Solid Third-Quarter Performance

Dutch semiconductor equipment maker ASML reported better-than-expected third-quarter bookings, reflecting resilient demand from major chipmakers despite ongoing market challenges. The company’s strong order intake underscored the strategic importance of its lithography systems in advanced chip production.

Revenue for the quarter came in slightly ahead of analyst estimates, supported by healthy shipments of deep ultraviolet (DUV) and extreme ultraviolet (EUV) systems. Margins remained stable, highlighting disciplined cost management in a period marked by cyclical softness in the broader semiconductor sector.

Export Controls Weigh on China Sales

While overall performance was robust, ASML cautioned that demand from China — one of its key markets — is expected to slow in the coming quarters. Export restrictions imposed by the U.S. and aligned European policies continue to limit shipments of advanced lithography equipment to Chinese chip manufacturers.

Executives noted that the company has largely fulfilled earlier orders from China, but new bookings from the region are likely to decline as trade and regulatory headwinds persist. The shift may pressure near-term growth, though ASML expects other regions, particularly the United States and South Korea, to partially offset the slowdown.

Outlook and Industry Dynamics

ASML reaffirmed its full-year guidance and reiterated expectations for stronger growth in 2025. Management described 2024 as a “transition year,” emphasizing that recovery in semiconductor capital spending will likely gain momentum once memory and logic chip inventories normalize.

The company remains focused on scaling up production capacity for its next-generation “High-NA” EUV tools, expected to become a key growth driver as chipmakers prepare for 2-nanometer and smaller process technologies. These systems are expected to anchor the next phase of semiconductor innovation, with ASML positioned as the sole global supplier.

Broader Market Implications

ASML’s results come as the semiconductor industry continues to balance near-term caution with long-term optimism. Analysts view the company’s reaffirmed outlook as a sign that the cyclical downturn may be nearing its bottom, though geopolitical uncertainty and export rules still pose risks.

Looking ahead, investors will focus on how quickly ASML’s customers resume capital expenditures and how effectively the company can diversify demand beyond China. Sustained innovation in chip design and production technology will remain central to ASML’s long-term growth trajectory.