ASML will profit from main funding plans unveiled by key prospects TSMC, Samsung and Intel in latest weeks, and the main focus can be on how a lot tools it will possibly ship this 12 months, in addition to any plans to develop capability.
The chip scarcity comes as carmakers, which shut vegetation in the course of the COVID-19 pandemic final 12 months, ramp up manufacturing, and as shoppers replenish on laptops, gaming consoles and different digital merchandise.
Based mostly within the southern Dutch city of Veldhoven, ASML is the dominant maker of lithography methods, huge machines that focus beams of power to assist map out the tiny circuitry of laptop chips and value as much as 200 million euros ($240 million) every.
Analysts count on the corporate to report first quarter pre-tax revenue of 1.25 billion euros, on income of 4.02 billion euros, in line with Refinitiv knowledge.
ASML shares are up 35% up to now this 12 months to 522.20 euros, giving it a market capitalisation of 218 billion euros and making the little identified firm certainly one of Europe’s largest by market worth.
Additionally key to the outlook can be its exports to China, which made up 17% p.c of enterprise in 2020 – the corporate’s third market behind Taiwan and South Korea.
Lithography machines are thought of “twin use” know-how with potential navy significance and, underneath strain from america, the Dutch authorities has not granted a licence for ASML to ship any of its newest-generation machines to China.
ASML CEO Peter Wennink in January mentioned the corporate ought to see double-digit gross sales progress in 2021 — and extra if no further export restrictions are imposed.
Whereas ASML has continued to promote barely older machines in China, latest steps by america might sluggish or halt the commerce.
In December the U.S. Commerce division blacklisted key Chinese language chipmaker SMIC, an ASML buyer, whereas a U.S. nationwide safety fee in March really helpful a coverage of “presumptive denial” along with allies, to additional limit export licenses for superior chip-making instruments to China.