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In 2023, due to the chip ban in the United States, overseas semiconductor equipment manufacturers have delivered to the Chinese market, hoping to make more profits before the ban becomes stricter. This is particularly evident in the Dutch company ASML. According to statistics, the Chinese market accounted for only 8% of ASML's revenue in the first quarter of 2023, but it has risen to 24% in the second quarter and 46% in the third quarter. The figure is expected to be higher in the fourth quarter. In 2023, ASML is expected to receive about 55 billion to 60 billion yuan from the Chinese market, while the company's revenue in China in 2022 will only be 2.1 billion euros, equivalent to more than 17 billion yuan. In this way, ASML's revenue in the Chinese market will increase to more than three times that of 2022, and the growth rate may reach about 250%, which can be described as one year to three years. The reason why ASML was able to sell so many devices in 2023 is, of course, the increase in demand from the Chinese market. China is currently vigorously expanding the production line of chips, which requires a large number of lithography machines, so ASML has been chosen as the leading supplier. On the other hand, China also needs to stock up on a large number of goods, as a number of new bans have been introduced between October 2022 and October 2023 according to the ban regulations, which are becoming more and more stringent. However, the ban has not yet been fully implemented until January 1, 2024, so Chinese companies want to stock up as soon as they are able to buy equipment in case of tensions in the coming years**. ASML is also actively responding to the needs of the Chinese market. Think about it to more than triple deliveries in the Chinese market in 2023 compared to 2022, and ASML's total capacity has not increased significantly. This shows that ASML must be working overtime to produce lithography machines, and even transfer the capacity that should have been delivered to other customers, giving priority to Chinese customers, so that so many equipment can be delivered. According to ASML's internal disclosure, they expect to complete all orders owed to Chinese customers in 2023. In the past, ASML has said that they owe more than 7 billion euros (about 60 billion yuan) to Chinese customers for lithography machine orders, which according to the normal delivery logic, take 2-3 years to fully deliver, but in 2023, ASML took a year to complete the full delivery, and it was even described as completing the task ahead of schedule. Although the Chinese orders have been completed, there are still orders that have not yet been delivered by other global customers, some of which even take 1-2 years to complete. At present, ASML still has more than 20 billion euros (about 160 billion yuan) of undelivered orders, which shows that ASML does give priority to Chinese companies. Why does ASML do this? The reason is simple, first of all, they want to try to maintain a cooperative relationship with the Chinese market, after all, the Chinese market is huge, the future development potential is greater, there is nothing wrong with pleasing Chinese customers, and within the scope of the ban, flexible and without any problems. Second, after the ban, some of ASML's lithography machines could not be sold to Chinese mainland, so they hope to take advantage of the current opportunity to sell more and earn more money. As for orders from other countries and regions, it doesn't matter if you deliver a little later, you can sell them at any time anyway. But the Chinese market will lose this opportunity if it is missed, so they must deliver it as soon as possible. On the whole, although ASML has earned revenue from the Chinese market in 2023 for the past three years, for Chinese chip companies, they are still very grateful for ASML's support and cooperation, ASML is really a very reliable friend, what do you think?
Due to the impact of the U.S. chip ban, overseas semiconductor equipment manufacturers are under pressure to increase deliveries. Since 2019, the United States has imposed a ban on Chinese companies such as Huawei, restricting them from purchasing and using American technology, such as chips and lithography machines. This makes China urgently need other companies in the field of chip equipment to make up for the gap. In the face of this huge market demand, overseas manufacturers have stepped up their efforts to deliver to the Chinese market, hoping to make more profits before the ban is tightened. As one of the world's largest lithography machine manufacturers, ASML has naturally become one of the most popular companies in the Chinese market.
ASML's sales data for 2023 shows that their share of the Chinese market is growing rapidly. It contributed only 8% of revenue in the first quarter, but it has risen to 24% in the second quarter and 46% in the third quarter. Such data is remarkable and shows the huge demand for ASML in the Chinese market. According to **, ASML's revenue from the Chinese market will reach 55 billion to 60 billion yuan in 2023, which is equivalent to more than three times its growth in the Chinese market in 2022. ASML was able to deliver orders in such a short period of time, mainly due to the huge demand in the Chinese market and ASML's own increased production capacity and optimized production processes.
The semiconductor industry is one of the most competitive sectors in the world, with countries vying to increase investment and compete for market share. As one of the world's largest consumer markets, China's demand for chip equipment is growing rapidly. According to the National Development and Reform Commission, China plans to increase its semiconductor self-sufficiency rate to 70% by 2025, which means that China's chip equipment market still has huge room for growth. ASML actively responds to China's strategy to expand the chip industry, improve its first-class capabilities and accelerate delivery speed to meet the needs of the Chinese market.
Aware of the impact of the ban, Chinese companies have also shown more initiative. As a result of the ban, Chinese companies will face more severe pressure after October 2022. In order to cope with the tense situation that may be faced in the next few years, Chinese companies have increased their stockpiling of chip equipment such as lithography machines. They took advantage of the window of time when the ban had not yet been fully implemented to buy as many lithography machines as possible to prepare for production in the coming years. ASML, as their preferred supplier, has won the favor of Chinese customers thanks to its ability to deliver in advance.
ASML has demonstrated strong production capabilities to meet the needs of the Chinese market. It is understood that ASML will complete more than 60 billion yuan of lithography machine orders from Chinese customers in 2023, which is 2-3 years ahead of the original delivery time. The company's preference for the Chinese market** is a clear indication of its importance in the Chinese market. While ASML still has a backlog of more than 20 billion euros, this is mainly from other countries and regions, demonstrating ASML's strategy to prioritize the Chinese market.
ASML delivered a large number of lithography machines to the Chinese market in 2023, which makes Chinese chip companies full of gratitude to ASML. After all, ASML can provide such a large number of equipment to the Chinese market, which can be said to be an important driving force to help China's chip industry move towards a new stage of development. The mutually beneficial cooperation between the two parties provides ASML with huge room for growth due to the expanding demand in the Chinese market, and ASML's high-quality equipment and timely delivery also provide key support for Chinese chip companies. ASML's performance in the Chinese market demonstrates their focus on the Chinese market and their vision for long-term development. ASML not only worked overtime to produce lithography machines to meet the needs of the Chinese market, but also demonstrated its ability to respond flexibly to the ban rules. Their cooperative attitude and efforts have enabled Chinese companies to smoothly purchase the required equipment under the pressure of the ban, providing strong support for China's chip industry.
Overall, ASML delivered a large number of lithography machines to the Chinese market in 2023, with the huge demand from the Chinese market and the impact of the ban rules being the main reasons driving this situation. ASML has achieved fast delivery and meet the needs of the Chinese market by strengthening its production capacity and optimizing the ** chain, as well as responding flexibly to the ban rules. Chinese chip companies are grateful for ASML's contribution, and this cooperation will further promote the cooperation and development of China and the Netherlands in the field of semiconductors.
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