ASML, the largest chip equipment manufacturer in Europe, said Washington’s latest export controls against China have limited impact on the company’s 2023 shipping plan.
“The immediate implications for us are quite limited,” Roger Dassen, ASML’s chief financial officer, said Wednesday. “First of all, as you know, we are a European company. So there isn’t a lot of American technology in our tools.”
The Dutch chip equipment supplier produces a variety of manufacturing tools and is the world’s only company capable of making extreme ultraviolet lithography (EUV) machines, essential equipment to produce advanced semiconductors.
Taiwan Semiconductor Manufacturing Co, Intel and Samsung all rely on ASML’s supplies and services for the EUV tools to build advanced chips.
Dassen said ASML will continue to ship non-EUV equipment from Europe to China as it reviews the latest US export controls. He promised the company would “do everything” to follow Washington’s guidelines.
This is the first time ASML has commented on the impact of the new export controls, which limit the ability of companies to supply services and products with US technologies to the Chinese semiconductor industry without a license.
ASML, with a market cap of approximately $170 billion, has been caught up in the technology war between the US and China with the planned shipment of an EUV machine to Chinese contract chip maker Semiconductor Manufacturing International Corp. Delivery has been held up since late 2019 due to increasing political pressure from Washington.
Dassen said that while ASML could ship non-EUV machines to China, it would have an indirect impact on equipment demand. He predicted that Chinese customers may be forced to reduce their orders as the new controls prevent them from getting other equipment from US chip equipment suppliers.
ASML’s prepared comments came as it reported stronger-than-expected earnings results for the last quarter. It achieved net sales of 5.8 billion euros with a gross margin of 51.8 percent for the last quarter, above previous expectations of 5.1 billion to 5.4 billion euros and a gross margin between 49 and 50 percent.
ASML expects full-year revenue to grow 13 percent to €21.1 billion with a gross margin of nearly 50 percent.
ASML said overall demand for the company’s equipment and systems remained strong and capacity expansion was “the right choice” despite market uncertainties, including inflation, deteriorating consumer confidence and the risk of an economic recession.
TSMC, the world’s largest contract chip maker and an ASML customer, last week cut its annual capital expenditures by about 10 percent to $36 billion this year due to a slowdown in demand for smartphones and PCs.
“Obviously there is uncertainty in the near term, but the secular trends are there,” Dassen said, adding that pressure from economies to bring semiconductor manufacturing onshore is also supporting demand.
“I think that creates a situation where we see the lion’s share of customers really still pushing us to get the tools sooner rather than later.”