Dutch semiconductor giant ASML emerges as Europe’s AI champion after hitting record high

Europe’s most valuable technology company is on pace for its best week in more than a year, set for a 16% gain after earnings that offered one of the strongest signs yet that its cutting-edge machines — seen as a bellwether for the semiconductor industry — are back in high demand. 

“Nobody was expecting orders to come back so fast. The answer to that is in the high bandwidth memory business, and all this is driven by AI,” said Oddo BHF analyst Stephane Houri. “If you want to see some impact of AI in the numbers of ASML, this is where it is.

A resurgence in memory chipmakers’ spending commitments was key to lifting ASML’s bookings to a record in the fourth quarter. That was helped by a demand recovery around smartphones and computers, which require chips to store information. 

The need for high-performance memory chips — a bottleneck in realizing full AI potential, according to ASML CEO Peter Wennink — also adds urgency for chipmakers to book extreme ultraviolet (EUV) lithography systems, a fundamental building block of modern chip manufacturing made by ASML. It normally takes the company between 12 to 18 months to deliver an order of its flagship EUV system.

“There was an element of additional demand that even ASML did not quite expect,” said Societe Generale analyst Alexander Peterc. And that’s driven by “surging demand for AI infrastructure,” he added.

AI systems need specialized chips that can process vast amounts of data. Nvidia Corp.’s technology, manufactured using ASML’s machines, has dominated the field — the California-headquartered company’s stock more than tripled in 2023 and has continued to outperform. 

In contrast, ASML spent much of 2023 contending with a slowdown in orders from some of its largest customers,…