ASML new bookings miss forecast, but China sales hold up By Reuters

By Toby Sterling and Foreign foreign exchange transactionsNathan Vifflin

AMSTERDAM (Reuters) -ASML, the largest supplier of equipment to computer chip makers, reported weaker than expected first-quarter new bookings on Wednesday, although sales to China held up despite U.S.-led restrictions on what it can export.

Shares in Europe's biggest tech firm, which had risen 34% this year, were down 6% in early trade.

ASML (AS:) kept its full-year financial forecasts unchanged, with sales seen flat from last year's 27.6 billion euros ($29.3 billion), although it is gearing up for strong growth in 2025.

Net income in the first quarter was 1.22 billion euros, down from 2.05 billion euros in the fourth quarter of 2023. Sales were 5.29 billion euros, down from 7.24 billion euros.

New bookings were 3.6 billion euros, well below the 5.4 billion euros foreseen by analysts polled by Reuters.

"Although disappointing we would not read too much into it as order intake is notoriously lumpy," said ING analyst Marc Hesselink.

Sales of ASML's lithography systems to customers in China made up a record 49% of the total in the first quarter, or around 2 billion euros, the company said in an investor presentation published alongside the earnings.

"Our outlook for the full year 2024 is unchanged, with the second half of the year expected to be stronger than the first half, in line with the industry's continued recovery from the downturn," outgoing CEO Peter Wennink said in a statement, describing 2024 as a "transition year".

Wennink, who is retiring, will be replaced by Christophe Fouquet at the company's annual meeting on April 24.

ASML dominates the market for lithography systems, machines that can cost hundreds millions of euros each and use light beams to help create microscopic circuitry.

It will benefit from new chip plants planned with support from governments in Taiwan, South Korea, Japan, China and the United States.

According to forecasts by industry group SEMI, China is adding the most chipmaking capacity in 2024, followed by Taiwan and South Korea.

U.S.-led export curbs aimed at undermining China's ability to make its own advanced chips have led Chinese chipmakers to focus on building older generations of chips, using equipment that does not fall under export control policies.

Han Dieperink, chief investment officer at investment firm Aureus, said he was not worried by the quarterly numbers, given the company's long-term growth outlook.

He said ASML would benefit from growing demand for AI chip capacity and a related recovery in the memory chip market.

"You can't get around ASML. And that gives us also some sort of defensive qualities," he said. Aureus has 5-6% of its 2 billion euro equity portfolio in ASML.

($1 = 0.9414 euros)

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