ASML predicts sales boom as demand for chip making machines surges
ASML Holding Semiconductor company logo seen displayed on smart phone. ASML, a Dutch company, is currently the biggest supplier of photolithography equipment for the semiconductor industry. (
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ASML has raised its long-term outlook following a surge in demand for the semiconductors that its machines help to make.
The Dutch company, which makes the lithography equipment that’s used to produce the world’s most advanced chips, said in a statement on its investor day that it now expects annual revenue to hit 24-30 billion euros ($28-$35 billion) by 2025, with gross margins up to between 54% and 56%.
Its prediction was significantly more than its previous projections of between 15 and 24 billion euros.
According to the company, “We see substantial growth opportunities beyond 2025.” It also stated that they expect to reach a 11% annual revenue growth rate between 2020-2030.
ASML predicted that there will be “global megatrends within the electronic industry”, accompanied by a “highly lucrative and fiercely innovative ecosystem”, which should continue to propel growth throughout the semiconductor market.
ASML stated that the demand for their products and services is driven by growth in semiconductor markets, and an “increasingly intense lithography.”
ASML, based in Veldhoven is the only company capable of building sophisticated machines required by chip makers to produce the best chips. They are more efficient and faster than the predecessors.
Reuters reported last year that the Trump administration pressured the Netherlands government to stop the sale of the machine to Chinese customers.
“ASML is absolutely critical to the entire semiconductor ecosystem,” Peter Hanbury, a partner at management consultancy Bain & Company with a focus on semiconductors, told CNBC in June. It’s as vital as TSMC in some ways.
Frank Bosenberg is the managing director for Silicon Saxony tech network. He stated that ASML has been a “major asset” to the semiconductor industry.
As chipmakers continue to invest in new equipment and facilities to keep up with rising demand, the company will reap the benefits. TSMC, for example, has pledged to spend $100 billion in the next three years to expand its capacity and alleviate the current bottlenecks.
Tesla CEO Elon Musk said last week that he expects that the global chip shortage is a short term issue that will end next year as new chip plants come online. AMD CEO Lisa Su said She also predicted that it would end in the next year on Monday.
ASML’s Amsterdam-listed shares were up 1.7% Wednesday morning. They have been up 70% thus far in this year.