By Mauro Orru
ASML Holding said it would maintain its 2030 sales and margin targets, betting that booming demand for artificial intelligence will drive orders for equipment that chip makers need to make increasingly powerful semiconductors.
The Dutch company is forecasting sales of roughly 44 billion euros to 60 billion euros ($46.48 billion-$63.39 billion) in 2030, with a gross margin of about 56% to 60%.
ASML supplies semiconductor-making machinery to the likes of Taiwan Semiconductor Manufacturing Co., Samsung Electronics and other chip-making clients who face pressure from their own customers to churn out more capable chips.
Confirmation of the company's long-term targets underscores confidence from ASML executives that AI will lift orders in the coming years as chip makers race to build more sophisticated semiconductors.
ASML said the long-term outlook for the chip industry remains promising as it believes AI creates a significant opportunity that should help push global semiconductor sales to more than $1 trillion by the end of the decade.
The company said it expects double-digit spending growth on its high-end extreme ultraviolet lithography tools every year between 2025 and 2030. Those tools are used to print the most intricate layers on chips found in the latest gaming consoles, smartwatches and smartphones.
Chief Financial Officer Roger Dassen said the expected growth in semiconductor end-markets and higher lithography spending meant strong demand for ASML's equipment in coming years. The company said it would continue to return significant amounts of cash to shareholders through growing dividends and share buybacks.
ASML is a key beneficiary of the AI bonanza, but the company has also been hurt by weak spending from some chip makers.
Demand across the semiconductor industry has been uneven in recent months. Orders for chips to power AI in data centers keep booming, but manufacturers of smartphones, laptops, electric vehicles and industrial machinery cut spending on chips lately because they stockpiled the semiconductors they needed years back.
That schism in demand for AI chips and other semiconductors created diverging fortunes for chip makers. Those with significant AI exposure like Nvidia have grown exponentially in recent years, but companies that make chips mostly for the automotive sector, industrial equipment and personal electronics have been grappling with lackluster demand.
ASML last month cut its sales forecasts for next year, saying some areas of the semiconductor industry aside from AI were taking longer than expected to recover. The company forecast between 30 billion euros and 35 billion euros in sales in 2025, below previous guidance of up to 40 billion euros.
That announcement wiped out more than $60 billion from ASML's market value last month. ASML shares have been under strain in recent months following sets of volatile orders.
Investor concerns at the prospect of tighter export restrictions to China also weighed on the stock as Washington and its allies seek to curb Beijing's access to advanced semiconductors that could be used for military applications.
ASML shares in Amsterdam are down 5% since the year began, but the stock climbed more than 3% Thursday after the confirmation of long-term targets reassured investors.
The company hasn't commented on what impact, if any, the incoming Trump administration could have on exports to China, but ASML executives said in an earnings call last month that they were actively monitoring and factoring in press reports on potential curbs into their planning.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
November 14, 2024 03:40 ET (08:40 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments