AMSTERDAM (Reuters) – ASML Holding NV, one of the biggest suppliers to semiconductor companies, is likely to show its order books are full to bursting because of a global chip shortage when it reports first quarter earnings on Wednesday.
ASML will benefit from major investment plans unveiled by key customers TSMC, Samsung and Intel in recent weeks, and the focus will be on how much equipment it can deliver this year, as well as any plans to expand capacity.
The chip shortage comes as carmakers, which shut plants during the COVID-19 pandemic last year, ramp up production, and as consumers stock up on laptops, gaming consoles and other electronic products.
Based in the southern Dutch town of Veldhoven, ASML is the dominant maker of lithography systems, enormous machines that focus beams of energy to help map out the tiny circuitry of computer chips and cost up to 200 million euros ($240 million) each.
Also key to the outlook will be its exports to China, which made up 17% percent of business in 2020 – the company’s third market behind Taiwan and South Korea.
Lithography machines are considered “dual use” technology with potential military importance and, under pressure from the United States, the Dutch government has not granted a licence for ASML to ship any of its newest-generation machines to China.
ASML CEO Peter Wennink in January said the company should see double-digit sales growth in 2021 — and more if no additional export restrictions are imposed.
While ASML has continued to sell slightly older machines in China, recent steps by the United States could slow or halt the trade.
In December the U.S. Commerce department blacklisted key Chinese chipmaker SMIC, an ASML customer, while a U.S. national security commission in March recommended a policy of “presumptive denial” together with allies, to further restrict export licenses for advanced chip-making tools to China.
(Reporting by Toby Sterling; Editing by Kirsten Donovan)