ASML delivers lithography machine ahead of schedule due to ban pressure?
As we all know, due to the US embargo on wafers, many foreign semiconductor manufacturers will send their products to China as much as possible, because as time goes by, the ban will become stricter and stricter, and there may even be a ban on production, so they need to make money as soon as possible.
Among these companies, ASML has the largest share of sales, with China accounting for only 8% in the first quarter of 2023, 24% in the second quarter, 46% in the third quarter, and an unknown but supposedly higher share in the fourth quarter.
Based on this calculation, ASML's sales in China will reach 55 billion to 60 billion yuan in 2023, compared to only 2.1 billion euros, or more than 17 billion yuan, in 2022.
In other words, ASML's sales in China in 2023 will triple as in 2022, which means that one year is equivalent to three years, and one year is equivalent to three and a half years of profit.
Why is ASML able to sell so many products in 2023? Because the Chinese market is expanding its chip production capacity, it buys lithography machines from ASML.
On the other hand, from October 2022 to October 2023, China will continue to buy new equipment, and the ban will be stricter and stricter, but before January 1, 2024, the ban is not fully in force, we must hurry up and buy as many lithographic presses as possible according to future demand to ensure that there will not be a shortage in the coming years.
If we also take into account that ASML is very cooperative, then it is conceivable that in 2023 the ** volume of the Chinese market will be more than three times that of 2022 without a significant increase in ASML's total production capacity. This meant that ASML had to work overtime to produce lithography machines while receiving orders from other companies and passing them on to Chinese customers, otherwise it would not have been able to deliver at all.
According to ASML, the company has completed all orders to Chinese customers by 2023. ASML has said that it has an order for lithography machines worth 7 billion euros (equivalent to 60 billion yuan) to Chinese customers, which is usually delivered in two to three years, but it took ASML a year to finally complete the order in 2023 and also delivered the order ahead of schedule.
Orders from China have been cancelled, but some of the remaining orders may take a year or two to be delivered, so ASML currently has an undelivered order of 2 billion euros and it is clear that ASML does intend to deliver all orders to Chinese companies.
Why does ASML do this? It's simple: maintain good relations with China, because the Chinese market is too big, and to maintain good relations, you must not break the law.
Another reason is that some lithography machines cannot be imported into China due to the ban. Therefore, Feng Yu decided to take advantage of this opportunity to sell a few more units and make a windfall.
As for orders from other countries, you can come back later because you can always get them, but if you miss the opportunity in China, you will never get them again.
In other words: if ASML makes more money in 2023 than it has in the past three years, many chip companies in China will appreciate it, and that's a good thing.