News ASML loses $75.7 billion market cap from updated sales projections, likely due to lower demand from China and delayed Intel fab

[Admin]

ASML lowers its 2025 outlook because of normalization of demand from China, Intel's delay of European fabs, and overall spending in the semiconductor sector.

ASML loses $75.7 billion market cap from updated sales projections, likely due to lower demand from China and delayed Intel fab : Read more

 

[thestryker]

I imagine the Intel delays in Ohio are more of an issue than the European ones as there's no guarantee how much EUV as opposed to High-NA would be installed in Germany. Even though the newest EUV machines process wafers at a higher rate than existing Samsung and TSMC may also not be upgrading as much. I know TSMC currently has a packaging bottleneck and Samsung has a fab utilization problem.

No delays on the High-NA side which is probably why news of Intel's second installation dropped yesterday to give some positivity to ASML's financials. At the same time Intel seems to be the only early buy in which can probably sustain through 2025 due to low manufacturing rate but even assuming the Germany fabs go ahead as scheduled and are to be filled with High-NA that's a big gap. Samsung given its fab issues likely wouldn't be buying much beyond development until things stabilize some and TSMC seems content waiting for beyond 1.6.

I do find it interesting that ASML is effectively being punished for government policy decisions and customer delays only now that they've put repercussions on the book even though they've been known about for many months and were guaranteed to have adverse effects.

 

[rluker5]

TSMC does have 9x the market cap as Intel and holds a near monopoly position on advanced node chip fabrication so maybe their lack of orders may have something to do with the reduced outlook for a company that makes machines to do this.
But yeah, blame Intel because it sounds good.

 

[umeng2002_2]

They lost fake value.

 

[thisisaname]

If that lose was a country that it would be about the 72th in terms of GDP.

 

[acadia11]

guess they were banking on Altman’s $7 trillion AI play on the books. Aren’t their exports being limited to China currently, understand the Dutch government took over their controls?

 

[Mama Changa]

They lost fake value.

Yeah, I love these articles pumping up values of companies.

I amazed Huang doesn't get Nvidia into the fab business rather than rely on TSMC. He could afford 20-30 ASML high NA EUV machines, that's only $12 billion at most and another $10-15 billion for the fab factory. Peanuts to them.

 

[watzupken]

Yeah, I love these articles pumping up values of companies.

I amazed Huang doesn't get Nvidia into the fab business rather than rely on TSMC. He could afford 20-30 ASML high NA EUV machines, that's only $12 billion at most and another $10-15 billion for the fab factory. Peanuts to them.

Personally, I think we may all under-estimate the challenges of running a fab. Sure there are advantages to having your own fab, but as you can tell from the struggles that Intel, Samsung and Global Foundry went/ are still going through, it can go both ways. The startup cost may look reasonable, but the ongoing maintenance and R&D cost is not cheap.

In any case, I was not surprised by the news and guidance. I feel a large part of ASML's revenue previously comes from Chinese companies who are trying to hoard these equipment before the sanction axe drops. After that, ASML are not even allowed to service these equipment sold to China resulting in further revenue lost. I feel Intel's contribution to ASML may not be as great as to significantly affect their revenue, considering that their foundry business is not exactly in high demand, and I don't think they are that financially sound to purchase a lot of expensive equipment only to leave them mostly idle.

 

[DavidLejdar]

More than $420 billion market cap losses across several semiconductor companies. Some of them have recovered since a bit though. And TSMC even hit a record high this morning.

It shows why diversification in stock can be quite important. Other strategies possible as well, such as just waiting for dips like these... Personally, I mostly just have ETF saving plans, for long term, like 10+ years. So even if e.g. ASML will take a year to recover, I'll be getting ETF shares (with ASML in it) for a bit cheaper during that time. Still risk involved, of course.

 

[ottonis]

"ASML CFO Roger Dassen indicated that this shift is a return to more historically normal levels."

So, that's the essence of this story. After a transient surge in demand for tools, mainly driven by China who wanted to pile up before stricter sanctions set in, demand is actually just normalizing to usual levels.
Similar story with PC/laptop sales figures: They spiked during the fist stages of the pandemy because everyone went homeoffice, and then they went back to normal.

 

[redgarl]

Obviously, China was overestimating their ability to fab semiconductors and to make competitive home made chips.

Seems to follow the news about just using Nvidia GPU for training.

 

[umeng2002_2]

Honestly, if cutting edge lithography was easy, everyone would just but an ASML machine and print money. People seem to think of the stock market as something other than speculation-driven Ebay. It's just Ebay for stocks. Like not meeting "estimates." Oh no, the company made 2 billion dollars in profit instead of 3 billion dollars in profit. Let me jump off the roof. It's Over.

 

[ytan86]

The headline seems to have left out the obvious culprit causing lower demand from China. 😸