ASML announces new buyback program

The Netherlands-based ASML Holding NV, Europe’s largest chip maker, increased its second-quarter net profit and improved its annual revenue forecast, and announced a share buyback program of up to € 9 billion by the end of 2023. ASML’s revenue last quarter was € 4.02 billion, up from € 3.33 billion in the same period in 2020. The market consensus assumed the figure at the level of 4.09 billion eurosю

According to the company’s press release, net profit in April-July rose to 1.04 billion euros from 751 million euros in the same period a year earlier. The gross margin was 50.9% against the company’s forecast of 49%. According to the company’s forecast, in the third quarter its revenues will amount to 5.2-5.2 billion euros, with a gross margin of 51-52%. ASML said in a press release that the new share buyback program will begin on Thursday and end by December 31, 2023. It will replace the previous € 6 billion program, which runs from 2020 to 2022, under which the company bought back shares worth € 5.2 billion.

As a market leader in the microelectronics industry (manufacturing VLSI, memory chips, flash memory, microprocessors, etc.), ASML has pioneered the adaptation and implementation of Moore’s Law for the semiconductor sector. Since the company is the only global developer of EUV (Extreme UV) lithography equipment, we believe that ASML, the company has excellent potential for long-term profit growth. We highly appreciate the prospects for the development of EUV technologies, therefore we like the business of ASML.

ASML is the top supplier of lithography equipment to the global semiconductor industry. ASML has gained share in lithography to over 80% compared to <55% ten years ago. It is also the sole supplier of the next-generation Extreme Ultraviolet (EUV) imaging technology. ASML has done some acquisitions in the past that have enabled the overall margins and top-line. They acquired a supplier, Cymer, to boost the EUV program. Hermes Microvision (E-beam provider) was an acquisition that expanded ASML’s footprint in process control.