ASML, the giant in the lithography machine industry, has raised its full-year sales guidance, with an order backlog of 38 billion euros.

On Wednesday, the company raised its annual sales forecast, although it warned that the recovery in the semiconductor industry could be delayed.

In pre-market trading, ASML fell more than 1%, but it has risen nearly 40% so far this year.

Better-than-expected performance

ASML's net sales in the second quarter were 6.9 billion euros, exceeding the expected 6.69 billion euros. In the same period last year, it was 5.43 billion euros, and in the previous quarter, it was 6.75 billion euros. The second-quarter order value was 4.5 billion euros, while the market expected 3.98 billion euros.

Another aspect worth noting is the gross margin of ASML's products. In the second quarter of 2023, the gross margin of ASML's products was 51.3%, compared to 50.6% in the first quarter, an increase of 0.7 percentage points.

ASML's net profit in the second quarter was 1.94 billion euros, compared to 1.96 billion euros in the first quarter, a slight YoY decline of about 0.7%.

The board of directors announced a mid-term dividend of 1.45 euros per share.

More importantly, ASML has raised its full-year sales forecast, as the slow recovery of the chip market has not hindered its development.

ASML expects net sales in the third quarter to be between 6.5 billion and 7 billion euros, with a gross margin of about 50%.

ASML expects overall net sales in 2023 to grow by 30% compared to 2022, up from the previous forecast of over 25%.

"Due to the continued macroeconomic uncertainty, our customers in different market segments are currently more cautious, and the state of recovery is still unclear," said CEO Peter Wennink.

"However, the substantial backlog of approximately 38 billion euros in orders provides us with a solid foundation to deal with these short-term uncertainties."

Customer satisfaction in China is less than half

Recently, the Dutch government issued new regulations on the export control of semiconductor equipment. According to the regulations, ASML needs to apply for an export license from the Dutch government to ship its most advanced immersion DUV systems. This regulation will take effect on September 1st this year.

During the second-quarter earnings conference, ASML CEO Peter Wennink mentioned that in the DUV product segment, although there has been some decline in demand in different market segments within the industry, the demand satisfaction rate, including Chinese customers, has been less than 50% in the past two years. Therefore, with the relatively sufficient preparation of Chinese wafer fabs, the Chinese market has absorbed some of the slowing DUV demand from other markets.

Industry insiders believe that due to its monopoly position in EUV lithography systems, ASML's market share will continue to increase.