Dutch Chipmaker Sees Strong Demand for EUV Machines as AI Investments Soar
ASML Holding NV (ASML) experienced its biggest stock surge since 2020 after reporting fourth-quarter orders that more than doubled analysts’ expectations. The Dutch semiconductor equipment giant booked €7.09 billion ($7.4 billion) in net orders, far surpassing the estimated €3.53 billion, as the artificial intelligence (AI) boom fuels demand for advanced chipmaking machines.
The company is benefiting from a surge in AI-driven investments, with tech giants ramping up spending on data centers and semiconductor infrastructure. Meta Platforms Inc. (META) recently announced plans to increase AI-related capital expenditures to as much as $65 billion in 2024. Additionally, OpenAI, SoftBank Group Corp., and Oracle Corp. (ORCL) launched a $100 billion joint venture, Stargate, aimed at building AI infrastructure across the U.S.
AI Drives Semiconductor Demand
“AI is the clear driver,” ASML CEO Christophe Fouquet emphasized in a video discussing the results. “We truly believe that AI is going to bring even more opportunity to this semiconductor industry.”
The strong earnings report sent ASML’s stock soaring as much as 12% to €722.10 in Amsterdam, marking its largest intraday gain since March 2020. The rally helped the stock recover from earlier losses tied to concerns that Chinese startup DeepSeek’s AI model could rival Western alternatives at a significantly lower cost.
China’s Role in ASML’s Growth
While ASML has never been allowed to sell its most advanced extreme ultraviolet lithography (EUV) machines to China due to U.S. export restrictions, demand from Chinese chipmakers for older semiconductor equipment has been robust. In the fourth quarter, China accounted for €1.92 billion in sales, making up 27% of ASML’s total revenue. However, ASML expects China’s share of its revenue to decline to around 20% in 2025.
DeepSeek’s recent AI advancements suggest Chinese engineers are developing ways to innovate despite U.S.-led restrictions. This raises questions about the long-term effectiveness of semiconductor trade curbs. However, ASML remains optimistic about the broader market. “Anyone that lowers cost is good news for ASML,” Fouquet stated. “Lower cost means AI can be used in more applications, and more applications mean more chips.”
Outlook and Strategic Adjustments
Despite the strong demand, ASML announced that after 2025, it will no longer report quarterly order bookings due to their unpredictable nature. Instead, it will disclose its total backlog on an annual basis. The company reaffirmed its 2025 net sales outlook of €30 billion to €35 billion and increased its annual dividend by 5% to €6.40 per share.
With AI investments soaring and chipmakers like Taiwan Semiconductor Manufacturing Co. planning to boost capital expenditures, ASML remains well-positioned to capitalize on the next wave of semiconductor growth.
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