The U.S. ban has made ASML fight for a year, owing China 60 billion lithography machines, will it be delivered ahead of schedule?
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U.S. Export Controls to China: ASML pulled out all the stops to ship early.
With the restrictions on chips in the United States, foreign semiconductor device manufacturers began to deliver their products to China in the hope of obtaining greater benefits in the face of increasingly severe restrictions. Among these companies, ASML is particularly prominent in the Netherlands. According to the data, China's revenue accounted for only 8% in the first quarter of next year, while it increased to 24% in the second quarter and 46% in the third quarter. The figures for the fourth quarter are expected to be higher. Overall, ASML's revenue from China will reach 550-600 yuan in 2023, compared to 2.1 billion euros in 2022, equivalent to more than 17 billion yuan. If calculated at this rate, ASML's revenue in China will more than triple in 2022, an increase of up to 250%, which can be said to be one year to three years. The main reason why ASML was able to sell so many products in 2022 was the growing demand in China. In order to expand its chip production capacity, China has a high demand for lithography equipment, which is why it has set its sights on ASML. In addition, China must have sufficient reserves, during which a series of new restrictions will be imposed between October 2022 and October 2023 and will become more stringent. However, the ban won't be fully effective until January 1, 2024, so Chinese companies want to stock up on as much equipment as possible in case they run short for years to come. ASML also has a good cooperation with the market needs of China. Consider that if there were to more than triple the number of Chinese cars in 2023 compared to 2022, then the overall capabilities of ASML would not have improved significantly. This means that ASML must be working overtime and offering more products to Chinese users instead of capabilities that should be available to other users. ASML people say they hope to be able to deliver all orders from Chinese customers by 2023. ASML has said that it owes more than 7 billion euros (60 billion yuan) of lithography orders to customers in China, which would take about 2-3 years under normal circumstances, and ASML only took a year to sell out all the lithography machines, and it was ahead of schedule. Although all orders from China have been placed, there are still many customers from all over the world who have not yet delivered, and some will have to wait 1 to 2 years for delivery. ASML still has more than 20 billion orders to be delivered, which shows that ASML is still very sincere in supplying Chinese companies. Why is ASML doing this? The reason is very simple, one is to continue to maintain good cooperation with China, China is a big market, but also a good space for development, it is not a bad thing to satisfy Chinese consumers, as long as they do not violate the law, everything is acceptable. Secondly, after ASML was **, some lithography machines could not be exported to China, so they wanted to take the opportunity to sell and make a profit. As for foreign ones, it doesn't matter if the delivery is delayed, when it will be sold. However, if China's opportunities are missed, they will be lost, so they need to get the job done as quickly as possible. In short, although ASML will benefit from China in the next three years, Chinese semiconductor companies are still very grateful to ASML because ASML is indeed a good partner to trust, what do you think?
Foreign semiconductor device manufacturers are affected by the ban: speed up supply and seize the Chinese market.
The blockade of chips in the United States has forced foreign semiconductor device manufacturers to increase their supply. Since 2019, the United States has taken a series of measures against Chinese companies, such as Huawei, to prohibit them from purchasing and using American technologies such as chips and lithography. Therefore, China urgently needs other manufacturers to fill its gap in chip equipment. Faced with huge market demand, foreign manufacturers have stepped up their supply to China in the hope of reaping more benefits before the ban becomes more stringent. ASML is one of the world's largest manufacturers of optical equipment and one of the most popular companies in China.
ASML expects its share in China to grow rapidly by 2022. Revenue accounted for only 8% in the first quarter, 24% in the second quarter and 46% in the third quarter. These striking figures show that ASML is in high demand in the Chinese market. ASML expects revenue from China to be between $55 billion and $60 billion in 2023, more than three times China's sales in 2022. ASML was able to fulfill orders so quickly because of the strong demand in the Chinese market and because ASML itself increased its processing capacity and optimized its manufacturing process.
In the world, various countries around the world are increasing their investment in it and striving for more markets. China is the world's largest consumer market, and the demand for its integrated circuit products is also increasing rapidly. According to ***, China plans to increase the proportion of domestic semiconductor products in China by 2025 to 70%, which indicates that China's chip industry still has great growth potential. ASML responded to China's strategy of expanding its chip industry by increasing supply capacity and accelerating supply to meet China's needs.
Observing the effects of this prohibition, Chinese companies have also shown strong enthusiasm. As a result of this constraint, Chinese companies will face more severe supply problems after October 2022. Over the next few years, Chinese companies stockpiled semiconductor devices, including lithography machines, to cope with possible shortages. At this time, while the ban has not been completely implemented, we hurriedly procured lithography machines to cope with mass production in the next few years. Because of ASML's ability to ship early, it has become their first choice and has been widely recognized among Chinese customers.
ASML has proven itself to be able to cater well to China's needs. It is reported that ASML plans to provide more than 60 billion worth of lithography equipment orders to Chinese users in 2023, 2-3 years earlier than the planned delivery date. The company provides the best supply to China, which also shows the importance the company attaches to China. Although ASML still has an unfinished order of more than 2 billion, most of these orders are obtained from other countries or regions, which also indicates the strategic direction of ASML to supply products to the Chinese market.
ASML enters into partnerships with Chinese companies.
ASML will provide a large number of lithography equipment to China in 2023, which makes Chinese semiconductor companies very grateful to ASML. In short, ASML has the ability to provide so many devices for the Chinese market, which undoubtedly plays a great role in China's semiconductor industry. With the increasing expansion of the Chinese market, ASML has broad development prospects, and its high-quality production equipment and on-time delivery will become an important support for Chinese semiconductor manufacturers. ASML's performance in China demonstrates its focus on the Chinese market and its long-term development priorities. ASML has been working overtime to build lithography equipment to cater to China's needs, while also showing resilience enough to respond to the ban. It is this spirit of collaboration that has allowed Chinese companies to successfully obtain the equipment they need under the "ban", thus bringing strong support to China's semiconductor industry.
Overall, the huge demand in China and the related ban have played a big role in promoting ASML's lithography machines, prompting ASML to ship a large number of lithography machines to China in 2023. ASML has increased its production capacity, optimized its ** chain, and reacted to the relevant laws and regulations, thus guaranteeing the rapid delivery of products in line with the needs of China. Chinese chip companies would like to thank ASML for its positive contribution to the development and exchange of the Sino-Dutch semiconductor industry.
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