CEO Peter Wennink (L) and CFO Wolfgang Nickl (R) of Dutch chip equipment manufacturer ASML attend the presentation of the annual figures of 2018.
ASML, a major Dutch supplier of chip production equipment, predicts that semiconductor demand will begin to rise again in the second half of this year, The Verge reported.
This forecast follows a rocky few months for the tech sector, characterized by layoffs and a drop in consumer technology demand after record-breaking growth.
According to CNBC, the semiconductor industry relies heavily on ASML, making it a crucial link in the supply chain. The Financial Times said the firm is the sole manufacturer of extreme ultraviolet lithography (EUV) equipment, which is used to create the most sophisticated circuits available today.
Companies like TSMC, Samsung, and Intel are among ASML's clientele.
2023 Forecast
Companies' expectations for the future demand for consumer technology items might be inferred from the level of interest shown in ASML's gear. CEO Peter Wennink told CNBC that ASML's machines typically have a lead time of about a year and a half to two years.
He added, "When you look at the relatively short expectations... of a potential recession, then customers are of course not canceling any orders because they could find themselves in the back of the queue when this thing turns up again."
Previously, CEO Wennink told the Financial Times that they want to plan for an upsurge in the second half of 2023 through 2024.
On Wednesday, Jan. 25, ASML said that its net sales for the fourth quarter of 2022 increased by more than 29% to 6.4 billion euros ($7 billion). There was an increase of almost 13% in net sales from the previous year, bringing the total for the year to a whopping 21.1% of the euro. Nonetheless, annual net income fell by more than 4% to 5.6 billion Euros.
ASML anticipates a 25% growth in revenue and the production of 60 EUV machines and 375 less sophisticated deep lithography (DUV) machines in 2023.
Meanwhile, not everyone in the business agrees with Wennink's prediction. For instance, Microsoft CEO Satya Nadella predicted that this recession would persist for another two years.
See Also: China's Chip Sales Drop 21% Following a Continuous Sluggish Global Chip Demand
US-China Chip War
Because of ASML's prominence in the semiconductor business, the Dutch firm has been embroiled in the conflict between the US and China. The White House has been pressuring the Netherlands to adopt similar limits on American businesses that want to sell cutting-edge chipmaking equipment to China.
As per Wennink, ASML cannot provide EUV equipment to China at this time. Instead, they ship less powerful DUV machines, leading to China accounting for around 15% of ASML's sales in 2022.
It is reported that the Japanese and Dutch governments are planning their own chipmaking restrictions to follow the US in the coming weeks.
See Also: Ex-Chinese Chip Fund Exec Kicks Out of Communist Party for Bribery and Corruption
