ASML Holding NV, a leading player in the semiconductor industry, saw its shares plummet by 16% following a disappointing earnings report that revealed a significant drop in bookings. The company reported only €2.6 billion in orders for the third quarter, far below the expected €5.39 billion, raising concerns about a slower recovery in the chip market.
Key Takeaways
- ASML’s shares fell 16%, marking the largest decline since 1998.
- The company reported third-quarter bookings of €2.6 billion, missing analyst expectations.
- ASML lowered its 2025 revenue guidance to between €30 billion and €35 billion.
- The semiconductor sector is experiencing uneven demand, particularly outside of AI-related markets.
Disappointing Earnings Report
ASML’s recent earnings report, which was mistakenly published a day early, revealed a stark contrast between actual bookings and analyst expectations. The company’s CEO, Christophe Fouquet, indicated that the recovery in the semiconductor market is more gradual than anticipated, particularly in sectors outside of artificial intelligence.
The reported net sales for the third quarter reached €7.5 billion, slightly above last year’s figures, but the net bookings were alarming. The company’s guidance for 2025 was also revised downward, with expected revenues now between €30 billion and €35 billion, compared to previous estimates of up to €40 billion.
Market Reactions
The immediate aftermath of ASML’s report saw a ripple effect across the tech sector:
- Nvidia: Down 4.5%
- Applied Materials: Down 10%
- Lam Research: Experienced its worst decline since 2020
- KLA Corp: Saw its largest drop in nearly a decade
This downturn reflects broader concerns about the semiconductor industry, which is grappling with uneven demand. While AI-related sectors continue to thrive, other areas, such as automotive and industrial chips, are facing significant challenges due to excess inventory and reduced orders.
Challenges Ahead
Fouquet highlighted that customer cautiousness is impacting investment decisions, leading to delays in orders. The company is also facing external pressures, including:
- US Export Restrictions: New rules have limited ASML’s ability to ship advanced machinery to China, which accounted for 47% of its sales in the last quarter.
- Competitive Issues: Key customers like Intel and Samsung are struggling, which has further dampened ASML’s outlook.
Looking Forward
Despite the current challenges, ASML remains a critical supplier in the semiconductor industry. The company continues to play a vital role in producing advanced chipmaking machines used by major players like Taiwan Semiconductor Manufacturing Company and Samsung Electronics. However, the outlook for 2025 suggests a prolonged recovery, with potential sales to China expected to drop significantly.
In summary, ASML’s recent performance has raised alarms about the health of the semiconductor market, with implications for both the company and its broader industry. Investors and analysts will be closely monitoring the situation as ASML navigates these turbulent waters.
Sources
- ASML Shares Plunge as Bookings Miss Signals Chipmaker Woes, Yahoo Finance.
- ASML shares drop sharply after warning on semiconductor recovery, Financial Times.
- ASML Shares Plummet on Mistakenly-Released Q3 Results, Yahoo Finance.
- ASML CEO Sees Slow Chip Recovery Extending ‘Well Into 2025’ – BNN Bloomberg, BNN Bloomberg.
- Chip stocks hard hit as ASML warns on global market recovery – DutchNews.nl, DutchNews.nl.
