ASML remains bullish for 2030 outlook as AI demand stays high

ASML has reiterated its outlook for revenue for the next five years, to 2030. The company revealed this was mainly based on expectations that artificial intelligence (AI) demand would continue to soar in the coming few years. 

The share price jumped 6.99% on Thursday afternoon, trading at €671.60. 

The company used 2024 Investor Day to highlighted current technology and global market trends, while also providing more details about its long-term strategy. 

ASML said it expects its 2030 revenue to be somewhere between €44bn and €60bn. It also expected a gross margin of anywhere between 56% and 60%. 

The guidance reiteration is expected to go a long way in boosting investor confidence following the company’s disappointing order intake in the third quarter of the year. Although demand for AI chips has been strong, the company has also faced declining demand from buyers such as mobile phone manufacturers, vehicle companies and PC makers. 

However, the long-term outlook for the semiconductor industry continues to remain robust, as the chips can be used in a variety of applications such as computers, vehicles, solar panels, household appliances and much more. They are also key in a range of artificial intelligence technology. 

ASML expects semiconductor sales to touch more than $1tn (€0.95tn), with the company also estimating that the semiconductor market worldwide would see a growth rate of about 9% between 2025 and 2030. 

Christophe Fouquet, the president and chief executive officer (CEO) of ASML, said in a statement on the company’s website: “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 Artificial Intelligence (AI) opportunity, and allows ASML to deliver significant revenue and profitability growth.”

Roger Dassen, the executive vice president and chief financial officer (CFO) of ASML, also said in the statement: “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.

“We confirm our capital allocation strategy, and expect to continue to return significant amounts of cash to our shareholders through a combination of growing dividends and share buybacks.”

ASML net sales rise in the third quarter

ASML reported net sales of €7.5bn in the third quarter of the year, up from €6.2bn in the second quarter of the year. Net income was €2.1bn in Q3 2024, up from €1.5bn in Q2 2024. 

Fouquet said in the third quarter earnings press release: “While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness.”

With the rising tensions between the EU and China, as well as between China and the US, especially in the wake of the recent US elections, the EU has continued to focus on building its domestic semiconductor competence. 

This has mainly been supported by the European Chips Act which says: “Europe must reinforce its capabilities in semiconductors to ensure future competitiveness and maintain its technological leadership. 

“Security of supply of semiconductors must be ensured to enhance the Union’s strategic autonomy. The semiconductor sector is both capital and knowledge intensive. Supply chains are global, complex and currently rely on few manufacturing locations, in particular in the Far East.”

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This focus on domestic semiconductor production is also likely to boost demand for ASML.