One of the major suppliers of chip making tools believes demand for semiconductors could pick up again in the second half of this year, according to a CNBC and Financial Times report and theverge.
“Most of our customers tell us they expect a recovery in the second half of this year,” ASML CEO Peter Winink told CNBC. The forecast comes after a difficult few months for the tech industry that has been marked by layoffs and slumping consumer technology demand in the wake of the pandemic boom. .
ASML is important in the global semiconductor supply chain, and FT notes that it is the only company in the world that produces the ultraviolet (EUV) lithography machines needed to produce today’s most advanced chips. ASML customers include TSMC, Samsung and Intel.
“They want to prepare for … an improvement in the second half of the year and 2024,” ASML’s chief executive told the Financial Times.
Demand for ASML equipment can therefore provide an indication of where companies think demand for consumer technology products could be in the long term, Weinink told CNBC that the average lead time for ASML devices is about a year and a half to two years and that ” When you look at the relatively short projections…of a potential recession, customers of course don’t cancel any orders because they can. They find themselves at the back of the queue when this thing comes up again.” ASML expects its 2023 revenue to increase by 25% over On an annual basis in 2023, it expects to produce 60 EUV machines along with 375 less advanced deep lithography (DUV) machines.
ASML’s status as a major player in the semiconductor industry means that the Dutch company is caught in the midst of ongoing tensions between the US and China. The White House has imposed increasingly stringent restrictions on US companies looking to provide China with advanced chipmaking tools, while pressuring the Netherlands to do the same.
Wennink says ASML is currently unable to ship EUV machines to China, and the company is shipping less advanced DUV machines, allowing China to account for about 15 percent of ASML’s 2022 sales.
Japan and the Netherlands are expected to follow the US in imposing their own sanctions on the chip industry in the coming weeks, the Financial Times notes.
Not everyone is participating in the industry according to Wennink’s predictions. Microsoft CEO Satya Nadella, for example, said recently that he expects the downturn to last for about two years.