Latest news with #Fouquet
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Business Standard
2 days ago
- Business
- Business Standard
How maker of 'most complex human machine' is navigating trade disputes?
Seemingly every week, Christophe Fouquet, the chief executive of the Dutch technology company ASML, has found himself grappling with political firestorms. Last month, President Trump announced 50 per cent tariffs on European goods sold to the United States, potentially raising some costs for ASML's lithography machines, which are critical for producing advanced microchips. Two days later, he paused the tariffs. Around the same time, the foreign minister of the Netherlands was in Beijing, partly to discuss lifting the rules that bar Chinese companies from buying ASML's equipment. Then this week, the Dutch government collapsed, throwing any trade talks into question. All of these events had the potential to disrupt ASML, which is the only maker of complex lithography machines that can cost as much as $400 million and be as big as a train car. The tools are so coveted by nations such as China and the United States for making cutting-edge chips that ASML has been turned into a geopolitical chess piece in trade battles, with some of its products restricted for export to certain countries. The tussling has made it an uncertain time for Fouquet, 52, a Frenchman who took over as chief executive of the $300 billion company last year. 'A large part of it is still out of our hands,' he said in a recent interview from ASML's headquarters in the small town of Veldhoven, about 80 miles south of Amsterdam. Fouquet, who was trained as an engineer, initially kept a low profile about the geopolitical challenges facing his company. Now, he has become more open about his concerns that government policies risk upending decades-old supply chains, slowing development of artificial intelligence and other technologies and motivating China to expand its homegrown semiconductor industry, which could ultimately undercut ASML's dominance and harm Western interests. Already, he noted, China has begun developing some of its own tools for lithography, which is essential to projecting circuitry patterns on silicon wafers to create chips. While China has a way to go before matching ASML's technology, he said, 'the people you try to stop will work harder to be successful.' 'It doesn't matter how many obstacles you put in the way,' he added. Fouquet is part of a small group of chip executives who are pushing back against US trade policies that limit the sale of their products and services. Last month, Jensen Huang, the chief executive of Nvidia, the largest producer of A.I. chips, said such policies meant to prevent China's access to key technologies were 'always questionable, and now it's clearly wrong.' 'Shielding Chinese chipmakers from US competition only strengthens them abroad and weakens America's position,' Huang said on a company earnings call. Fouquet is trying to bolster ASML's position. Apart from speaking out about the consequences of trade policies, he has expanded the company's lobbying teams in Washington, Brussels and The Hague. He said the European Union and the Netherlands could do more to protect ASML and the semiconductor industry from being caught in the crossfire of US-Chinese fights. 'We always want people to step up more for us, there's no question,' he said. 'I think that for Europe, for the Netherlands, the fact that ASML is a big topic is a real opportunity.' The Dutch Ministry of Economic Affairs declined to comment. Spokesmen for the European Commission and the US Commerce Department did not respond to requests for comment. Since the 1980s, ASML has been developing lithography machines to help create chips, the foundational technology that acts as the brains of computers. The company's most advanced machines deploy extreme ultraviolet, or EUV, light to create small transistors to pack growing amounts of computing power onto slivers of silicon. That requires ultrasophisticated mirrors and powerful forms of light, created by blasting tiny droplets of tin with a laser. The EUV tools include components from hundreds of international suppliers and require multiple 747 aircraft to deliver to customers from the Netherlands. 'It's the most complex machine humans have ever created, drawing on a supply chain that stretches across Europe, the United States and Asia, and harnesses fields like material science, physics, manufacturing, design and optics,' said Chris Miller, a professor at the Fletcher School of Law and Diplomacy at Tufts University and the author of 'Chip War,' a book about semiconductors. ASML's business has boomed as chips have been integrated into more parts of everyday life, including smartphones, cars, toys and refrigerators. More recently, companies like OpenAI, Microsoft and Google have built huge data centers worldwide filled with A.I. chips made with ASML equipment. The company's revenue hit a record 28.3 billion euros last year, or $32.3 billion, and ASML estimates that sales could reach €44 billion to €60 billion by 2030. Yet concerns about geopolitics, tariffs and export controls hang over the company. Some question if chip demand for the A.I. boom is sustainable and if ASML's newest machines are worth the $400 million cost. The company's stock is down about 25 percent over the past year. Fouquet said the Trump administration's tariffs created additional challenges, fomenting uncertainty and undercutting US efforts to build domestic chip factories. 'If you want to manufacture chips in your home country, you have to make sure that the cost of those chips is reasonable,' he said. 'If you have tariffs, of course the cost goes up.' Fouquet, who joined ASML in 2008, rose through the ranks to become vice president of the division making its EUV machines. About six years ago, those tools became the center of a debate over whether the West was supplying critical machines to China that would give the country a leg up, giving him a crash course in the geopolitics of technology. In 2019, the Trump administration successfully lobbied the Dutch government to block shipments of ASML's EUV systems to China. During the Biden administration, the export bans were expanded to include older machines. After trade restrictions, the company expects sales to China to fall to about 25 percent of its annual revenue from nearly half in the second quarter of last year, when ASML was delivering from a backlog of orders that could not be completed during the Covid pandemic. The semiconductor manufacturing hubs of Taiwan and South Korea are the company's largest markets. Fouquet said he and his team are in regular contact with government officials in Washington, Brussels and The Hague. His message to them is that the semiconductor supply chain is globally integrated and that policies meant to affect one country can slow technological development and drive up costs for everyone. Export bans can be counterproductive, he said, warning against using national security to justify protectionist policies. Rather than a focus solely on holding back an economic rival like China, attention needs to be on innovating, he said. Gregory C. Allen, a researcher at the Center for Strategic and International Studies and a former US defense official, said export bans were needed to slow China from creating an independent domestic semiconductor sector. Beijing is using tax breaks, free land, cash infusions and other subsidies to boost its companies, he said. Huawei, the Chinese technology company, has hired ASML workers to develop lithography machines, but remains behind, Allen said. Chinese companies stockpiled older models of ASML's lithography machines before export bans took effect, he added, allowing them to move forward with less advanced chip manufacturing. 'This is one technology where China is furthest behind, and it is technology that China will almost certainly be the last to replicate,' he said. On a recent Monday in Veldhoven, signs of ASML's growth were on display. Three construction cranes were in place to expand the company's headquarters. Inside, engineers dressed in sterilized white bunny suits tested the latest lithography machines. Seated in a top-floor conference room overlooking it all, Fouquet was optimistic that the industry was at 'just the start' of an A.I. boom that would drive demand for ASML's tools. Yet he acknowledged that geopolitical tensions were likely to continue to entangle his company. 'We cannot be naïve,' he said. 'This industry has become strategic for everyone.'
Yahoo
16-04-2025
- Business
- Yahoo
ASML misses order expectations as CEO warns of economic uncertainty
Computer chip equipment maker ASML reported first-quarter earnings that fell short of analysts' expectations on Wednesday. However, the Dutch tech giant maintained its outlook for 2025, forecasting annual sales between €30 billion and €35bn. CEO Christophe Fouquet was optimistic about growth in 2025 and 2026 while flagging uncertainties surrounding the ongoing global trade war. He stated: 'The recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while.' He also noted that artificial intelligence remains a key growth driver but warned of potential downside risks in the near term: 'It has created a shift in the market dynamics that benefits some customers more than others, contributing to both upside potential and downside risks as reflected in our 2025 revenue range.' The tone marked a shift from Fouquet's more confident outlook last year, when he projected annual sales growth of 8% to 14% over the next five years. ASML had previously forecast revenue of €44bn to €60bn by 2030, with gross margins between 56% and 60%. ASML maintains a near-monopoly position in the semiconductor industry, producing extreme ultraviolet lithography systems (EUVs) — the world's most advanced machines for manufacturing cutting-edge chips. While China remained its largest market in the first quarter, accounting for 29% of total revenue, the company previously forecasted that figure to fall to 20% by 2025. China made up 27% of ASML's net system sales in the first three months of the year. Nevertheless, the worsening trade tensions between the US and China — particularly the prospect of higher US tariffs on semiconductors — are weighing heavily on its outlook. In a video presentation, ASML outlined several potential consequences of new US tariffs, including increased freight costs due to retaliatory measures from other countries. Related Will computer chip maker ASML see a change of fortunes in 2025? ASML remains bullish for 2030 outlook as AI demand stays high ASML shares have been under pressure since mid-February, falling by 18% after former US President Donald Trump signalled new tariffs on semiconductors. Its earnings announcement came just one day after the US Department of Commerce said it had launched an investigation into semiconductor imports. Hours earlier, Nvidia also warned of a potential hit from the new US trade restrictions with China. Both developments may overshadow ASML's results by influencing its share price. ASML reported net bookings of €3.94bn for the first quarter — well below the €4.89bn expected by analysts. The figure also marked a sharp 44% drop from the previous quarter. Total net sales reached €7.7bn in the first three months of the year, slightly below the forecast €7.8bn and a steep decline from €9.3bn total seen in the final quarter of 2024. Net income also fell to €2.4bn from €2.7bn in the previous quarter. On a positive note, the company's gross margin improved to 54.0% from 51.7% previously. For the current quarter, ASML expects net sales between €7.2bn and €7.7bn, with a gross margin in the range of 50% to 53%. The company also announced plans to declare a total dividend of €6.40 per ordinary share for the year 2024, up 4.9% from the previous year. In the first quarter, ASML repurchased €2.7bn worth of shares under its current three-year buyback programme. Sign in to access your portfolio
Yahoo
16-04-2025
- Business
- Yahoo
ASML Holds Forecast Despite Miss on Orders and Tariff Headwinds
ASML (NASDAQ:ASML) shares dropped about 4% in premarket trading Wednesday after the company flagged growing uncertainty tied to U.S. trade tariffs, even as it held firm on its revenue guidance for 2025. Chief Executive Christophe Fouquet said in a video statement that emerging tariff policies have created fresh unpredictability for the company, adding it remains unclear how these changes will ultimately affect the business. Despite that, Fouquet pointed to strengthening demand in artificial intelligence, saying some of this year's and next year's orders are already firmed up, with customer discussions suggesting growth for both 2025 and 2026. Chief Financial Officer Roger Dassen outlined four key tariff-related challenges: shipments into the U.S., levies on imported equipment and materials used in U.S. operations, and reciprocal tariffs on American exports. He emphasized that ASML is actively working with partners across the supply chain to reduce potential fallout. Net sales in the first quarter rose 46.3% year over year to 7.74 billion, but fell 16.4% from Q4 2024 and came in below expectations. Bookings totaled 3.94 billion, missing the 4.82 billion analyst forecast. ASML maintained its full-year net sales guidance of 30 billion to 35 billion, and expects Q2 revenue between 7.2 billion and 7.7 billion. China contributed 27% of total system sales in Q1, trailing South Korea at 40%. The U.S. and Taiwan each accounted for 16%. ASML plans to declare a total dividend of 6.40 per ordinary share for 2024 and reported buying back approximately 4 million shares in Q1 for 2.7 billion. This article first appeared on GuruFocus. Sign in to access your portfolio
Euronews
16-04-2025
- Business
- Euronews
ASML misses order expectations as CEO warns of economic uncertainty
ADVERTISEMENT Computer chip equipment maker ASML reported first-quarter earnings that fell short of analysts' expectations on Wednesday. However, the Dutch tech giant maintained its outlook for 2025, forecasting annual sales between €30 billion and €35bn. CEO Christophe Fouquet was optimistic about growth in 2025 and 2026 while flagging uncertainties surrounding the ongoing global trade war. He stated: 'The recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while.' He also noted that artificial intelligence remains a key growth driver but warned of potential downside risks in the near term: 'It has created a shift in the market dynamics that benefits some customers more than others, contributing to both upside potential and downside risks as reflected in our 2025 revenue range.' The tone marked a shift from Fouquet's more confident outlook last year, when he projected annual sales growth of 8% to 14% over the next five years. ASML had previously forecast revenue of €44bn to €60bn by 2030, with gross margins between 56% and 60%. ASML maintains a near-monopoly position in the semiconductor industry, producing extreme ultraviolet lithography systems (EUVs) — the world's most advanced machines for manufacturing cutting-edge chips. While China remained its largest market in the first quarter, accounting for 29% of total revenue, the company previously forecasted that figure to fall to 20% by 2025. China made up 27% of ASML's net system sales in the first three months of the year. Trump trade tariffs Nevertheless, the worsening trade tensions between the US and China — particularly the prospect of higher US tariffs on semiconductors — are weighing heavily on its outlook. In a video presentation, ASML outlined several potential consequences of new US tariffs, including increased freight costs due to retaliatory measures from other countries. Related Will computer chip maker ASML see a change of fortunes in 2025? ASML remains bullish for 2030 outlook as AI demand stays high ASML shares have been under pressure since mid-February, falling by 18% after former US President Donald Trump signalled new tariffs on semiconductors. Its earnings announcement came just one day after the US Department of Commerce said it had launched an investigation into semiconductor imports. Hours earlier, Nvidia also warned of a potential hit from the new US trade restrictions with China. Both developments may overshadow ASML's results by influencing its share price. Net bookings disappoint ASML reported net bookings of €3.94bn for the first quarter — well below the €4.89bn expected by analysts. The figure also marked a sharp 44% drop from the previous quarter. Total net sales reached €7.7bn in the first three months of the year, slightly below the forecast €7.8bn and a steep decline from €9.3bn total seen in the final quarter of 2024. Net income also fell to €2.4bn from €2.7bn in the previous quarter. On a positive note, the company's gross margin improved to 54.0% from 51.7% previously. For the current quarter, ASML expects net sales between €7.2bn and €7.7bn, with a gross margin in the range of 50% to 53%. The company also announced plans to declare a total dividend of €6.40 per ordinary share for the year 2024, up 4.9% from the previous year. In the first quarter, ASML repurchased €2.7bn worth of shares under its current three-year buyback programme.
South China Morning Post
14-04-2025
- Business
- South China Morning Post
Dutch exports to China tumble as chip machine giant ASML clears back orders amid US bans
Dutch exports to China dropped dramatically in March, a sign that shipments from ASML Holding – the world leader in the producer of lithography equipment used to make semiconductors – neared clearing a backlog of orders from China. Advertisement Under restrictions adopted by the Dutch government under pressure from Washington, ASML is not permitted to sell its most advanced equipment to Chinese buyers. But for almost two years, massive purchases of its lower-end products have pushed Dutch shipments to China through the roof, bucking a broader trend of falling Chinese demand for European goods. The trend suggested Chinese buyers were stocking up on the equipment before such sales would be eventually outlawed due to Washington-enforced restrictions In March, however, exports fell by 10.4 per cent compared to a year earlier in value terms, according to statistics released by China's customs agency on Monday. As recently as December, January and February, the trade was growing strongly, with Dutch exports to the world's second largest economy soaring 11 per cent over the course of 2024. The drop, however, was not fully unexpected. In a video interview in January for the release of the Dutch tech giant's year-end financial results, CEO Christophe Fouquet said the company would soon have cleared its backlog of orders from China. Advertisement 'We had a lot of discussion about China in 2023-2024 because our revenue in China was extremely high. We have explained that this was caused by the fact that we are still working on some backlog created in 2022, when our capacity was not big enough to fulfil the whole market,' Fouquet said. '2025 will be a year where we see China going back to a more normal ratio in our business. So I think we're going to see again numbers people used to see before 2023,' he added.
