29 January 2025
Commenting on the latest ASML quarterly results, James Bull, Technology Industry Senior Analyst at RSM UK said:
“ASML’s bookings rebounded to €7.1bn in the fourth quarter driven by continued demand for the company’s advanced machines used to make artificial intelligence chips. This was significantly ahead of orders received during the third quarter at €2.8bn which was impacted by headwinds in the semiconductor industry, including US controls on exports to China, and Intel cancelling plans for new manufacturing facilities in Germany and Poland.
“Demand for ASML’s chip making machines surpassed analysts’ expectations as the hyperscalers including Meta, Google, Microsoft and Amazon continue to invest in AI infrastructure, with investment totalling over $200bn during 2024. Microsoft recently announced plans for a further $80bn of AI-related capital expenditure in the financial year to June 2025, while TSMC (Taiwan Semiconductor Manufacturing Co) announced capital expenditure plans of $38-$42bn for 2025. This is against a backdrop of governments worldwide continuing to double down on semiconductor sovereignty, with significant investments including the $50bn CHIPS Act, $500bn US Stargate project and the UK Government’s AI action plan.
“However, this week’s news of China’s DeepSeek developing a new open-source AI model that rivals the latest OpenAI models, and is significantly cheaper and more efficient, has rattled the technology market due to potential reduced demand for advanced AI chips manufactured using ASML equipment.
“This challenges the current status quo - that only the largest corporations or state backed entities with significant access to capital are able to develop and train AI models - and provides an opportunity for the European AI industry with less access to capital than US competitors. The introduction of genuine global competition will drive innovation, and lead to more cost-efficient solutions, which will meaningfully accelerate demand for AI.
“Demand for ASML’s products is still likely to remain strong in the future though. While DeepSeek’s significant progress has led to fears over future demand for advanced AI chips, which are manufactured using ASML’s equipment, ASML remains the sole manufacturer globally. This means that as AI is rapidly becoming more cost efficient, ASML may be well-placed to benefit from the rising adoption of AI as the technology becomes accessible to a wider audience.”

