Because ASML risks big with China
Restrictions on sales of chip technology in China pose a risk to ASML, Europe's largest technology company. The analysis of the BG Saxo research centre
ASML, the world's largest semiconductor maker of lithographic machines, reported better-than-expected first-quarter results . Second quarter revenue guidance was also above estimates at €6.5-7 billion, above estimates of €6.4 billion.
ASML also reaffirmed its long-term revenue targets of around €44-60 billion by 2030 with a gross margin of between 56 and 60%; up from revenues of €21.2 billion in FY22 and gross margin of 50.5%.
In the long run it is being helped by more demand for computer chips needed in more and more fields like electric vehicles, AI computers, military spending etc.
While this is good news, the share price fell at the time of the quarterly release and tested key supports as the market is pricing two main factors against the company:
- Conflicting signals on demand from different segments of the final market;
- Risk related to Chinese restrictions. China accounts for 8% of total system sales and 20% of backlogs.
ASML was helped last Thursday by major client TSMC to keep its full-year capex target unchanged, saying it is "appropriate and prudent." Initial fears were that they would cut spending.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/asml-cina-rischio/ on Mon, 01 May 2023 05:28:53 +0000.