ASML’s first quarter results show chipmakers remaining reserved on expansion
Are semiconductor companies caught in an AI bubble? That’s the trillion-dollar question — and this week, we’re getting some insights, starting with ASML’s earnings report. On Wednesday, a major supplier of advanced chip machinery to TSMC, Intel, and Samsung revealed a 21.6% drop in sales compared to last year, with net income falling by 37.4%.
- While a sales decrease was expected, the 4% decline in net bookings for ASML’s machinery was more aggressive than anticipated.
- This slowdown reflects uncertainty among semiconductor firms, which are hesitating to expand production amidst a year-long lull in smartphone and laptop sales.
Reasons to worry? Quilter Cheviot’s Ben Barringer warned that the first quarter’s slowdown might be “an early warning sign” for the semiconductor industry — especially considering ASML’s outsized importance in global chip production. However, ASML maintains that its 2024 sales will look similar to 2023 as it navigates a “transition year,” preparing for a slew of new semiconductor plants in the US — and banking on a potential demand rebound, which Samsung said it’s already seeing.
