Semiconductor Equipment

ASML sees no signs of chip shortage improving

21 April 2022
ASML employees train new workers on how to operate EUV lithography machines. The company sees no shortage in demand for semiconductors and no quick end to the chip shortage. Source: ASML

One of the world’s largest semiconductor manufacturing equipment makers, ASML Holding NV, sees no signs of semiconductor demand faltering, especially in the market for older chips.

This is bad news for anyone expecting the ongoing chip shortage to see any type of relief.

"Currently we see no signs of any weakening in our customer base. Zero," said Peter Wennink, CEO of ASML in a recent call with analysts. "And even if demand weakens, there is a big gap between the demand and our capacity."

ASML makes lithography systems, including extreme ultraviolet (EUV) lithography machines, that are used in the creation of semiconductors.

The supply chain has been struggling with getting enough semiconductors for designs since late 2020 because of the COVID-19 pandemic. When COVID hit, uncertainty in some industries caused companies to reduce the number of semiconductors they wanted manufactured. When demand returned, semiconductor manufacturers had shifted capacity to applications, such as consumer electronics and computers, that were booming because of the stay-at-home orders and lockdowns.

Demand for semiconductors and semiconductor equipment is at an all time high. So much so, ASML sees chipmakers trying to acquire older chip manufacturing equipment to expand capacity to meet demand.

Additionally, companies are seeking out older equipment, such as washing machines, to salvage the chips inside. Wennink told a story about a certain industrial company doing just this and that they are not the only one doing so.

Wennink also said that utilization rates of ASML’s machines were at all-time highs not because customers are buying more equipment to stockpile but simply because they cannot keep up with demand.

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