In a significant boost for the semiconductor industry, ASML, the Dutch titan in chip manufacturing equipment, has reported unprecedented orders for the fourth quarter of 2023, driven largely by surging demand from AI chip producers, including Nvidia. This surge comes as the company also embarks on a substantial restructuring effort, which includes a focus on engineering talent and the reduction of management positions.
Record Orders Fuel Optimism
ASML’s fourth-quarter orders skyrocketed to an all-time high of €13.2 billion (approximately US$15.8 billion), a remarkable increase from €7.1 billion in the same period last year. This surge not only surpassed analysts’ expectations, which had set the forecast at around €6.32 billion, but also reflected the growing need for advanced chip production capabilities as tech companies ramp up efforts to meet the demands of artificial intelligence and expansive data centres.
ASML’s CEO, Christophe Fouquet, highlighted the importance of its clients’ production capacity increases, noting that companies like Taiwan’s TSMC, Samsung, and Micron are significantly boosting their order volumes. “Micron has been announcing a groundbreaking almost every week for the last few weeks. There, you have a direct translation basically into shipments for us,” he remarked, indicating a direct correlation between client expansions and ASML’s order growth.
Restructuring for Innovation
In addition to celebrating record orders, ASML has announced the termination of approximately 1,700 positions, accounting for about 3.8 per cent of its workforce. This move is part of a broader strategy aimed at streamlining operations and enhancing its engineering focus. Over the next few months, the company plans to eliminate a total of 3,000 management roles while simultaneously recruiting more engineers to drive innovation within the firm.
Fouquet expressed the urgency of this restructuring, stating, “We want to really boost, again, our engineering capability, our innovation engine. Our engineers told us that a lot of the time they spend is no longer on innovation because the organization has become so complex.” This shift underscores ASML’s commitment to maintaining its leadership in the competitive semiconductor landscape.
Discontinuation of Quarterly Orders Data
Despite the excitement surrounding its order figures, ASML has decided to discontinue the practice of releasing quarterly order data, citing concerns that it contributes to unnecessary share price volatility. “It will be the last time that ASML reports quarterly order intake and the company is going out with a bang,” remarked ING analyst Marc Hesselink. This decision reflects a strategic pivot towards stabilising share performance as the firm navigates an evolving market climate.
In light of the rising demand for AI technology, ASML has also elevated its sales forecast for 2026, projecting revenues between €34 billion and €39 billion, surpassing previous estimates. The company had previously anticipated flat-to-increased sales of €32.7 billion in 2025.
Financial Performance and Future Outlook
ASML’s financial health remains robust, with net profit for 2025 expected to rise by 26.3% to €9.6 billion, up from €7.6 billion the previous year. This growth is attributed to a 15.5% increase in annual sales, which reflects the escalating need for advanced chips used in AI applications.
Analysts have noted that the positive trajectory of ASML’s orders is indicative of broader trends in the industry, particularly as major players like TSMC, Samsung, and Micron increase their investments in AI logic and memory chips. Mizuho analyst Kevin Wang stated, “Overall there is good fourth-quarter orders and 2026 outlook, driven by AI demand for EUV in both logic and DRAM.”
Additionally, ASML has announced a €12 billion share buyback programme to be executed by 2028, further signalling confidence in its long-term financial stability.
Why it Matters
The developments at ASML are crucial not only for the company but also for the broader semiconductor industry. As demand for AI technologies continues to soar, the need for advanced manufacturing solutions becomes paramount. ASML’s ability to adapt and innovate amidst shifting market dynamics positions it as a key player in shaping the future of chip production. The company’s strategic focus on engineering talent, paired with its record order intake, signals a promising outlook for the industry as it ventures deeper into the AI era.
