ASML Holding, the Dutch chip-equipment manufacturer behind advanced semiconductor production, saw a decline in its shares following concerns raised by TF International Securities analyst Ming-Chi Kuo. Kuo, known for his insights into Asian supply chains, expressed his belief that ASML may face significant cuts to its EUV equipment shipment forecasts for 2024, ranging from 20% to 30%.
ASML’s EUV lithography machines are crucial to the manufacturing process of advanced semiconductors and are utilized by major customers such as Taiwan Semiconductor Manufacturing, Samsung Electronics, and Intel.
After Kuo’s statement was released on social media and Medium, ASML’s shares experienced a noticeable drop, with a 1.4% decline in trading on Wednesday. While the company did not provide any direct response to Kuo’s analysis, it did indicate that it would offer further insight into EUV sales when reporting its third-quarter earnings in a few weeks.
Kuo points to weakening sales for MacBook laptops and iPads as well as potential delays in planned factory expansions by memory chip manufacturers as contributing factors to the expected downturn in demand for advanced chips and related equipment in 2024. As a result, ASML’s business could be negatively impacted.
With regards to the overall recovery of the chip industry, Kuo remains uncertain, suggesting that the anticipated turnaround may take longer than expected. The prevailing market consensus is that the semiconductor sector will reach its bottom point in the second half of 2023; however, Kuo suggests closely monitoring if this timeline may be pushed back to the first half of 2024 or even the second quarter of 2024.
It is important to note that ASML has not commented directly on Kuo’s analysis, and further updates on this matter are expected when the company announces its third-quarter earnings.