ASM International: Navigating Export Restrictions, Targeting Growth

ASM International NV, a leading global semiconductor equipment manufacturer, recently announced its financial targets for 2025, maintaining its revenue projection of €3.2-3.6 billion despite new U.S. export restrictions on China's semiconductor industry. This article explores how ASM International is navigating these challenges and focusing on growth opportunities.

The U.S. government's updated export regulations, announced on December 2, 2024, include restrictions on semiconductor equipment applications to China. ASM International, a key player in this market, acknowledges the impact of these restrictions but remains confident in its ability to adapt. The company expects a decrease in China sales in the second half of 2024 and a further moderate decrease in the first half of 2025 compared to the second half of 2024. However, ASM International believes that for FY 2025, China sales will account for a range of low to high 20s percentage of total ASM sales.

ASM International's strategic focus on Gate-All-Around (GAA) and High-Bandwidth Memory (HBM) technologies positions it well to mitigate the impact of new U.S. export restrictions. In Q3 2024, ASM reported a 30% increase in new orders, driven by strong demand for these technologies. GAA and HBM are crucial for advanced AI, logic/foundry, and DRAM applications, which are expected to grow despite geopolitical tensions. ASM's investment in these technologies ensures it remains a key player in the global semiconductor market, regardless of export restrictions.



While the new U.S. export controls are expected to impact other segments and equipment categories in which ASM is not active, the company anticipates indirect impacts on its business. It is too early to predict the exact nature of these impacts, but potential spillover effects from these restrictions should be considered. For instance, if other semiconductor equipment manufacturers face supply chain disruptions due to the export controls, it could lead to increased demand for ASM's products as customers seek alternative suppliers. Conversely, if the controls negatively impact ASM's competitors, it could lead to increased competition and potential price reductions. Additionally, if the export controls lead to a slowdown in the broader semiconductor industry, it could indirectly affect ASM's business.

ASM International's ability to adapt its business strategy and operations to comply with the new U.S. export regulations is crucial for its long-term success. The company's diversified portfolio, strong demand for GAA and HBM technologies, and focus on emerging growth opportunities, such as AI-driven demand, ensure it remains a robust investment.

In conclusion, ASM International NV is navigating the challenges posed by new U.S. export restrictions while maintaining its financial targets for 2025. The company's strategic focus on GAA and HBM technologies, along with its ability to adapt its business strategy, positions it well for long-term growth and success in the global semiconductor market. As investors, we should monitor ASM International's progress and consider its enduring business model and robust management when making informed investment decisions.