Contrary to the recent negative outlook of equipment manufacturers due to sluggish demand for semiconductors, ASML, led by EUV, is showing a solid performance trend by flaunting its near-monopoly technological edge.

Dutch semiconductor equipment company ASML announced its third-quarter results. It recorded net sales of 5.778 billion euros (about 8.1 trillion won) and net income of 1.7 billion euros (about 2.3 trillion won), achieving a gross profit margin of 51.8%, exceeding expectations.

It appears that EUV sales performance contributed significantly to these achievements. Sales of EUV equipment, including High-NA systems, in the third quarter amounted to 3.8 billion euros (approximately 5.3 trillion won), accounting for 65% of total sales.

Net bookings increased by 5 million euros (approximately 7 billion won) from the previous quarter to 8.92 billion euros (approximately 12.5 trillion won), recording the highest quarterly bookings ever, indicating a solid demand outlook for EUV equipment, which is essential for advanced semiconductor processes, despite the semiconductor downcycle.

“Market uncertainty remains due to a number of global macroeconomic concerns, including inflation, consumer confidence and recession risks,” said Peter Wennink, ASML’s CEO. “While we are seeing shifts in demand across markets, overall demand for ASML systems remains strong.”

ASML has been focusing on developing countermeasures to the US export restrictions. CEO Peter Wennink said, “We are complying with the new US export restrictions and are continuously reviewing them,” adding, “This measure does not change the regulations applicable to ASML’s lithography equipment shipped from the Netherlands and we expect the direct impact on our 2023 shipment plans to be limited.”

As the conflict between the US and China over semiconductor hegemony intensifies, supply chain responsiveness is emerging as an important capability for maintaining and improving productivity due to the disruption of the global supply chain. The ASML Board of Directors announced on the 19th that it intends to appoint Wayne Allan as Executive Vice President and Chief Strategic Sourcing Officer (CSSPO) and Executive Director. The matter will be announced at the shareholders’ meeting in April 2023, it added.

Wayne Allen, who joined ASML in 2018 as Vice President of Customer Support, is expected to be in charge of the procurement and supply chain organization. He is an expert with diverse experience in engineering, planning, and manufacturing at Micron and others, and is believed to have been recognized for his supply chain capabilities, having served as the head of global production operations and supply chain organization.

“The appointment of Wayne Allen as Executive Director reflects the critical importance of our procurement and supply chain organization to ASML’s ability to execute our strategy,” said Peter Wennink, ASML’s Chief Executive Officer. “We are confident that Allen’s appointment will position ASML to continue to build strong, effective strategic relationships with our suppliers while addressing the challenges associated with expanding our production capacity.”

This is interpreted as an expansion strategy to increase the productivity of EUV equipment required for the latest semiconductor processes and to meet the expectations of semiconductor manufacturers.

Do Hyun-woo, a researcher at NH Investment & Securities, explained, “ASML exposure equipment supply is insufficient compared to demand, and the backlog is so severe that it takes nearly two years from order to delivery.” He added, “Unlike other equipment for which some orders are being canceled, there have been no cancellations yet for EUV-related equipment.”

Researcher Do said, “Compared to the previous quarter, the proportion of EUV and memory semiconductor equipment increased, which is the result of the move to apply EUV to DRAM following logic.” As not only Samsung Electronics but also SK Hynix and Micron have announced plans to apply EUV to some layers in processes below 14nm, the market is paying close attention to whether or not they will be able to secure related equipment.

Meanwhile, ASML forecasted its 2022 earnings at 21.1 billion euros (approximately 29.55 trillion won), including its sales forecast for the fourth quarter of this year.