ASML20250417

ASML Conference Call Summary Company Overview - Company: ASML - Industry: Semiconductor Equipment Manufacturing Key Points and Arguments Financial Performance - ASML's revenue for Q1 2025 reached €7.74 billion, a 46% year-over-year increase, primarily due to a low base in 2024 [2] - Despite seasonal factors typically leading to lower revenue in the first half, overall revenue met market expectations [2] - New orders significantly declined, down 44% compared to Q4 2024, with actual new orders below €4 billion, falling short of the €5 billion market expectation [2][3] Order Trends - New order decline attributed to seasonal fluctuations and weakened customer demand, particularly from Intel and Samsung, with notable reductions in capital expenditures [3] - EUV product revenue continues to rise, with Low NA EUV transitioning from the 3,600 model to the 3,800 model, resulting in an increase in average selling price (ASP) [1][5] - EUV remains the only segment showing quarter-over-quarter growth [5] Customer and Regional Insights - Logic customers' revenue share decreased to 58%, while storage customers accounted for 42% [6] - Korean region revenue grew 29% quarter-over-quarter, with EUV revenue share rising to 40%, driven by clients like Hanilcmt, Samsung, and SK Hynix [6] - Chinese market revenue share stabilized between 24%-27%, with expectations to exceed 25% for the year [6][12] Future Outlook - ASML maintains an optimistic outlook for 2025 and 2026, expecting continued growth despite the first quarter's lower-than-expected new orders [7] - Anticipated EUV lithography machine orders for 2025 are around 50 units, contingent on capital expenditure plans from Intel, Samsung, and TSMC [8] - High-NA EUV technology is expected to enter mass production around 2027-2028 [9] Product Developments - The 3,800 model EUV is set to become the main product, with a 30% increase in WPH (wafers per hour) compared to the 3,600 model [9] - ASML plans to increase Low NA EUV capacity to 90 units by 2025-2026 and High-NA EUV capacity to 20 units by 2027-2028 [10] Margin and Revenue Guidance - Uncertainty regarding U.S. tariff policies is impacting ASML's gross margin, with Q2 gross margin expected to range between 50%-53% [11] - Full-year revenue guidance is set at €7.2 billion to €7.71 billion, reflecting a 19.3% year-over-year increase but a 3.3% quarter-over-quarter decline [11] Market Dynamics - The Chinese market is expected to contribute over 25% to the backlog orders, with a recovery in demand for mature equipment [12] - Overall, the company does not foresee significant upward adjustments to annual performance expectations due to already adjusted orders [13] Industry Context - Global WFE (Wafer Fabrication Equipment) expectations for 2025 have been revised downwards, with a general consensus of low single-digit declines, although some companies still predict slight growth [14] - ASML's revenue from the Chinese market is projected to decrease from $9.5 billion to €8.2 billion, reflecting a double-digit decline [15] New Product and Technology Insights - The introduction of the 3,800 model EUV is expected to enhance EUV ICP (Integrated Circuit Production) and has a higher gross margin than the overall company margin [16] - The company is focused on improving product performance rather than reducing prices in the short term, with significant price adjustments contingent on performance enhancements [16] Industry Monitoring - ASML will continue to monitor performance reports from leading overseas companies, such as Lam Research and TSMC, for further insights [18]