The semiconductor equipment landscape is shifting dramatically, with ASM International NV reporting unexpectedly robust bookings from China in its latest quarter. This surge arrives despite ongoing U.S. export restrictions and signals potential reconfiguration of global chip manufacturing priorities heading into 2025.
ASM’s order intake reached €677.7 million ($735.6 million) in the second quarter, dramatically outpacing analyst projections of €550 million. This 14% sequential growth reverses earlier declines and points to strengthening demand across multiple markets, particularly in China where the company experienced what CEO Benjamin Loh described as “higher than normal” activity levels.
“We’re seeing clear acceleration in China-based orders that exceed our initial forecasts,” Loh told analysts during Wednesday’s earnings call. “While we maintain strict compliance with export regulations, demand for our permitted tools remains exceptionally strong as Chinese manufacturers focus on legacy node expansion.”
The company’s China revenue jumped 59% compared to the previous quarter, reaching €162.4 million and accounting for nearly one-third of ASM’s total quarterly revenue. This geographic shift comes as Chinese chipmakers intensify domestic manufacturing capabilities amid continuing technology restrictions from Washington.
Industry analysts note this uptick reflects broader trends affecting the entire semiconductor equipment sector. “Chinese fabs are aggressively building out capacity in mature nodes where they aren’t constrained by U.S. restrictions,” explains Maria Chen, semiconductor analyst at Evercore ISI. “It’s creating a bifurcated market where Chinese demand focuses on established technologies while leading-edge development continues elsewhere.”
Beyond China, ASM reported growing momentum in logic, foundry and memory segments. The company specifically highlighted rising orders for its advanced deposition technologies used in gate-all-around (GAA) transistors and advanced packaging solutions – critical components for next-generation computing applications.
Global semiconductor equipment spending is projected to reach $95 billion in 2024, according to SEMI industry association data, with further growth expected in 2025. ASM’s positioning across both mature and advanced nodes allows it to capitalize on multiple industry growth vectors simultaneously.
The company maintained its annual outlook, projecting “high-single to low double-digit” percentage revenue growth for 2024, despite ongoing macroeconomic uncertainties. Management cited the growing importance of artificial intelligence applications as a key driver, with Loh noting, “AI infrastructure deployments continue expanding beyond hyperscalers to enterprise customers, creating sustained demand for advanced logic capabilities.”
ASM’s financial performance reflects these positive trends. Second-quarter revenue reached €578.1 million, beating company guidance, while gross margins improved to 48.9%. The company’s shares climbed approximately 5% following the announcement, continuing a year-to-date gain of over 20%.
Industry experts view these results as particularly significant given the broader context of export controls targeting China’s semiconductor advancement. The Biden administration has progressively tightened restrictions on advanced chip technologies to China, yet companies like ASM continue finding growth opportunities within compliant business segments.
“What we’re witnessing is the semiconductor equipment industry’s remarkable adaptability,” says Thomas Wilson, technology analyst at Bernstein Research. “Equipment makers are navigating complex regulatory landscapes while still meeting customer demand across diverse geographic and technological segments.”
For investors, ASM’s performance highlights the nuanced reality of semiconductor equipment markets. While leading-edge technology development faces increasing geographic concentration in the U.S., Taiwan, South Korea and Europe, mature node expansion continues broadly, with China representing a major demand center for permitted technologies.
Looking ahead, management expects the current positive momentum to extend into 2025, with particular strength in advanced deposition technologies. The company’s ALD (atomic layer deposition) products remain especially well-positioned for next-generation semiconductor manufacturing processes requiring atomic-level precision.
As global chip manufacturers navigate shifting supply chains, geopolitical pressures and explosive AI-driven demand, equipment suppliers like ASM International appear poised to benefit from multiple industry growth vectors simultaneously. The challenge will be maintaining technological leadership while navigating increasingly complex export regulation landscapes.
For now, the unexpectedly strong China orders provide welcome evidence that demand remains robust across diverse market segments, giving semiconductor equipment investors reason for cautious optimism heading into 2025.
