ASML, a leading supplier of equipment for the computer chip industry, reported strong fourth-quarter earnings and forecasted a sales growth of more than 25% in 2023, all while their order backlog grew to a record €40 billion ($43.62 billion). Despite the economic slowdown caused by the pandemic and the US export restrictions on the older equipment, ASML is positioned to capitalize on the increasing trend of digitization and continue its strong growth in the years to come.
Despite concerns over the economy and growing semiconductor inventories, CEO Peter Wennink believes that conditions will improve towards the end of the year, with China’s economy recovering after the end of COVID-19 curbs. “That means that the demand is still higher than what we can make,” he stated.
The announcement comes a week after U.S. President Joe Biden and Dutch Prime Minister Mark Rutte discussed possible new export restrictions on sales of ASML’s older equipment to customers in China due to security concerns. However, Wennink assured that “nothing has changed” since the U.S. imposed new export restrictions on its own companies in October.
The Netherlands-based firm reported a fourth-quarter net profit of €1.82 billion, up from €1.77 billion in the same period a year earlier, on revenue of €6.43 billion. These numbers exceeded analysts’ expectations, with Refinitiv data forecasting a net profit of €1.70 billion on sales of €6.38 billion.
As the world becomes increasingly digital, the demand for computer chips and the equipment used to produce them is expected to continue growing. ASML, with its strong track record and expertise in the industry, is well-positioned to capitalize on this trend and continue its growth in the coming years. However, the company will need to navigate the challenges of the current economic conditions and the ongoing effects of the pandemic.
