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BEIJING, April 20 (TMTPOST) —Chip tech giant ASML reported revenue of 6.746 billion ($7.39 billion) euros in the first quarter of 2023 on Wednesday, which was a fourth consecutive quarter of growth, up 91% from the same period last year and up 5% from the fourth quarter of 2022.

The world"s only manufacturer of EUV lithography reported the net profit of 1.956 billion euros ($2.1 billion) in the first quarter, up 181% year on year.

Netherlands-based ASML plans to sell more DUV products to the Chinese market, although the Dutch government is considering tightening export controls on lithography machines to China. In a video accompanying ASML"s earnings presentation, Roger Dassen revealed that 20 percent of the company"s order backlog came from China, which accounted for just 8 percent of its first-quarter revenue.

ASML"s Chief Executive Officer Peter Wennink confirmed that orders from customers in mainland China accounted for 45 to 50 percent of DUV"s backlog on a conference call with analysts, adding that demand from Chinese customers for the mature process capacity that DUV lithography is primarily used for is sustainable.

Wennink visited China and attended a meeting with Chinese Minister of Commerce Wang Wentao on March 28. Wang expressed the hope to work with ASML to maintain the stability of the global semiconductor industry chain and supply chain. The two sides also exchanged views on ASML"s development in China.

The US government announced semiconductor export controls to China on October 7 last year. ASML later said US semiconductor export controls to China would affect 5 percent of outstanding orders. The Netherlands announced new regulations for the export of lithography machines in March of this year.

"After the US upgraded semiconductor export controls to China on October 7 last year, almost all of our current Chinese customers have changed their technology roadmap to produce mature processes of 20 nm or less to avoid being restricted by export controls," said Wennink. He also added that Chinese customers is turning to purchase NXTS: 1980Di, because the model can already meet mature process requirements. He further stated that it is no longer relevant to discuss the impact of the US semiconductor export controls on the 5% backlog of orders. It"s more important to focus on the Dutch government"s restrictions in the future, which are not expected to be affected by NXT: 1980Di.

In response to the impact of Chinese memory makers not having access to lithography equipment, Winnink also said on the call that NAND (flash memory) can be stacked in 3D without the need to pursue advanced processes, and that DRAM (dynamic random access memory) makers would have a problem.“They [Chinese DRAM makers] won"t have much of a problem today, but when they plan their road map for the next three to four years, they still need to solve the equipment problem, and they can either come up with a solution or stay where they are today," said Winnink.

Mainland China was ASML"s fourth-largest market in the first quarter, contributing €427 million ($468 million) in sales, or 8% of total lithography machine sales. Notably, the U.S. market accounted for 15% of ASML"s revenue in the quarter, up from 7% in the fourth quarter, making the U.S. ASML"s third-largest market for the first time in decades. China"s Taiwan and South Korea were the first and second largest markets, accounting for 49% and 26% of sales revenue respectively in the quarter.