ASML Q2 Earnings Call: AI and storage are currently the hottest, with a target revenue doubling by 2030

Author: Zhang Yifan

Editor: Shen Siqi

Source: Hard AI

On July 17th, ASML released its financial report, with both revenue and profit exceeding expectations. During the evening conference call, updates were provided on the sources of growth that investors are concerned about, as well as the situation of High-NA EUV.

1. Both Q2 revenue and profit exceeded expectations, mainly due to the strong demand for AI. It is expected that this strong demand will continue until 2026.

2. Revenue is expected to reach 30-40 billion euros in 2025 and 44-60 billion euros in 2030. This represents a growth of 10%-45% and 60%-118% respectively compared to 2023.

3. There are sufficient orders for High-NA currently, and it is expected that the first confirmation of High-NA EUV revenue will be made in the second half of 2024.

4. The company reiterated its "600 DUV and 90 EUV" capacity plan.

1. Revenue and Profit Exceeded Expectations

On July 17th, ASML released the financial report for 2024Q2, showing that both revenue and profit exceeded expectations.

During the evening conference call, the company mentioned that the main reason for the growth still comes from the strong demand for AI, and it is expected that this strong demand will continue until 2026.

2. Revenue Guidance

In terms of guidance, the company predicts Q3 revenue to be 6.7-7.3 billion euros (consensus expectation is 7.532 billion euros), with a gross margin range of 50%-51%. It is expected that the full-year revenue in 2024 will be close to that of 2023, with better performance in the second half of the year. Additionally, the company forecasts that the logic business in 2024 will be lower than that of 2023, while the storage business will be higher.

Looking further ahead, the company maintains its target of 30-40 billion euros in 2025 and 44-60 billion euros in 2030.

Especially in 2025, benefiting from energy transition, electrification, and the AI cycle recovery, the company pointed out that it will experience strong growth.

3. Latest Progress on High-NA EUV

Regarding High-NA EUV, the company revealed that it will confirm High-NA EUV revenue for the first time in the second half of 2024.

Currently, ASML's first High-NA EUV machine has been verified at the customer side, and the second machine is being assembled at the customer side. Customers are actively testing High-NA EUV, and the data performance is good, with imports expected in 2025 and 2026 Overall, customers have shown a high interest in the High-NA lithography machine. The company stated that there are sufficient orders for High-NA currently, and ASML will start delivering the equipment to all customers who have placed orders. Additionally, ASML is assisting customers in testing and obtaining data before the equipment installation is completed. This data provides valuable information to customers and helps them adjust their plans.

4. Production Capacity

Regarding production capacity, the company is working towards achieving the goal of "600 DUV and 90 EUV" units.

By the end of 2022, the company set forth a production capacity plan of "600 DUV and 90 EUV" units. Over the following year, the shipment volume of DUV units gradually increased. During this conference call, the company reiterated its efforts to realize this plan and mentioned driving the production capacity of High-NA EUV.

In terms of future prospects, ASML highlighted three growth points:

1. In the DRAM sector, revenue is expected to continue growing due to the shift in technology nodes, and this trend is projected to persist until 2026;

2. All customers will eventually use EUV in production (current shipment volume accounts for only 12%), albeit at different adoption rates;

3. High-NA EUV will be introduced in 2025 and 2026;

Lastly, from a market perspective, although ASML's revenue and profits for 2024Q2 exceeded expectations, the stock fell by 13% during trading hours. The main reason cited was foreign media reports suggesting that the Biden administration may continue to strengthen control over semiconductor equipment companies such as ASML and Tokyo Electronics, leading to market concerns about ASML's future shipments