ASML, a Dutch Chip Manufacturer, Experiences Surge in Orders Due to AI Advancements

EINDHOVEN, Netherlands, Jan 29 (Reuters) - Premier computer chip equipment manufacturer ASML announced fourth-quarter bookings of 7.09 billion euros ($7.39 billion) on Wednesday, significantly surpassing expectations, fueled by a surge in AI that boosted demand for the company's cutting-edge equipment.

The robust order intake is likely to reassure ASML investors and others with stakes in chip stocks that the outlook for AI chips remains robust, notwithstanding a recent downturn triggered by the launch of DeepSeek, which consumes less computing power than its competitors.

ASML's shares surged 11% to 722 euros in early trading.

According to Visible Alpha's survey, analysts had anticipated bookings of 3.99 billion euros, an uptick from 2.63 billion euros in the third quarter of 2024.

"The primary growth driver in our industry is artificial intelligence," remarked ASML CEO Christophe Fouquet in a statement.

The introduction of DeepSeek has raised questions about whether tech giants like Google, Microsoft, Meta, and Amazon will proceed with their plans for substantial investments in AI chips. ASML's major client, TSMC, produces most chips for Nvidia and prominent software companies.

ASML announced a fourth-quarter net income of 2.7 billion euros on revenues of 9.3 billion euros.

Michael Roeg, an analyst at Degroof Petercam, noted that the results surpassed expectations "across the board," but emphasized that ASML may not be directly affected by DeepSeek's arrival.

"The implications of DeepSeek are more suited for discussion in the upcoming conference calls of major data center operators and Nvidia," he suggested.

ASML reaffirmed its sales projection for 2025 of 30-35 billion euros, signaling growth of 7-25% from 2024's 28.3 billion euros. Despite challenges faced by TSMC and memory chip manufacturer SK Hynix, they are poised to benefit from the AI surge.

In the fourth quarter, the United States represented ASML's largest market, accounting for 28% of sales, marginally ahead of China. This development mirrors TSMC's Arizona expansion and Intel's acquisition of ASML's first two "High NA" EUV tools, each valued at around $400 million.

Despite chip equipment export restrictions imposed by the U.S. and Dutch governments on national security grounds, ASML anticipates that China's sales will decrease to 20% of the company's total after a significant build-out in 2024.

($1 = 0.9579 euros)