ASML, a Dutch semiconductor equipment manufacturer, reported strong fourth-quarter net bookings, exceeding expectations and demonstrating continued demand for its advanced chipmaking tools. The company's performance comes despite concerns raised by the emergence of cost-effective AI models like DeepSeek's R1, which could potentially impact spending on high-end GPUs used in AI training.
ASML , a Dutch company specializing in chipmaking equipment, reported a surge in fourth-quarter net bookings , reaching 7.09 billion euros. This represents a remarkable 169% increase from the previous quarter and surpasses analysts' expectations of 3.99 billion euros. The strong performance indicates sustained demand for ASML 's advanced tools, even amidst concerns sparked by DeepSeek, a Chinese AI firm, launching a low-cost AI model that threatens to impact spending on AI infrastructure.
ASML's shares experienced a significant boost, rising over 11% before settling at a 9.6% increase as of 9:35 a.m. London time. ASML's CFO, Roger Dassen, confirmed an order backlog of approximately 36 billion euros at the end of 2024. The company's resilience in the face of recent market turbulence stemming from DeepSeek's R1 reasoning model, which claims to outperform OpenAI in both cost and efficiency, is particularly noteworthy. This development has raised questions about the substantial investments made by leading AI companies like OpenAI and Microsoft in Nvidia graphics processing units (GPUs), crucial for training and running advanced AI models. Concerns emerged that the affordability of DeepSeek's model could potentially reduce the demand for ASML's high-precision extreme ultraviolet (EUV) machines, essential for manufacturing the most sophisticated microchips. Notably, EUV tools accounted for 3 billion euros of ASML's fourth-quarter net bookings.Despite the emergence of cost-effective AI alternatives, ASML CEO Christophe Fouquet remains optimistic, asserting that the trend toward lower AI costs could actually stimulate greater demand for semiconductors. He believes that increased accessibility to AI will drive the creation of more applications, ultimately leading to higher chip requirements. While declining to comment on specifics regarding DeepSeek's R1, Fouquet expressed confidence in the sustained demand for AI-focused chips, observing no signs of a slowdown. He noted that the industry is actively discussing DeepSeek's impact, but ASML hasn't encountered any customer inquiries regarding its potential effects on chip demand. Analysts, such as Ben Barringer from Quilter Cheviot and Michael Field from Morningstar, have lauded ASML's earnings report, affirming its value and potential for growth. They believe the strong performance reinforces the company's position as a leader in the AI chip sector and presents a compelling opportunity for investors
ASML Chipmaking AI Semiconductors Deepseek EUV Net Bookings Demand Market Resilience Earnings Report
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