ASML expects the chip market to pick up in the second half of 2023

ASML expects the chip market to pick up in the second half of 2023
ASML expects the chip market to pick up in the second half of 2023

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The season for the annual results of listed companies has started. Investors will be paying particular attention to corporate prospects given high inflation and the threat of a recession.

On Wednesday, the first large Dutch listed fund released its figures. Chip machine manufacturer ASML is counting on a turnover growth of 25 percent for this year.

On Tuesday after close of trading, software giant Microsoft released its annual figures in the US. Although Microsoft’s cloud business performed well, profits fell by 12 percent in the final quarter of 2022.

ASML: order book ensures 25% growth in 2023

Chip machine maker ASML has significantly increased turnover in 2022 compared to a year earlier. Despite the fact that there is a lot of uncertainty about matters such as inflation, interest rates and recession, but also the risk that the company may sell fewer chip devices to China, ASML expects further growth this year.

According to CEO Peter Wennink, his customers expect the market to pick up further in the second half of this year. In addition, the Chinese economy is picking up again now that the corona restrictions have been lifted there. “That means that the demand is still higher than we can supply.” ASML is by far the largest supplier of chip machines in the world and the only one that makes the most advanced EUV machines required for the production of the most modern types of chips.

ASML is not allowed to supply these machines to China and if it is up to the United States, this will also apply to the previous generation of machines, also known as DUV. But the Netherlands is opposed and despite a visit by Prime Minister Mark Rutte to the White House “nothing has changed yet”, Wennink knows. “We can still supply DUV devices to China.”

For the whole of 2022, ASML recorded a turnover of 21.2 billion euros, 14 percent more than in 2021. But the demand for ASML’s lithography machines is high, because the company still has more than 40 billion euros worth of orders in the books stand. So Wennink is counting on an increase in turnover for this year of 25 percent.

A profit of 5.6 billion euros remained for 2022. That was slightly less than the almost 5.9 billion euros of a year earlier, when more profit remained per euro of turnover. Among other things, personnel costs rose and more money was spent on research and development.

Microsoft: profit drop due to expensive dollar

In the last quarter of last year, Microsoft was able to do good business again with its cloud activities, despite the difficult economic conditions. Cloud platform Azure, for example, accounted for 38 percent more turnover than a year earlier. Microsoft has therefore performed better than experts widely expected.

Total revenue grew 2 percent to $52.7 billion. Microsoft saw its profit fall by 12 percent to $ 16.4 billion. This is partly due to the expensive dollar.

Also, the company has taken on a significant expense to fund its recently announced reorganization. Microsoft announced last week that it would cut 10,000 jobs worldwide. That amounts to almost 5 percent of the entire workforce.

Microsoft warned in October that its cloud activities were not going as well as in recent years. Because prices had risen sharply worldwide, many consumers also turned out to be more cautious. The major job cuts are intended to help the company adapt to the new economic reality.

The tech giant also continues to invest heavily in the future. On Monday it was announced that Microsoft will invest 10 billion dollars in OpenAI, the company behind the controversial program ChatGPT, in the coming years. That program has attracted many users in a short time by producing easily readable texts based on artificial intelligence.

With the investment, Microsoft wants to stay ahead of competitors Amazon, Facebook parent company and Google parent Alphabet when it comes to artificial intelligence, which is expected to have a great future. Microsoft will also add ChatGPT to Azure “soon”.

READ ALSO: Don’t be blinded by January’s stock market rally: the final phase of the bear market has yet to be completed, according to this stock market strategist

The article is in Dutch

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