Strong demand in the semiconductor sector, fueled by AI, drives growth, but export restrictions and market uncertainties temper expectations.

ASML Holding, the leading chipmaking equipment manufacturer, reported a significant surge in orders for the fourth quarter of 2024, marking its best-ever quarterly performance. The company registered more than nine billion euros in orders, more than three times the level of the third quarter. Despite the strong demand, particularly in artificial intelligence (AI) chips, ASML kept its cautious outlook for 2024, citing new export restrictions to China and ongoing market uncertainties.

For the fourth quarter, ASML reported net profits of two billion euros (S$2.9 billion), a 9% increase year-on-year, on revenues of 7.2 billion euros. The results exceeded analyst expectations, with net profit forecasted at 1.87 billion euros and revenue of 6.9 billion euros.

However, CEO Peter Wennink noted that while the semiconductor industry showed signs of recovery, it was still navigating through the bottom of the cycle. “Our customers are still not certain about the shape of the semiconductor market recovery this year,” he said, highlighting positive signals such as rising demand for chips and increased factory utilization rates.

Despite the encouraging order growth, ASML remains cautious about the upcoming year. The company cited ongoing challenges due to export restrictions, especially with regard to China, and the uncertainty surrounding the pace of semiconductor market recovery. Taiwan’s TSMC, ASML’s largest customer, also indicated flat capital expenditures for 2024, signaling a more cautious approach to investment in chip production.