ASML records record turnover but lowers turnover expectations due to supply problems

ASML had record sales in the past quarter, but is lowering its sales forecast for this year, partly due to shortages in the supply chain. The company expected a turnover growth of twenty percent compared to 2021, but has now halved that expectation.

Shortages in the supply chain are delaying the start of production of ASML’s lithography machines, so the company announces in its quarterly results. To compensate for this, ASML delivers the machines to its customers at an earlier stage than usual, even before those machines have been fully tested. Those tests are then performed at the customer’s factory and only after these tests are completed is the machine formally marked as sold. As a result, part of the expected turnover will shift to next year, with the result that the turnover forecast for 2022 has been adjusted downwards. It would concern an amount of approximately 2.8 billion euros.

Apart from that, ASML does indicate that there is still a lot of demand for its chip machines. “Some customers are noticing signs of declining demand in certain consumer market segments, but we still see strong demand for our systems,” said ASML CEO Peter Wennink. According to the CEO, that demand is driven by trends in the automotive sector, high-performance computing and the transition to green energy.

In the past quarter, ASML received orders worth 8.5 billion euros, including 5.4 billion euros in orders for EUV and high-after-EUV machines. In the past quarter, ASML also recorded a record turnover of 5.43 billion euros. That is an increase of 53 percent compared to the same quarter in 2021 and also higher than the first quarter of this year, when the company achieved a turnover of 3.5 billion euros.

Profits were also higher last quarter, with 1.4 billion euros compared to 1.04 billion a year earlier. For the rest of the year, ASML expects the gross profit margin to be slightly lower than previously forecast, partly due to inflation, the deferred turnover and the costs incurred by the company to increase its production capacity. The company estimates that the percentage for this year will fall between 49 and 50 percent.