ASML Holding NV ASML stock saw a significant uptick on Wednesday, driven by reports that the company plans to deliver its latest high-NA extreme ultraviolet (EUV) chipmaking machines to Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics Co in 2024. This development has sparked investor enthusiasm, reflecting confidence in ASML’s future growth and technological advancements.
Deliveries to Major Clients
By the end of this year, ASML’s groundbreaking high-NA EUV machines will be in the hands of three major clients: TSMC, Samsung, and Intel Corp. Intel has already received its first shipment in December for its Oregon factory, as reported by Bloomberg citing ASML CFO Roger Dassen. These advanced machines are capable of imprinting semiconductor lines just 8 nanometers thick, a critical capability for supporting AI applications and cutting-edge electronics.
Despite concerns from TSMC about the high cost of approximately $381 million (350 million euros) per machine, demand remains robust. These high-NA EUV machines are essential for the next generation of semiconductor manufacturing, enabling more powerful and efficient chips. Analysts from Jefferies predict that ASML’s orders will average $6.21 billion (5.7 billion euros) per quarter for the remainder of the year, potentially driving sales to 40 billion euros by 2025. They also anticipate that TSMC will utilize high-NA technology at the A14 node in 2028.
Market Reaction and Future Prospects for ASML Stock
The news of these deliveries and the high demand for ASML’s advanced technology have positively impacted ASML stock, which has gained 35% over the past 12 months. On Wednesday, ASML shares traded higher by 6.58%, reaching $1,013.41. Investors looking to gain exposure to ASML can do so through the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX).
ASML anticipates a stronger recovery in demand in the second half of the fiscal year, despite facing potential challenges. The U.S. chip embargo is expected to impact up to 15% of its sales to China in 2024. Additionally, TSMC’s recent decision to increase the prices of its chip production services caused a dip in the broader sector on Tuesday. However, ASML’s robust technological advancements and strategic deliveries to key clients highlight the company’s resilience and growth potential.
ASML’s stock surge reflects the market’s confidence in the company’s ability to deliver state-of-the-art chipmaking machines that meet the demands of major semiconductor manufacturers like TSMC, Samsung, and Intel. With the semiconductor industry rapidly evolving and the demand for advanced chips increasing, ASML is well-positioned to capitalize on these trends. As the company continues to innovate and expand its capabilities, investors remain optimistic about ASML’s future prospects and its role in the semiconductor industry’s growth trajectory.
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