ASML, a Netherlands-based manufacturer of equipment for making chips, on Thursday, November 14, stated that it expects sales growth in the range of 8% to 14% over the next five years.
The mentioned company noted that the driving force behind the specified projected upward dynamic will be the so-called artificial intelligence boom. The Netherlands-based hardware manufacturer claims that the high level of global interest in machine intelligence is contributing to an increase in sales figures for its most advanced tools.
Artificial intelligence is currently actually the main technology in the context of a new stage in the development of human civilization in the digital dimension of the corresponding space, which is already gradually beginning. AI has demonstrated its considerable abilities as a working tool. The use of artificial intelligence in business can increase productivity, optimize many processes, and modernize the practice of interaction between companies and customers by improving the corresponding activity. AI can also process, including within the framework of an analytical approach, huge amounts of information materials and generate original content. In this context, OpenAI’s ChatGPT is worth mentioning as one example. Moreover, the futurological vision of the prospects of artificial intelligence provides that the corresponding systems of digital thinking can, in the course of their technological evolution, transform into independent forms of consciousness that surpass the human mind in terms of cognitive abilities, including in the aspect of meaningful perception of the universe as a cosmological space of global being, not limited to the territory of human existence. To realize these more than large-scale prospects, a material platform is needed, the basic component of which is chips. ASML manufactures equipment for making advanced microcircuits. Without chips, it is virtually impossible to train and subsequently operate artificial intelligence systems. In a symbolic sense, the machine intelligence industry is currently in the condition of increasing prosperity. It is highly likely that the corresponding tendency will continue in the medium and long term. For ASML, the implementation of such forecasts means guaranteed consumer demand for its products.
At the same time, the tension currently observed in the space of geopolitical relations, which demonstrates a gradual increase and does not signal signs of even a potential weakening, with a high degree of realism can become a factor of sensitive impact on the Dutch equipment manufacturer from an economic point of view. In this context, it is worth mentioning separately the consistent deterioration of the condition of the system of cooperation between the United States and China. An Asian country is a huge market generating significant earnings for technology companies, including ASML. The US has limited the supply of advanced chips and equipment for the production of microcircuits of the appropriate category to China. Some of Washington’s allies, including Amsterdam, have joined the mentioned export policy measures. In January, ASML reported that it had received an order from the Dutch government to stop the supply of some products to China. Last year, the company said that export controls imposed by Washington and supported by Amsterdam would affect up to 15% of its sales in the Asian country’s market. At the same time, the United States has repeatedly declared its intention to expand the scope of restrictions on the supply of technological products and equipment to China. Also, after Donald Trump’s victory in the US presidential election, the mentioned probability became more realistic and began to contain prospects for a more significant tightening of export control measures. Moreover, Mr. Trump has repeatedly stated his intention to raise tariffs on imported goods, including from China. For ASML, this means an increase in the risks associated with operating in an Asian country, which is a space generating significant amounts of revenue.
Experts, according to media reports, described the guidance released on Thursday by the equipment manufacturer on expected financial indicators as encouraging. This guidance came on the eve of the investor day held by the mentioned company based in Veldhoven. It is highly likely that during the mentioned event, issues related to the prospects of ASML’s activities in the Chinese market will be discussed against the background of Donald Trump’s return to the White House.
The ability to operate in the mentioned Asian country is very important for the company. Currently, ASML’s Chinese customers have been stockpiling less advanced equipment to avoid facing export control measures imposed by the United States. Local consumers are interested in the opportunity to have access to high-end technologies. It is worth noting that China is already taking measures to form its technological sovereignty, which is so important at a time of growing geopolitical tensions. At the same time, in this case, there is a path to the goal that is still ongoing.
It is worth noting that ASML has never sold its most advanced extreme ultraviolet lithography, or EUV machines, to Chinese customers. Against this background, consumers from an Asian country order equipment from deep ultraviolet lithography, or DUV.
Last year, China’s share in the ASML sales structure was 29%. The company expects that in 2025 the corresponding figure will be fixed at around 20%.
The company’s total net sales for the third quarter of the current year amounted to 7.46 billion euros ($7.86 billion). In the second half of 2024, the corresponding figure was fixed at around 6.24 billion euros.
Chief executive officer of the company Christophe Fouquet said that the equipment manufacturer expects its ability to scale EUV technology to continue in the next decade. According to him, ASML has every chance to contribute to the development of artificial intelligence and use the capabilities of AI. In this case, he meant the perspective space generated by the company’s advanced chip manufacturing equipment. It is worth noting that, probably, in the appropriate context, machines should be interpreted not only as an impulse of certain opportunities in a strictly technological sense but also as a source of economic potential and a kind of impact factor on the evolution of the artificial intelligence industry. Sales of equipment for the production of chips, which are to a certain extent a fundamental element of the current stage of technological progress, can objectively contribute to revenue growth and increase profitability. According to the statements of Christophe Fouquet, ASML expects that the corresponding potential will be realized.
The company forecasts revenue in the range of 44 billion euros to 60 billion euros by 2030. Also, the manufacturer of chip-making equipment expects that the gross margin will be from 56% to 60%. It’s worth noting that in this case, there is no change compared to the long-term guidance issued by ASML in 2022.
