Despite concerns over AI spending raised by DeepSeek’s low-cost model, Dutch semiconductor giant ASML saw its shares surge more than 11% after reporting strong growth for its fourth quarter earnings, reflecting strong demand for its advanced chipmaking tools.
In the fourth quarter of last year, ASML increased its net bookings, a key indicator of order demand, to 7.09 billion euros, 169% higher than the 2.63 billion euros recorded in the previous quarter. Additionally, this figure surpassed Visible Alpha’s forecast of 3.99 billion euros.
When Chinese startup DeepSeek released its R1 reasoning model, claiming to be more cost-efficient and outperform OpenAI, ASML experienced losses in share values during a global tech sell-off.
This release also raised questions about the massive spending by OpenAI and Microsoft on Nvidia graphics processing units, which are essential for training and running advanced AI models. Moreover, ASML’s high-precision extreme ultraviolet (EUV) machines, used to print advanced microchips and accounting for 3 billion euros of the company’s fourth-quarter net bookings, may face reduced demand.
However, ASML CEO Christophe Fouquet stated that low-cost AI models like DeepSeek may actually drive more demand for semiconductors and noted that there are no signs of a slowdown in demand for AI-focused chips. He highlighted that low-cost AI means more applications, which leads to more demand.
Experts have positively commented on ASML’s fourth-quarter results, noting that the report reassured the market amid concerns about DeepSeek. ASML shares closed at 646.60 euros per share on Tuesday, with one expert suggesting the shares could reach around 850 euros.
Fouquet also mentioned that demand in China may rebalance in 2025 after the surge caused by Chinese firms stocking up on chipmaking tools ahead of US restrictions on advanced semiconductor machine exports. He expects the demand ratio in China to return to normal this year compared to other markets.
