Semiconductor equipment giant ASML has declared the chip industry’s slump over, predicting a budding recovery despite continued woes for major chipmakers.
“We believe the market has now bottomed out,” stated ASML’s CFO Roger Dassen in a recent report, acknowledging the uncertain future but highlighting “recovery” on the horizon. Long-term trends, according to Dassen, are “undoubtedly certain” to push ASML’s business forward, driven by forces like artificial intelligence, electrification, and the energy revolution.
While chip giants like Intel, Texas Instruments, and Infineon have braced for weak sales this year, ASML’s demand signals a broader industry shift. Notably, their largest customer purchased a staggering €8.78 billion ($9.4 billion) worth of equipment in 2023, representing 32% of ASML’s overall revenue. Two customers alone accounted for a dominant 54% of their sales last year, signifying the concentrated nature of the market.
Despite ASML’s optimism, challenges remain. The recent financial reports from major chipmakers paint a picture of sluggish sales, indicating a potentially uneven recovery across the industry. Additionally, ASML’s reliance on a small number of customers raises concerns about vulnerability to individual company fluctuations.
However, ASML’s bullish outlook highlights a potential turning point for the chip industry. With long-term trends in their favor and signs of recovery emerging, the industry may be poised to navigate past the recent slump and emerge stronger.
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