The shares of Veldhoven-based ASML Holding, a manufacturer of chip-making equipment, declined 16 per cent after the company published its Q3 2024 results with a sharp decline in orders and disappointing sales forecast.
ASML’s performance in Q3 led to a steep sell-off of shares, resulting in the semiconductor firm losing €48.7B in market capitalisation in a single day, reports CNBC.
Notably, the company prematurely released its Q3 results on the website due to a ‘technical error’ for 30 minutes before being taken down.
“Due to a technical error, information relating to our Q3 2024 results was erroneously published earlier today on part of our website asml.com,” says the Dutch company in a statement.
At the time of writing this article, ASML Holding NV’s share stands at €635.
In addition to ASML, the shares of other chip companies, including Nvidia, Advanced Micro Devices, and Broadcom declined after the report.
ASML’s performance in Q3 2024
In the third quarter, ASML reported total net sales reaching €7.5B, a 50.8 per cent gross margin, and a net income of €2.1B.
The company’s quarterly net bookings in Q3 amounted to €2.6B, with €1.4B attributed to EUV. Notably, the company had expected an order inflow of around €5.4B.
In Q4 2024, ASML anticipates total net sales between €8.8B and €9.2B, with a gross margin of 49 per cent to 50 per cent.
Moreover, the Dutch company projects its 2024 total net sales to reach around €28B.
As for 2025, the company forecasts total net sales to fall within the range of €30B to €35B, with a gross margin spanning 51 per cent to 53 per cent.
“While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness. Regarding Logic, the competitive foundry dynamics have resulted in a slower ramp of new nodes at certain customers, leading to several fab pushouts and resulting changes in litho demand timing, in particular, EUV. In Memory, we see limited capacity additions, with the focus still on technology transitions supporting the HBM and DDR5 AI-related demand,” says ASML President and Chief Executive Officer Christophe Fouquet.
“Based on the recent market dynamics as mentioned above, we expect our 2025 total net sales to grow to a range between €30 billion and €35 billion, which is the lower half of the range that we provided at our 2022 Investor Day. We expect a gross margin between 51% and 53%, which is below the range we then provided, mainly related to the delayed timing of EUV demand,” adds Fouquet.
However, the Dutch company didn’t give a clear explanation of why its bookings fell so short of estimates, beyond a few delays in plant construction.
The company will hold a call with investors Wednesday, reports Bloomberg.
ASML’s BIC expansion
In June, the Eindhoven City Council approved the possible expansion of ASML on the Brainport Industries Campus (BIC).
As a result, studies will be conducted, and the urban design and cooperation agreement will be further developed.
These efforts are expected to be finalised by the end of the year.
This area, covering about 100 hectares, has the potential to accommodate approximately 20,000 ASML jobs.
The municipality of Eindhoven and ASML, in collaboration with partners, are working on proposals to address various social issues.
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