Generative AI Boom Can’t Happen Without ASML,  CEO Wennink Says

(Bloomberg) -- ASML Holding NV sees the artificial intelligence boom driving demand for the Dutch company’s most advanced chipmaking machines, according to its chief executive officer.

AI will need “massive amounts of computing power and data storage. I think without ASML, without our technology, that’s not going to happen,” CEO Peter Wennink said in an interview with Bloomberg TV at the company’s headquarters in Veldhoven on Wednesday. “It’s going to be a big driver for our business,” he added.

Wennink’s comments follow record orders in the fourth quarter, which tripled from the quarter before and beat estimates, sending its stock up the most in 14 months.

Read More: ASML Orders Triple in Sign of Semiconductor Industry Revival

The rise of generative AI over the past year, catalyzed by OpenAI’s ChatGPT launch late 2022, has boosted expectations for semiconductor companies across the board. AI systems require specialized chips that can process vast amounts of data. Nvidia Corp.’s technology, manufactured using ASML’s machines, has dominated the field, and the California-headquartered company’s stock more than tripled in 2023. 

Still, ASML spent much of 2023 grappling with a slowdown in orders from some of its largest customers, including Taiwan Semiconductor Manufacturing Co., as high interest rates and inflation dampened consumer demand for electronic goods. 

ASML benefited from strong demand from China last year as chipmakers there rushed to get lithography machines ahead of Dutch export rules meant to hobble Beijing’s semiconductor ambitions. China, which only accounted for 8% of ASML’s sales in the first quarter, became the Veldhoven-based company’s largest market in 2023. 

The Asian country may “very well” become a smaller proportion of ASML’s sales in the quarters ahead, Wennink said. But still, nearly “90% our business in China has to do with mature technology,” he said. That technology is not yet restricted by the US or Dutch export controls.

ASML’s net sales rose to €27.6 billion last year, an increase of 30% from 2022, the company said. 

“2023 was our top year,” Wennink said. “We won’t see another 30% growth in 2024.” ASML has previously forecast flat growth this year before a banner year in 2025. 

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.