Despite a challenging market environment, ASML ended its fiscal year 2022 with net sales of €21.2 billion, up 13.8% year on year, and net income of €5.6 billion, down 4.4% year on year. ASML expects net sales will grow over 25% in 2023.

For the fourth quarter of 2022, the Veldhoven, Netherlands–based company reported net sales of €6.4 billion, at the midpoint of its guidance range, and a net income of €1.8 billion. “Bookings were good,” ASML CEO Peter Wennink said in a video interview posted on the company’s website after publishing its quarterly and annual results. “We booked over €6 billion in terms of booking, leading to a record backlog by the end of 2022 of over €40 billion. [We have] never seen that before. So a record backlog.”

The gross margin came in at 51.5% in the fourth quarter and 50.5% for the full year.

“It was quite a good year [with] good performance under some challenging circumstances,” Wennink said.

Strong sales growth in 2023

In 2023, Wennink said, “there is a fear of recession, as driven by high inflation, high interest rates, geopolitical confrontations, discussions about export controls.” He sees “a weaker demand for consumer-related products, such as smartphones and PCs […] and some lower growth rates in the data center domain.” On the bright side, Wennink identifies strong demand in the industrial and automotive sectors.

ASML is the only manufacturer of critical extreme-ultraviolet (EUV) lithography machines, and demand remains higher than it can supply.

Wennink commented, “The expectation of the duration of a potential recession in the minds of our customers is much shorter than the average lead time of our machines, because they want to prepare—because of the strategic nature of our machines—for an upturn in the second half of the year and 2024. That means that the demand is still higher than what we can make.”

For the first quarter of 2023, ASML expects net sales between €6.1 billion and €6.5 billion, with a gross margin between 49% and 50%.

For the full year 2023, ASML expects net sales to grow over 25% year on year.

Beyond 2023

Digitization and clean electrification are two global megatrends that are driving unprecedented growth in the semiconductor industry.

“The medium- to longer-term future of the company is very bright,” Wennink said.

According to McKinsey, the global semiconductor industry will experience a decade of growth and is projected to become a trillion-dollar industry by 2030. However, to reach such objectives, ASML will have to be able to provide its customers with lithography systems and services.

Wennink confirmed ASML is targeting a capacity of 90 EUV systems and 600 deep-ultraviolet (DUV) systems by the 2025–2026 time frame and 20 high-NA systems by 2027–2028.

He commented, “Depending on whether we are in a high market or low market, by 2025, we could be anywhere between €30 billion and €40 billion in sales. And depending on whether we will be in a lower or higher market by 2030, we think we will be between €44 billion and €60 billion in sales by that time.”

By: DocMemory
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