ASML earnings: Focus on the long-term growth in semiconductors ASML earnings: Focus on the long-term growth in semiconductors ASML earnings: Focus on the long-term growth in semiconductors

ASML earnings: Focus on the long-term growth in semiconductors

Equities 5 minutes to read
Peter Garnry

Head of Equity Strategy

Key points

  • Temporary setback in orders: ASML's Q1 results showed a significant miss on orders, leading to a 4% decline in share price. However, management reaffirmed mid-term growth goals, emphasizing long-term potential despite short-term challenges.

  • Focus on long-term secular growth: Despite short-term fluctuations, ASML benefits from the increasing adoption of semiconductors across various applications. Investors are advised to focus on the long-term trajectory, fueled by factors like AI, the energy transition, and increased localized chip production.

  • ASML's competitive edge: ASML maintains a technological leadership position, high barriers to entry, strong customer relationships, global reach, and vertical integration. However, investors should consider key risks such as cyclicality, customer dependence, technological competition, supply chain disruptions, and regulatory/political factors.

Temporary setback in orders

ASML, the world's largest semiconductor equipment maker for advanced computer chips, is done 4% as the Q1 results showed a significant miss on orders at €3.6bn vs est. €4.6bn. The company also guided Q2 revenue of €5.7-6.2bn vs est. €6.5bn. Management was quick to reaffirm its mid-term goals presented on the Investor Day 2022 in which ASML predicts 9% annualised revenue growth for the global semiconductor industry until 2030. In the presentation, ASML says the energy transition, AI, and AR/VR headsets are some of the biggest expected drivers of growth.

In its Q1 results, the company was also quick to point out that it sees a stronger second half than first half this year. Given ASML’s track record many investors have trust in the company and reiterating the expectations presented on the Investor Day 2022, means that investors are likely downplaying today’s result. The share price has also recovered more than half of the initial decline on the opening price.

ASML share price | Source: Saxo

Focus on the long-term secular growth in semiconductors

How nervous should investors be about ASML’s Q1 result today? ASML has had a history of many ups and downs as the annual revenue figures since 1997 show. But it is also clear that the cyclicality of ASML’s business has declined over the years and especially since 2013 the increasing adoption of semiconductors across many applications has stabilised the growth trajectory. The red bars highlights analysts’ expectations for revenue until 2028.

In 2023 revenue hit €27.6bn and this year will only see a small increase before growth picks up again in 2025 with revenue expected at €36.2bn. Our message to investors after today’s Q1 result is to focus on the long-term. Semiconductors are getting integrated in more and more physical applications as the world gets more connected and will need more local computing power. AI and the energy transition will become key technological objectives for many countries and the increased geopolitical fragmentation will mean more localized chip production. As a result a huge capital expenditures wave is under way.

ASML is not the only way to capture the growth of semiconductors. Please check our semiconductor theme basket for more inspiration.

ASML Investor Day 2022 slide | Source: ASML

ASML’s competitive edge

The success of ASML and the future returns for shareholders will rely on ASML's ability to sustain its competitive edge in the industry. Below we list ASML's five key competitive edges: 

  1. Technological leadership: ASML invests heavily in R&D to continuously innovate and develop cutting-edge lithography systems. Their machines utilize advanced technologies such as Extreme Ultraviolet (EUV) lithography, which enables the production of smaller, more powerful chips, giving ASML a significant technological edge over its competitors.

  2. High barrier to entry: The semiconductor industry requires substantial expertise, significant capital investment, and complex technological know-how. ASML's proprietary technologies, patents, and deep industry knowledge create a high barrier to entry for potential competitors, thereby strengthening its market position.

  3. Customer relationships: ASML has strong relationships with major semiconductor manufacturers worldwide. These long-standing partnerships are built on trust, reliability, and the ability to deliver the highest quality equipment tailored to the specific needs of each customer. This strong customer base provides ASML with recurring revenue streams and a competitive advantage in securing new contracts.

  4. Global reach: ASML operates on a global scale, with a presence in key semiconductor manufacturing regions such as the US, Europe, and Asia. This global footprint allows the company to effectively serve its diverse customer base and adapt to changes in regional demand and industry trends.

  5. Vertical integration: ASML's vertical integration strategy, which includes the acquisition of companies like Cymer and Carl Zeiss SMT (24.9% minority stake), allows it to control critical components of the semiconductor manufacturing process. By owning key technologies and expertise across the lithography supply chain, ASML can optimize product performance, quality, and reliability, giving it a competitive advantage in the semiconductor industry.
ASML Investor Day 2022 slide | Source: ASML

Key risks to consider

While ASML possesses some strong competitive advantages it is important for investors to recognize the risk factors that can negatively impact the business of ASML. Some of these risk factors are:

  • Cyclicality of the semiconductor industry (which the historical revenue chart above highlights).

  • Dependence on a few large customers.

  • Technological risks with especially Chinese equipment makers potentially being strong competitors in the future as has recently been seen in the car industry with Chinese EV makers.

  • Supply chain disruptions are a key risk as reliable and cheap access to components is critical for ASML’s production.

  • Regulatory and political risks as ASML is seen as a key bottleneck in the global AI chip production. The trade friction between the US and China has also extended into AI chip technology in which the US government has pushed the Dutch government to exercise some export controls on ASML machines for the Chinese market.

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.