: ASML outlook to be key as chip-equipment maker’s China sales eyed

by | Oct 17, 2023 | Stock Market

Investors will be closely eyeing the outlook for ASML Holding, the Dutch multinational that makes the machines used to manufacture semiconductors, as the tech giant faces worries ranging from sanctions on China to fears of a glut in demand for microchips. ASML’s U.S.-listed shares

have gained 11% this year, compared to the 38% rise for the broader PHLX semiconductor index

This negativity is the result of the combined threats of a glut in the market for semiconductors, caused by lower global spending on consumer goods, as well as the imposition of new restrictions on ASML’s exports of microchip manufacturing equipment to China.   In Its upcoming third quarter results, ASML is now expected to post sales worth €6.74 billion ($7.11 billion), according to data from 22 analysts compiled by FactSet. If realized, the sales estimates would mark a 16.5% increase compared to the third quarter of 2022.  Analysts polled by FactSet forecasted ASML will generate earnings per share of €4.62 in the third quarter of 2023, compared to €4.29 in the third quarter of 2022.   Analysts at Liberum explained that ASML’s share price could now be shifted by the company’s outlook for 2024, particularly if it assuages investors’ fears around the threat of slow demand for semiconductors on the Dutch firm’s business.  Liberum’s analysts said demand for ASML’s deep ultraviolet (DUV) tools is expected to remain strong due to continued demand from Chinese electric vehicle manufacturers. They noted sales of ASML’s more advanced extreme ultraviolet (EUV) are expected to be lower this year.  However, the Liberum analysts said demand for EUV machines could be on track to recover in 2024. “A global push toward technology upgrades to the 3nm wiring pattern could revive sales growth for EUV tools in 2024,” Liberum’s analysts explained. A positive outlook from ASML’s management could also counteract what Berenberg’s analysts described as “ …

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