(Bloomberg) — ASML Holding NV (ASML), the Dutch maker of advanced chip-making machines critical to global supply chains, reaffirmed its long-term revenue prospects as it bets on an artificial intelligence-driven boom in the demand for semiconductors.
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The Dutch company forecast that sales in 2030 will range from €44 billion ($46 billion) to €60 billion, in line with its previous forecast, according to a statement issued as part of the company’s investor day on Thursday.
The outlook is aimed at reassuring investors after the company’s order intake significantly missed analysts’ expectations in the third quarter, leading to a sell-off in the company’s shares and those of other chip-related companies. Chipmakers such as Nvidia Corp. have experienced a surge in demand for their AI chips. But sales to other key buyers, including automakers and mobile phone and PC makers, are still in a prolonged slump.
ASML expects that growing demand for AI will help boost global chip sales to over $1 trillion by 2030, which they say represents an annual growth rate in the semiconductor market of around 9%.
ASML is the only company in the world that makes the kind of lithography machines that allow semiconductor companies in turn to produce the advanced chips that power everything from Apple Inc.’s smartphones. to Nvidia’s AI accelerators. As such, it is often seen as a bellwether for the broader industry and an early indicator of global semiconductor demand.
The production of more advanced AI chips will mean that more of ASML’s advanced extreme ultraviolet lithography machines will be needed by semiconductor manufacturers. The company expects double-digit annual growth in EUV spending for both advanced logic and DRAM through 2030.
The company expects a gross margin of approximately 56% to 60% in 2030.
ASML shares rose as much as 4.4% in Amsterdam on Thursday. This year they are down 5.9%.
While ASML in October cut its sales outlook for next year, it said Thursday it will maintain its spending priorities. ASML currently has a pending buyback of €12 billion through 2025, of which only 14% has been bought back.
“We reaffirm 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 repurchases,” ASML Chief Financial Officer Roger Dassen said in the statement.
Also weighing on ASML’s prospects is the US government’s continued efforts to limit China’s rise in the semiconductor sector, through repeated rounds of export controls targeting sales of advanced artificial intelligence chips and chip-making equipment . The Dutch government is struggling to find a middle ground between its American ally and ASML’s largest market.
Due to pressure from the US, ASML was never able to sell its EUV machines to the Asian country and was banned from shipping its second most advanced tooling from this year onwards.
China accounted for €2.79 billion in revenue in the third quarter, almost half of ASML’s total. The company expects Chinese sales to account for about 20% of total sales next year. US pressure on ASML to further restrict sales of semiconductor technology to Beijing is likely to increase, CEO Christophe Fouquet said in an interview with Bloomberg in October.
Fouquet, who took over at ASML in April, told investors in October that he expects a slow recovery in the chip market to continue “well into 2025.” Still, next year and 2026 will be growth years for the sector and ASML in general, he said.
(Updates with charts and details from the statement)
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