To The Moon

The company's earnings report came out yesterday in the middle of the U.S. trading session, and in theory, it's rare for earnings reports to come out "suddenly" like this. $ASML Holding NV(ASML)$ $ASML Holding N.V.(ASMLF)$

1. The company said it was a technical problem, but we can't rule out the possibility that it "knew there were major flaws in the results and wanted to digest them in the middle of the trading session when liquidity was better"?

2. The biggest issue is that order intake was only €2.63bn, down 53% YoY and well below market expectations of €5.39bn.

3. In addition, guidance for 2025 was lowered, from €3-4bn to €3-3.5bn, below market expectations of €3.53bn.Gross margins are expected to be 51%-53%, lower than previous guidance of 54%-56%

Perhaps you might be wondering how it was possible to do that with less than expected orders when clearly Q3 overall revenue still beat expectations.

The reason is that the ArFi portion of the revenue was massively ahead of expectations ($2.8B actual vs $2B expected), and the ArFi portion refers to orders for DUVs, which are a little bit older equipment.

The main reason is still in the Dutch government "export ban" before the effective date, a big East desperately placed orders.

So now you may understand why the market is so panicky, right?Because starting next quarter

1. EUV's orders may continue to drop and fall short of expectations

2. DUV's orders may be crazy waist cut, because of the loss of big customers of the East University

In fact, ASML's weak performance has long been reflected in other companies' earnings reports last quarter.

To cite the most obvious example, $Taiwan Semiconductor Manufacturing(TSM)$ , in the Q2 earnings report, they showed very conservative capital expenditure expectations.Obviously 3mn as well as 2mn capacity is still insufficient, why not expand production?

Two reasons

1. Cautiousness about ASML's new EUV technology node, leading to a delay in the timing of EUV demand.

2. Possibly considering that the demand will slow down in 2026 and beyond, too many orders will cause "result of reduced economies of scale" (economies of scale).

   

$Intel(INTC)$ expressed the same thing…

Therefore, following such expectations, ASML, not to mention the short term, may be next year the whole year after the lowering of expectations, continue to fall short of expectations ......