ASML Profits, Bookings Down Amid China Chip Spat

Dutch tech giant ASML, which supplies chip-making machines to the semiconductor industry, on Wednesday reported a drop in net profits and orders amid a high-tech trade spat between China and the West.

Net profits came in at 1.2 billion euros ($1.3 billion) in the first quarter of the year, compared to 2.0 billion euros in profit the firm reported in the fourth quarter of last year.

Bookings slumped to 3.6 billion euros, a sharp decline from the 9.2 billion euros reported in the fourth quarter.

ASML is one of the world's leading manufacturers of equipment to make state-of-the-art semiconductor chips, which power everything from mobile phones to cars.

But the semiconductor industry has become a geopolitical battleground as the West seeks to restrict China's access over fears the chips could be used for advanced weaponry.

ASML announced this year that it had been blocked from exporting "a small number" of its advanced machines to China, amid reports of US pressure on the Dutch government.

Chief executive Peter Wennink said the firm was still upbeat for the second half of the year, which ASML has identified as a "transition" year before a stronger 2025.

"Our outlook for the full year 2024 is unchanged, with the second half of the year expected to be stronger than the first half, in line with the industry's continued recovery from the downturn," Wennink said in a statement.

Overall sales in the first quarter came in at 5.3 billion euros, lower than the 7.2 billion euros from the fourth quarter but in the range the company had forecast.

In its annual report published in January, the firm had forecast first-quarter sales of between 5.0 and 5.5 billion euros.

Source: AFP