raising prices on its Low-NA EUV lithography tools to capture broader value beyond productivity improvements. This strategy, which follows its value-based pricing model, may primarily impact deliveries from late 2028 as existing orders fill 2027 capacity. The decision has drawn criticism from TSMC, ASML’s largest customer.
ASML raised its full-year sales forecast for the second time this year, expecting revenues of 43-45 billion euros due to strong AI chip demand. The company is also planning to increase its production capacity for EUV and DUV technologies, reflecting ongoing commitments from customers.