Asda's profits surged by 38%, with strong demand from China.

ASML, the giant in the lithography machine industry, reported a significant increase in revenue and profit in the second quarter, surpassing expectations and raising its full-year sales outlook.

On Wednesday, ASML released its financial report for the second quarter of 2023, which showed:

ASML achieved a net sales of 6.9 billion euros, exceeding the expected 1.82 billion euros, with a year-on-year growth of 27%;

The net profit totaled 1.9 billion euros, exceeding the expected 1.82 billion euros, with a substantial year-on-year growth of 37.6%;

Sales revenue from mainland China accounted for 24%, a significant increase of 16 percentage points compared to the first quarter's 8%.

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

It is worth mentioning that the company has also raised its full-year sales growth outlook for 2023, with the current forecast indicating a year-on-year increase in net sales of 30%, higher than the previous expectation of 25%.

ASML stated that the bright prospects are due to the strong revenue from its DUV lithography machines, with continued strong demand from Chinese customers in the second quarter. Sales revenue in the region has increased significantly. ASML CEO Peter Wennink explained:

Our Chinese customers are happy to accept machines that others don't want. When there are available devices, they will take them. So overall, our DUV business looks quite strong.

Wennink reiterated that China remains an important market and expects that the regulations in the Netherlands will not affect the company's financial forecasts for 2023 or the long term.

However, Wennink warned that the macroeconomic outlook still faces uncertainties, stating:

Due to the ongoing uncertainty in the macroeconomic environment, customers in different market segments are currently cautious. Although they expect the market to recover later, the recovery situation remains unclear.

The demand for consumer electronics and other end products remains weak, while chip companies involved in the design and manufacturing of chips for smartphones and other end products have been dealing with high inventory challenges.