4.16.25
Sales in the first quarter of 2025 were €7.7B, slightly below the midpoint of €7.75B. Sequentially, this is a decline of €1.6B in revenue. The company guided for the second quarter to also be down, with a revenue range of €7.2B to €7.7B. Within this company total, system sales to memory customers were also down. Recall that Q4 of 2024 was the highest quarter ever for ASML system sales into the memory segment. The total sales last quarter were €2.775B. In Q1 of 2025, total sales to memory customers declined to €2.411B. While this is down, it is still the second highest quarter ever for memory.
Further summarizing what I wrote on this three months ago, I see three reasons for higher spending on lithography tools by memory companies. First, lithography capital intensity is always increasing. Second, indigenous Chinese companies entering the DRAM and NAND markets has added two significant new customers. Since these companies are new to semiconductor manufacturing, they are also inefficient. Thus, their lithography intensity is even higher. And third, the DRAM upturn in the AI segment is almost two years old. In response to this, DRAM customers have been investing more in leading-edge capacity. This new capacity is already coming out and new output will continue to ramp up as 2025 continues. I think this capacity will lead to a DRAM downturn in the second half of 2025. New memory bookings in the quarter dropped sharply. Following almost €2.8B worth in Q4. In Q1, bookings for memory were €1.57B. This is similar to the booking levels seen in Q2 and Q3 of 2024. Q4 appears to be an anomaly.
On to the conference call. They expect memory revenue in 2025 to remain strong, similar to 2024. Discussions around the recently announced tariffs are “just starting” and are “very dynamic.” With the tariff caveat, the company is sticking with their guidance of €30B to €35B in total revenue in 2025, and they continue to expect 2026 to be a growth year. They continue to hear from their memory and logic customers that demand for AI applications is strong.
– S. Hughes (short MU)