ASML maintains bullish 2030 outlook on AI-driven demand

(Bloomberg) — ASML Holding NV (ASML), the Dutch maker of advanced chip-making machines that are critical to global supply chains, reaffirmed its long-term revenue outlook as it bets on an artificial intelligence-driven boom in semiconductor demand.

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The Dutch firm projected that sales in 2030 will range from €44 billion ($46 billion) to €60 billion, in line with its previous forecast, according to a statement issued as part of the company’s investor day on Thursday.

The outlook is meant to reassure investors after the company’s order intake significantly missed analysts’ estimates in the third quarter, sparking a selloff in its shares and those of other chip-related businesses. Chipmakers such as Nvidia Corp. have enjoyed a boom in demand for their AI chips. But sales to other key buyers, including automakers and mobile phone and PC manufacturers, have remained mired in a prolonged slump.

ASML expects growing AI demand will help boost global chip sales to over $1 trillion by 2030, which it said represents an annual growth rate in the semiconductor market of about 9%.

ASML is the only company in the world that makes the kind of lithography machines that help semiconductor companies in turn produce the advanced chips powering everything from Apple Inc.’s smartphones to Nvidia’s AI accelerators. As such, it is often viewed as a bellwether for the broader industry and an early indicator of global semiconductor demand.

Manufacturing more cutting-edge AI chips will mean more of ASML’s advanced extreme ultraviolet lithography machines will be needed by semiconductor makers. The company foresees double-digit growth in EUV spending annually through 2030 for both advanced logic and DRAM.

The company forecast a gross margin of between approximately 56% and 60%​ in 2030.

ASML shares rose as much as 4.4% in Amsterdam on Thursday. They are down 5.9% this year.

While ASML in October cut its sales outlook for next year, it said on Thursday it will maintain its spending priorities. ASML currently has an ongoing €12 billion buyback through 2025 of which only 14% has been repurchased.

“We confirm our capital allocation strategy, and expect to continue to return significant amounts of cash to our shareholders through a combination of growing dividends and share buybacks,” ASML Chief Financial Officer Roger Dassen said in the statement.

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Also weighing on ASML’s prospects is the US government’s ongoing effort to limit China’s rise in the semiconductor sector, through repeated rounds of export controls that have targeted the sale of advanced artificial intelligence chips and chipmaking equipment. The Dutch government has struggled to find a middle ground between its US ally and ASML’s biggest market.

Due to the US pressure, ASML has never been able to sell its EUV machines to the Asian nation and was restricted from shipping its second most-advanced tools from this year.

China accounted for €2.79 billion of sales in the third quarter, nearly half of ASML’s total. The company expects China sales to account for about 20% of total revenue next year. US pressure on ASML to further restrict sales of semiconductor technology to Beijing will likely grow, Chief Executive Officer Christophe Fouquet said in an interview with Bloomberg in October.

Fouquet, who took the helm at ASML in April, told investors in October that he expects a slow chip market recovery to extend “well into 2025.” Still, next year and 2026 will be growth years for the industry and ASML overall, he said.

(Updates with charts and details from the statement)

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