ASML's financial report presents a mixed picture: Q2 orders exceed expectations, while Q3 revenue and gross margin guidance fall short of expectations

According to the VESYNC APP, Dutch semiconductor equipment giant ASML.US released its second-quarter earnings report, exceeding market expectations, driven by the strong demand for high-performance chips due to the vigorous development of artificial intelligence technology. The financial report shows that ASML's total revenue in the second quarter reached 6.24 billion euros, an increase of 18.0% quarter-on-quarter, a decrease of 9.6% year-on-year, exceeding the upper limit of the management's guidance of 6.2 billion euros, and also higher than analysts' expectations of 6 billion euros; net profit was 1.578 billion euros, an increase of 28.92% quarter-on-quarter, significantly higher than the 1.224 billion euros in the previous quarter; the gross profit margin also remained at a high level of 51.5%, exceeding the upper limit of the management's guidance of 51%, and also higher than analysts' expectations of 50.6%.

In addition, the company's order amount in the second quarter increased to 5.57 billion euros (approximately 6.08 billion U.S. dollars), far exceeding the market's expected 4.41 billion euros.

ASML holds a monopoly position in the production of the most advanced semiconductor equipment, and its business growth is closely related to the increasing demand for artificial intelligence applications. The strong performance of some of its largest customers has helped support the demand for the company's equipment. For example, TSMC achieved the fastest sales growth rate since 2022 in the second quarter, largely due to the artificial intelligence boom.

It is understood that ASML showed significant growth in the sales of new and old lithography systems in the second quarter of 2024. The sales volume of new lithography systems reached 89 units, an increase of 34.8% quarter-on-quarter, although it decreased compared to the same period last year, but this growth demonstrates a strong recovery in market demand. At the same time, the sales volume of old lithography systems surged from 4 units in the previous quarter to 11 units, an increase of 175.0% quarter-on-quarter and 83.3% year-on-year, indicating a strong demand for these devices in the second-hand market.

From the overall trend, ASML has experienced some fluctuations in the sales of lithography systems, but overall it shows a gradual recovery in market demand, especially in the sales of new equipment, despite facing some challenges in year-over-year comparisons. The market demand for old equipment also shows some growth, which may be related to the increasing demand for cost-effective solutions in the market.

Last quarter was the first quarter for ASML's new CEO Christophe Fouquet after taking office. He succeeded Peter Wennink, who retired in April this year, and is currently focusing on maintaining business development in the company's largest market - China, while complying with US export control policies towards China. In order to slow down China's progress in the semiconductor manufacturing field, the US has pressured the Netherlands, leading ASML to stop exporting its second-largest category of advanced machinery - immersion DUV lithography machines to China earlier this year.

It is reported that the US government is considering the most stringent trade restriction measures, including the Foreign Direct Product Rule, against companies including ASML if these companies continue to provide advanced equipment services in China. This policy change is expected to affect ASML's sales in China, potentially up to 15%. Despite never being allowed to sell its most advanced Extreme Ultraviolet (EUV) technology to China, equipment purchases by Chinese chip manufacturers before the new export restrictions have already brought revenue growth to ASML.

Despite the challenges of export restrictions, ASML remains optimistic about future development. The company expects that although sales may remain flat this year, they will resume strong growth by 2025. Looking ahead to the third quarter, ASML expects total revenue to be between 6.7 billion euros and 7.3 billion euros, below analysts' expectations of 7.46 billion euros, with a gross margin expected to be between 50% and 51%, also lower than the market's expectation of 51.1%. As a result, ASML's after-hours stock price fell by 4.04%.

Overall, ASML's performance report reflects its leadership position in the global semiconductor equipment market and the continued driving force of artificial intelligence technology on the demand for high-performance chips. Despite facing geopolitical and trade policy challenges, the company has demonstrated the ability to adapt to market changes and seize future opportunities