Workers at Carl Zeiss ZMT are seen outside the giant vacuum chambers where optical systems for ASML's new High NA EUV instrument are tested.
ASML
Chip stocks fell on Wednesday after ASML, a major developer of semiconductor manufacturing equipment, said Bookings decreased by 61% sequentially in the first quarter, the decline was steeper than investors expected.
During Wednesday's trading session, by AMD shares fell more than 4%, Nvidia Shares fell about 3% Intel shares fell nearly 2% and Qualcomm has decreased by 2%. But the biggest decline affected chip technology companies Armtraded nearly 10% lower on Wednesday.
ASML fell more than 8% in a day when the entire S&P 500 index fell less than 1%.
ASML is essentially the sole supplier of the machinery needed to make the world's most advanced chips, which typically cost hundreds of millions of dollars each. The Dutch company shipped 449 lithography machines in 2023, and its main customers include the world's leading microprocessor manufacturers: TSMC, Samsung and Intel.
Its top two customers accounted for more than half of its 2023 sales. Sales fell in Taiwan and South Korea, where TSMC and Samsung are headquartered, respectively.
Foundries actually produce the chips that companies like Nvidia or Apple design, so any sign that they are buying fewer devices could suggest a downturn in the cyclical semiconductor industry. period, which could then affect chip companies' sales to end customers. And since licensing companies like Arm book a few cents in revenue whenever a chip is produced using their technology, fewer sales of manufactured machines could signal fewer chips being made available. released to the market in general.
ASML's total machine orders fell 4% year-on-year, and CEO Peter Wennink said in a statement that he expected the second half of 2024 to be stronger than the first as the semiconductor industry trying to “recover from the recession”. adding that the company is in a “transitional year”.
“You know, it's pretty clear that there are some usual suspects who are absent from the order intake process,” Wennink said on a call with analysts.
Wennink will retire at the end of the month, he said on the earnings call. He will be replaced by Christophe Fouquet, current sales director.
Wennink said he expects companies that build foundries in the US, such as Intel and TSMC, to receive more orders for lithographic printers later this year. ASML also said it expects government subsidies to chip factories, for example CHIPS Act in the US, will boost its sales. The company did not say how China's export controls has affected its business.
“If you look at the announced plans of some of our larger customers, it's pretty clear that over the next few quarters, significant orders are going to have to come in,” Wennink said.
