What's going on?

Chipmaking equipment maker ASML reported record new orders on Wednesday.

What does this mean?

Some of ASML�s customers have been warning that demand for certain chips has slowed down, but it doesn�t seem to have impacted their relationship with the equipment maker just yet. They put in their most new orders ever with ASML last quarter, pushing up its revenue by a better-than-expected 36% from the same time in 2021 (tweet this).

And yet: the company�s now expecting that revenue to grow 10% this year, rather than the 20% it previously estimated. This, even though it thinks global trends in carmaking, high-performance computing, and the green energy transition will help prop up demand. It�s all down to accounting intricacies, really: ASML�s been skipping quality checks to get orders out to customers in good time, but it can�t count them as complete until it finalizes them on site. That means around $2 billion worth of sales probably won�t be signed off until 2023.

Why should I care?

The bigger picture: ASML needs time to think.
ASML�s most advanced systems � which cost around $160 million each � take almost 18 months to build, and demand is still significantly higher than it can keep up with. That�ll only get more severe as chipmakers follow through on their multibillion-dollar expansion plans, which might be why ASML is now thinking up ways to boost supply by 2025. Watch this space: the company said it�ll update investors later in the year.

Zooming out: Don�t forget the shortages.
Carmakers are more dependent than ever on chips and, by extension, chipmaking equipment. So the pandemic-driven disruptions of both are still taking their toll on Volvo, with the Swedish carmaker saying on Wednesday that it�s being hobbled by production issues. That caused its retail vehicle sales to fall 27% last quarter from the same time the year before, and it�s predicting that this year’s will be the same as or even slightly lower than that of 2021.