ASML20250718

Summary of ASML Conference Call Company Overview - Company: ASML - Industry: Semiconductor Equipment Key Points and Arguments Financial Performance - ASML expects Q3 2025 revenue to be between €7.4 billion and €7.9 billion, below market expectations of €8.26 billion [2][4] - Gross margin is projected to be 50%-52%, influenced by high-end EUV equipment deliveries [2][5] - For the full year, ASML anticipates a 15% year-over-year revenue growth, maintaining a gross margin of 50%-52% [2][5] Market Outlook - ASML has not provided specific guidance for 2026, citing positive impacts from AI and multi-layer UV on EUV demand, but expresses caution due to geopolitical and macroeconomic uncertainties [2][6] - Investors are concerned about the divergence in EUV growth rates, with ASML projecting a 30% increase, lower than the market's expectation of 40%-50% [2][7] - Customers are opting for platform upgrades instead of purchasing new equipment, affecting EUV shipment forecasts [2][7] Regional Insights - The semiconductor equipment spending in the U.S., mainland China, and Europe is expected to decline in 2025, while Taiwan and South Korea are projected to see significant growth rates of 60% and 37%, respectively [2][8] - SEMI predicts a 25% decline in semiconductor equipment spending in mainland China for 2025, followed by a 5% decrease in 2026, reflecting geopolitical impacts and capacity adjustments [2][10] Revenue Contribution - The contribution of mainland China to ASML's revenue is expected to stabilize at around 25%, up from an initial estimate of 20% [2][11] - Despite a 35% year-over-year decline in mainland China revenue in Q2 2025, Taiwan's revenue surged by 274% [3][12] Industry Trends - Infrastructure spending is projected to drop by 30% in 2025, with a recovery of 3% in 2026; equipment spending is expected to grow by 2% in 2025 and 12% in 2026 [2][8] - The wafer fabrication equipment (WFE) market is anticipated to see modest growth rates of 5%-6% in 2026 [2][9] Investor Sentiment - Investors are currently pessimistic about 2026 expectations, which are lower than industry association forecasts [2][14] - There is potential for investment opportunities if geopolitical tensions ease and visibility on major customer investments improves [2][14] North American Equipment Manufacturers - North American equipment manufacturers are expected to perform better due to advancements in processes, GAA, and advanced packaging, despite macroeconomic uncertainties affecting investment visibility [2][13] Additional Important Content - ASML's Q2 2025 revenue was €7.7 billion, a 23% year-over-year increase, with net profit reaching €2.29 billion, a 45% increase [3][4] - The company reported a significant increase in EUV equipment revenue by 82%, while DUV equipment revenue declined by 10% [3][4]