Critical chip machine maker ASML predicts a sales boom over the next decade

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  • The Dutch company now expects annual revenue to reach 24–30 billion euros (28–$35 billion) by 2025, with gross margins between 54% and 56%.
  • The forecast is much higher than the 15-24 billion euro range it had previously estimated.
  • “We see significant growth opportunities beyond 2025,” the company said, adding that it expects to achieve an annual revenue growth rate of approximately 11% between 2020 and 2030.

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ASML has enhanced its long-term outlook following an increase in demand for the semiconductors that its machines help build.

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The Dutch company, which manufactures the lithography equipment used to produce the world’s most advanced chips, said in a statement on its Investor Day It now expects annual revenue to reach 24–30 billion euros (28–$35 billion) by 2025, with gross margins between 54% and 56%.

The forecast is much higher than the 15-24 billion euro range it had previously estimated.

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“We see significant growth opportunities beyond 2025,” the company said, adding that it expects to achieve an annual revenue growth rate of approximately 11% between 2020 and 2030.

Worldwide demand for chips has soared over the past year, when the coronavirus pandemic caused chip shortages that wreaked havoc on the automotive industry and beyond.

ASML stated that “global megatrends in the electronics industry” as well as “a highly profitable and fiercely innovative ecosystem” are expected to fuel growth in the semiconductor market.

It added that growth in the semiconductor markets and “increasing lithography intensity” are driving demand for its products and services.

Headquartered in Veldhoven, ASML is the only company in the world capable of manufacturing the sophisticated machines that chip makers require to make the most advanced chips. These chips are faster and more efficient than their predecessors.

ASML’s customers include Samsung and Taiwan Semiconductor Manufacturing Company, which manufactures chips for the likes of Apple.

Reuters reported last year That the Trump administration pressured the Netherlands government to halt the sale of the machine to Chinese customers.

Importance of ASML

“ASML is absolutely critical to the entire semiconductor ecosystem,” Peter Hanbury, partner at Bain & Company, a management consultancy focused on semiconductors, told Businesshala in June. “In some ways, it’s as important as TSMC.”

Frank Bosenberg, managing director of tech network Silicon Saxony, told Businesshala in August that ASML is “a major asset” within the semiconductor industry.

As part of an effort to meet growing demand, chip makers invest heavily in new features and equipment, so the company benefits. For example, TSMC has pledged to spend $100 billion over the next three years to expand its capacity and address existing constraints.

Tesla CEO Elon Musk said last week that he expects the global chip shortage to be a short-term issue that will end next year as new chip plants come online. AMD CEO Lisa Su said on Monday that she too expects it to end next year.

Amsterdam-listed shares of ASML, which has a market value of $322 billion, were up 1.7% on Wednesday morning and have risen 70% so far this year.

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