ASML Q4 2020 revenue beats Wall Street estimate by 22 percent

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ASML first quarter profits up 10 percent from last year.
Image: ASML

ASML Holdings NV recently revealed it made €4.254 billion ($5.2 billion) in the fourth quarter of 2020, which topped Wall Street’s revenue projections by 22.9 percent. The equipment maker also announced it made €13.9 billion ($16.8 billion) for the full year 2020, an 18.26 percent improvement on its 2019 sales.

The Dutch corporation anticipates its growth trend continuing throughout the New Year because of robust demand for new high-density chips.

Since the firm is a key supplier for Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung, its strong forecast indicates good things for the global component industry.

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Why ASML Did So Well in Q4 2020

ASML did well last period because of the strong demand for its extreme-ultraviolet lithography (EUV) machines. The tools enable chipmakers to create high-performance components with market-leading transistor density. Its precision etching equipment let TSMC create the exceptionally powerful M1 procesors that power Apple’s new Mac lineup.

In Q4, it sold 80 new and used lithography systems, up 20 units from the same period last year. As the sole vendor of ultraviolet etching equipment, it can charge top dollar for its cutting-edge offerings. That exclusivity combined with the post-coronavirus pandemic digitalization wave has bolstered the company’s income.

ASML also saw an upswing in demand for its deep ultraviolet light (DUV) lithography machines in the December period. Though not as advanced as its EUV products, its NXT brand systems offer greater output for 7nm nodes. Because the semiconductor industry is still adjusting to the 5nm standard, its DUV equipment still has strong market relevancy.

ASML’s Predicts Strong Sales in 2021

The Dutch manufacturer anticipates sales of €3.9 billion ($4.73 billion) to €4.1 billion ($4.98 billion) in Q1 2021. If it hits the midpoint of its guidance, it will better its Q1 2020 revenue by 66.6 percent. In fact, the vendor expects to do strong business throughout 2021.

CEO Peter Wennink said the robust recovery of the logic and memory component markets would fuel his firm’s growth this year. He also noted that the ongoing digital infrastructure buildout and continued innovation in the 5G, artificial intelligence (AI), and high-performance computing (HPC) sectors have increased ordering across ASML’s catalog.

Wennink’s comments align with recent moves within the global component industry. Qualcomm and Samsung are working to develop a host of 5G compatible chipsets to meet public demand. Similarly, Nvidia and NXP Semiconductors have announced plans to collaborate with leading automakers to create high-performance vehicle processors.

ASML is on course to earn a great deal of money in 2021 via its close partnership with TSMC. Last August, the Dutch supplier opened a training center in Tainan, Taiwan, for the contract chipmaker’s employees.

The semiconductor manufacturer recently announced it plans to spend up to $28 billion this year. The company will need to dedicate a large portion of that sum to purchasing EUV equipment. DigiTimes reported the corporation intends to purchase 18 of the $120 million machines this year. Those tools will help the firm expand its capacity to serve its existing clients and potentially secure long-term contracts from Intel.

Provided they do not run into any unforeseen roadblocks, ASML and its clients should perform well this year.

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