ASML Projects €60bn Revenue on AI Chip Demand: Explained
The global surge in AI applications has created mass demand for advanced semiconductors, placing ASML, one of Europe's largest technology companies by market value, at the centre of the AI computing revolution.
The company's lithography machines, which cost up to €350m per unit, are essential for manufacturing the high-performance chips that power AI systems.
These machines use precise beams of light to etch microscopic patterns onto silicon wafers, creating the intricate circuits that form modern computer chips.
The complexity and precision of this process makes ASML's technology indispensable for semiconductor manufacturers, as no other company can produce comparable equipment at scale.
As a result, ASML expects sales growth between 8% and 14% over the next five years, as demand for AI chips drives investment in semiconductor manufacturing equipment.
The company projects its annual revenue could reach €60bn by 2030, supported by increasing requirements for advanced chip production.
Technology and market evolution
ASML's extreme ultraviolet (EUV) lithography technology - which uses intense light to print microscopic circuits on silicon - forms the foundation of its growth strategy.
The company plans to expand its EUV capabilities through new innovations in single-patterning technology, specifically EUV 0.33 NA and EUV 0.55 NA systems, for both advanced Logic and DRAM manufacturing.
ASML supplies these systems to global chipmakers including Taiwan Semiconductor Manufacturing Company (TSMC), Intel and Samsung.
These manufacturers use ASML's equipment to produce the most sophisticated semiconductors required for AI applications.
“We expect that our ability to scale EUV technology into the next decade and extend our versatile holistic lithography portfolio, positions ASML well to contribute to, and leverage the AI opportunity, and allows ASML to deliver significant revenue and profitability growth,” says Christophe Fouquet, President and Chief Executive Officer of ASML.
Financial outlook and market growth
The semiconductor industry outlook also indicates substantial growth potential, with ASML forecasting global semiconductor sales to exceed US$1tn by 2030.
This represents an annual market growth rate of 9% between 2025 and 2030.
“Based on our assessment of different market and technology scenarios, we expect annual revenue between approximately €44 billion and €60 billion with gross margin between approximately 56% and 60% by 2030”, says Roger Dassen, Executive Vice President and Chief Financial Officer.
"The expected growth in semiconductor end-markets and increasing lithography spending on future nodes give us confidence in strong demand for our products and services," he adds.
China export challenges
Despite optimistic growth, ASML confronts significant market restrictions in China, following export controls implemented by US and Dutch governments.
These regulations prevent the company from selling most advanced EUV and deep ultraviolet (DUV) lithography equipment to Chinese customers.
The impact of these restrictions appears in recent financial data, with ASML reporting expected China sales to decrease to 20% of total revenue, compared to more than 40% over the previous six quarters.
The company retains permission to sell older "dry" DUV product lines to Chinese customers without restrictions.
Additionally, the maintained guidance has reassured market analysts, particularly following third quarter earnings that missed expectations due to delayed orders from major customers amid weakness in non-AI chip markets.
"The first glance looks positive," Kevin Wang, Research Analyst at Mizuho Securities, the Japanese investment banking and securities firm, says to Reuters, adding that some investors had expected a cut in guidance.
"Management remains bullish on ASML’s sales and profitability growth”, he concludes.
Make sure you check out the latest edition of Technology Magazine and also sign up to our global conference series - Tech & AI LIVE 2024
Technology Magazine is a BizClik brand
