By Nathan Vifflin and Toby Sterling
Oct 14 (Reuters) – ASML said on Wednesday customers were already looking to place orders for its advanced chipmaking tools for 2029 and 2030, easing concerns that the artificial intelligence investment boom was losing momentum.
The upbeat outlook from the Dutch company, the biggest maker of tools used to make AI chips and advanced semiconductors, signals that chipmakers are continuing to expand well into the future, easing concerns among investors that the surge in AI-related spending could be nearing a peak.
Demand for the company’s machines has been fuelled by the AI boom, with customers including TSMC – which manufactures chips for Nvidia – as well as Samsung, Intel and others investing heavily to increase chip production.
Shares in ASML, Europe’s largest firm by market valuation at some €586 billion, were up 2% on Wednesday, having risen almost 70% so far this year.
“There were concerns that the AI trade was running out of steam,” said Gordon Kerr, European macro strategist at KBRA, adding ASML’s results showed “demand for chips remains strong, and infrastructure spending is likely to continue well into 2027”.
The Dutch company is now looking to boost capacity further, it said. In July ASML said it would increase capacity in 2027 by 30% and again by 30% in 2028, but CEO Christophe Fouquet said on Wednesday it was clear that would not be enough.
Fouquet said the company was now seeing “a lot of order intake for 2028. But also some strong interest to already place orders for 2029 and sometimes even 2030.”
SALES OUTLOOK BOOST
The company’s comments came as it reported third-quarter net profit of €4.96 billion on net sales of €11.7 billion and forecast fourth-quarter sales of €14.2 billion to €15.2 billion ($15.9 billion to $17 billion). That boosted its full-year sales outlook from at least €43 billion to €44-45 billion.
Nick Rossolillo of Chip Stock Investor, which holds shares in the company, said he was satisfied with the pace at which ASML is adding capacity “as long as they do gradually expand to take care of customer demand”.
ASML’s customers also include SK Hynix, Micron and newcomer Elon Musk and his TeraFab, all of which also have expansion plans. ASML is “still kicking the tyres on the exact size of that (TeraFab) opportunity,” CFO Roger Dassen said on a call with reporters.
RACING TO EXPAND CAPACITY
ASML broke ground last month on a major expansion in Eindhoven, Netherlands, but it will need to look at other ways to address capacity before the first phase is completed in 2029.
Dassen said ASML will also address the shortage by upgrading existing tools, and selling new versions of its machines with higher throughput.
He also said the company will be increasing prices starting in 2027, with the full effect visible from 2028.
“Durable growth will continue into 2027 and 2028”, said Ben Barringer, head of technology research at Quilter Cheviot. “…however, the market will begin asking the question of whether or not there will be any sign of a downturn from 2029 and what impact that has for ASML.”
($1 = 0.8923 euros)
(Reporting by Toby Sterling in Amsterdam, Nathan Vifflin in Gdansk, Editing by Adam Jourdan, Milla Nissi-Prussak, Stephen Coates and Louise Heavens)
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