Dutch semiconductor giant ASML has released its fourth-quarter and full-year earnings for 2024, showing continued growth despite market turbulence.
Total net sales for 2024 reached €28.3 billion, surpassing the €27.6 billion reported in 2023. The surge in semiconductor demand, driven by advancements in artificial intelligence, contributed to this increase.
Net income for 2024 fell slightly to €7.6 billion, compared to €7.8 billion in 2023. Despite this, ASML’s share price jumped 10.45% on Wednesday morning, reflecting investor confidence.
Surge in Bookings and Future Sales Projections
ASML recorded a sharp rise in net bookings, reaching €7.1 billion in the fourth quarter of 2024, up from €2.6 billion in the previous quarter. The increase was largely driven by strong demand from Taiwan Semiconductor Manufacturing Company (TSMC).
Extreme ultraviolet lithography (EUV) bookings accounted for €3 billion in the fourth quarter. ASML remains the only company worldwide capable of producing EUV systems, which are essential for manufacturing advanced microchips.
Despite this quarterly growth, full-year net bookings for 2024 fell to €18.9 billion from €20 billion in 2023. ASML projects first-quarter 2025 net sales between €7.5 billion and €8 billion, with a gross margin of 52% to 53%. For the full year 2025, the company expects net sales between €30 billion and €35 billion, with a gross margin ranging from 51% to 53%.
CEO Christophe Fouquet stated that AI remains the primary growth driver for the semiconductor industry. He emphasized that shifting market dynamics create both risks and opportunities for ASML’s customers.
DeepSeek’s Emergence Raises Questions for the Industry
Chinese AI firm DeepSeek has disrupted the semiconductor and AI sectors with its latest chatbot release on January 20. The app has become the most downloaded free app on the US Apple Store, surpassing OpenAI’s offerings.
DeepSeek claims its AI models outperform US competitors in coding and mathematics while using fewer advanced chips and less memory. These efficiencies have raised concerns about the competitive landscape, particularly for US chipmakers like Nvidia, which suffered a historic $600 billion loss in market value on Monday.
Despite these concerns, ASML’s strong fourth-quarter bookings provide reassurance to investors. Analysts believe its solid order pipeline helps mitigate fears about China’s rapid AI advancements.
Cautious Optimism for ASML’s Future
Ben Barringer, a technology analyst at Quilter Cheviot, called ASML’s results “impressive,” noting that revenue exceeded forecasts by 2.5% and profits by 8%. He added that ASML’s projected 15% growth in 2025 highlights confidence in future demand.
However, sales in China dropped from 47% to 27% on a quarterly basis, aligning with expectations. This decline was offset by strong memory chip demand from South Korea and the US.
Investment director Russ Mould from AJ Bell warned that while ASML’s 2025 outlook appears solid, the long-term impact of DeepSeek remains uncertain. He suggested that if AI development becomes more efficient and cost-effective, demand for ASML’s high-end semiconductor tools could weaken in 2026 and beyond.
CEO Christophe Fouquet reaffirmed that AI remains the industry’s key growth driver. However, with declining demand for chips in smartphones, tablets, and PCs, analysts remain cautious about ASML’s long-term prospects.