One way to track the speed of the AI boom is to follow the hardware supply chain. Nvidia is the classic example: As AI companies build out data centers, they’re buying up billions of dollars of GPUs each month, turning Nvidia into the most valuable company on earth. But Nvidia has suppliers too, and looking at them can give us an even longer-term view of the market.
That’s why we care about ASML, a Dutch photolithography company that has become a key linchpin for the semiconductor industry. ASML is the sole supplier of the EUV equipment needed to make cutting-edge chips, making it a central supplier for the entire industry. When ASML does well, it’s because companies are expecting to sell a lot of semiconductors.
And based on the quarterly earnings released Wednesday morning, the company is doing very well indeed.
The topline figure is 32.7 billion euros in net sales, which is a lot of money by any standard. But for our purposes, the most important figure is “new bookings,” which represent the new orders that came in this quarter. Looking at those orders tells us how much capacity chip manufacturers think they’ll need, based on the orders they expect from data center buildouts in the years to come.
By that metric, the AI infrastructure boom is still going strong. Last quarter, ASML brought in 13 billion euros’ worth of new orders, a new record for the company and more than double the orders that came in the quarter before.
In an earnings statement, ASML CEO Christophe Fouquet made it clear the extra demand was coming from AI.
“In the last months, many of our customers have shared a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand,” Fouquet wrote. In non-CEO English, that means their customers expect AI labs will really need all the data centers they’re building, and they’re spending money now so they can be ready to supply the chips.
To be clear: None of this is guaranteed to happen. The future is unwritten! It may be years before all those orders are filled, and some clients may pull out before delivery time. The dreaded Zitron predictions could still come true and bring it all crashing down.
But if you were waiting for companies to back-pedal on the trillions of dollars in projected infrastructure spending… you may be waiting for a while.
