asml secures major euv orders, strengthening market lead

2024-12-18 asml

Veldhoven, Wednesday, 18 December 2024.
ASML has received significant orders for its advanced EUV technology from top chipmakers, reinforcing its dominance in the semiconductor industry. These new contracts have the potential to positively impact ASML’s stock, which has seen varied performance in recent years. Despite a 5% decrease in stock value over the past three years, ASML’s exclusive hold on EUV lithography systems remains a critical asset. These systems, essential for high-end chip production, cost upwards of $150 million each. While export restrictions to China and market saturation have posed challenges, potentially limiting revenue growth to 2% in 2024, analysts remain optimistic about future prospects. By 2025, ASML’s revenue and earnings per share (EPS) are expected to climb significantly by 15% and 27%, respectively. The company’s technological advancements and strategic orders position it well amidst the growing demand for AI-powered semiconductors.

Unprecedented demand for advanced lithography

ASML’s position as the sole provider of extreme ultraviolet (EUV) lithography systems [1][3] continues to drive its market dominance. The company’s latest high-NA EUV system, priced at approximately $380 million [6], represents a significant technological leap forward. Intel has already placed orders and received their first shipment at their Oregon facility [6], with production scheduled to begin in late 2025 [6].

AI drives future growth prospects

The semiconductor market is projected to exceed $1 trillion by 2030, with a compound annual growth rate of 9% [2]. AI-related demand is expected to constitute approximately 40% of total semiconductor demand by 2030 [2]. ASML’s technology proves crucial for this expansion, as their EUV systems enable the production of increasingly sophisticated chips required for AI applications [2][6].

Performance metrics and market outlook

ASML’s financial performance remains robust with a gross profit margin of 51.15% and twelve-month revenue reaching $29.3 billion [4]. While 2024 faces temporary headwinds with projected revenue growth of only 2% [1][3], analysts forecast a strong rebound in 2025 with revenue growth of 15% and EPS growth of 27% [1][3][4].

Technological advancement and production capacity

ASML continues to enhance its technological capabilities, planning to increase EUV machine productivity from the current 220 wafers per hour to 250 wafers per hour with the upcoming NXD:4000F machine in 2027 [2]. This advancement coincides with growing demand from major customers like TSMC, Samsung, and Intel [2][3], though some customers are currently deferring capital expenditures due to production challenges [2].

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asml EUV orders