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Can't the lithography machine sell?
On April 17, the share price of global lithography giant ASML (ASML) fell sharply as the newly disclosed first-quarter orders were well below market expectations.

During the night trading hours of U.S. stocks, Asmai plunged more than 11% at one point; in the European market on April 17, Asmai shares fell more than 6% at one point. Nvidia was also dragged down, with the stock moving from up 0.8 per cent to down nearly 1 per cent in overnight trading in the US.
Some analysts said that Asmai's latest financial results are not the figures that many investors hoped or expected. The decline is larger than expected, which may be an early warning sign of concern.
At present, Asmari's market value is 385.5 billion US dollars, equivalent to about 2.74 trillion yuan.
Asmari orders drop
Today, Asmai, Europe's most valuable technology company and the world's leading lithography company, released its first-quarter 2024 results. Data show that in the first quarter, the company's new orders amounted to 3.61 billion euros (including 0.656 billion euros of EUV orders), far below market expectations of 5.1 billion euros. Orders in the first quarter of this year fell by nearly 2/3 compared with a record 9.19 billion euros in the fourth quarter of 2023.
After the disclosure of the above data, in the European market, Asmai shares once plunged down more than 6%, now down more than 4%. In the U.S. stock market, Asmarl's share price fell more than 11% in night trading, and the decline has now narrowed to 5%. Nvidia was also dragged down, with the stock diving from up 0.8 per cent to down nearly 1 per cent during the night trading session of US stocks.
Specifically, in the first quarter, Asmarl's sales were 5.29 billion euros, down 22% year-on-year and 27% month-on-month, compared with the average sales expected by analysts of 5.39 billion euros; net profit was 1.224 billion euros, down 40% month-on-month, and the market expected 1.07 billion euros. Asmarl expects second-quarter sales of 5.7 billion -6.2 billion euros, below market expectations of 6.46 billion euros.
According to the financial report, Asmai sold 66 new lithography systems and 4 second-hand lithography systems in the first quarter, down 41.59 percent and 63.64 percent from the previous quarter, respectively, compared with 113 and 11 in the previous quarter. Earlier this year, Asmai admitted that some mainstream lithography machine deliveries have encountered problems, and shipments to China are expected to be affected by 10% to 15%.
On April 17, when talking about product orders, Roger Dassen, chief financial officer of Asmari, said, "I believe everyone has found that the situation of new orders is usually unstable. At Investor Day 2022, we forecast net sales in the range of € 30 billion to € 40 billion in 2025. In order to achieve the median value of this target, which is 35 billion euros, in view of the current undelivered orders, in the next three quarters, if we receive more than 4 billion euros of new orders in each quarter, we can reach the median value of the net sales target in early 2025." Roger Dassen said that the industry will see a recovery in 2024, and the company is preparing for a stronger year in 2025.
Asmai CEO Peter Wennink said in a statement that the outlook for this year's full-year results remains unchanged, and the situation in the second half of the year is expected to be better than the first half, which is in line with the industry's continued recovery from the downturn. Peter Wennink pointed out that 2024 is expected to be a transition year, with continued investment in capacity and new technologies to prepare for the shift in the industry cycle.
It wants to "run away from home"
According to public information, Asmai, headquartered in the Netherlands, is the world's largest manufacturer of lithography machines, accounting for up to 80% of the market share of high-end lithography machines. The EUV lithography equipment required by the world's most advanced process chips comes from Asmari. Last year, weak demand for consumer electronics such as smartphones and laptops led to sluggish performance by chipmakers that produce semiconductors, which eventually passed on to Asmari, where demand for the company's equipment weakened significantly.
At present, Asmai almost monopolizes the global market share of lithography machines and holds the lifeblood of manufacturing advanced chips. Recently, Asmai intends to move its headquarters out of the Netherlands, causing global concern.
In March this year, some media reported that Asmai had made an intention to the Dutch government to expand or relocate elsewhere, with France as one of the options. It is reported that the increasingly poor business environment in the Netherlands is the main reason. On the one hand, due to the long-term hollowing out of industry, the Netherlands, like many Western developed countries, has continued to decline in infrastructure construction capacity and maintenance levels. The highways, housing, and power grids in the Eindhoven area are in a state of disrepair for a long time. Operating has increased a lot of costs.
On the other hand, the political environment in the Netherlands continues to be volatile. Although the Netherlands is one of the European countries with the strictest immigration policies, the number of immigrants has increased significantly in recent years, leading to the rise of populism and conservatism. In the 2023 general election, the Dutch far-right Liberal Party won a big victory. The leader of the party, Wilders, known as the "Dutch Trump", publicly announced that if he is in power, an important policy is to curb immigration, including measures to cancel Corporate tax breaks for skilled immigrants.
The news that Asmai intended to "flee" to other countries worried the Dutch government. In order to retain Asmai to continue to develop in the Netherlands, the Dutch government has set up a special working group code-named "Beethoven Plan" to take charge of this work. The working group is personally headed by the country's Prime Minister Mark Rutte.
A few days ago, the Dutch government announced that in order to ensure that Asmai does not move its business to other countries, the Dutch government will spend 2.5 billion euros (about 19.5 billion yuan) to retain Asmai.
According to the plan, the funds will be used in the next few years to improve infrastructure such as housing, education, transportation and power grid in Eindhoven, where Asma is headquartered. In addition, the Dutch government said in a statement that they will also take action to reduce the tax burden of enterprises.
Asmai welcomed the Dutch government's plan. However, Asmai responded in an email that the decision they need to make is not whether to stay, but where they will develop.
Asmai was born in 1984 in the Dutch town of Eindhoven, has been established for 40 years. Currently, ASML has 42000 employees worldwide, more than half of whom work in the Netherlands. For the full year 2023, Asmarl's net sales reached € 27.6 billion, up 23.2 per cent year-on-year, with gross margin of 51.3 per cent, up 0.8 percentage points year-on-year, and net profit of € 7.8 billion, up 28.3 per cent year-on-year. The total amount of undelivered orders amounted to € 39 billion. Asmari's record orders were mainly due to strong demand in the Chinese market.