According to the financial report released by the Dutch atomic layer deposition (ALD) equipment giant ASM International NV, the company's order volume in the second quarter far exceeded market expectations, and the company continues to benefit from the surge in semiconductor equipment demand brought about by the epic wave of global enterprise layout of AI technology and strong demand from the Chinese market. Other semiconductor equipment leaders, such as KLA Corp (KLAC.US) and Applied Materials (AMAT.US), as well as lithography manufacturer ASML Holding (ASML.US), are also expected to fully benefit from the AI boom. The stock prices of these semiconductor equipment giants may far from stop rising.

In the financial report released by ASM International on Tuesday, the order value of semiconductor manufacturing equipment such as atomic layer deposition in the second quarter has grown by as much as 56% compared with the same period last year, reaching 0.755 billion euros (about 0.819 billion dollars). By comparison, the average analyst forecast was about 0.709 billion euros.

ASM CEO Hamid Moshayedi said in a performance statement that the increase in orders includes the steady increase in demand for semiconductor equipment related to the all-around gate-all-around (GAA) 2nm chip process technology node. Moshayedi took over as CEO in May from former CEO Benjamin Loh.

In terms of performance expectations, ASM International's revenue outlook for the second half of the year exceeded market expectations. The company expects the total revenue scale in the second half of the year to increase by about 15% compared with the first six months of 2024. Previously, the company expected an increase of 10% or more, while analysts generally expected an increase of 10%.

After the latest performance report was released, the price of ASM International's American Depositary Receipt (ADR) rose sharply by 8.4% in Tuesday's U.S. trading, its largest intraday gain in three months. This year, under the full stimulus of the AI boom, global funds have poured into buying AI chip leader Nvidia (NVDA.US) as well as semiconductor equipment giants such as ASM International, KLA Corp, and Applied Materials. The price of ASM International's ADR has risen by as much as 50% since 2024, while the rise in Euro stocks during the same period is also as high as 50%.

This Almere-based company has been balancing the weak market for wafer manufacturing equipment with demand for the so-called "all-around gate-all-around" technology, which can improve equipment performance and is vital to AI chips.

ASM CEO Moshayedi said that the GAA chip process node, focused on the 2nm and below process, is expected to enter a large-scale development and production phase in 2025. "We expect this to be ASM International's latest and most powerful revenue driver," Moshayedi said.

ASM International emphasized in its financial report that strong demand from China was one of the main highlights of the second quarter report. The company also said that although sales in the Chinese market were "very strong" in the second quarter, overall revenue from Asian countries was lower than in the first quarter of this year.

ASM International, which focuses on the ALD field, is one of the biggest beneficiaries of the AI boom.

ASM International, based in the Netherlands, is an absolute leader in the field of atomic layer deposition (ALD) semiconductor equipment, with a market share far ahead of other semiconductor equipment manufacturers. In the process of manufacturing AI chips by chip makers such as TSMC, ALD equipment undoubtedly plays an important role, and the ALD technology link is very important for the manufacture of AI chips with high integration and more complex structures. In addition, ALD is also important for the transition to the all-around gate-all-around (GAA) technology and the demand for accurate threshold voltage tuning.

It is reported that Taiwan Semiconductor (TSM.US), known as the "chip foundry king", as well as the old chip giant Intel(INTC.US) and South Korean chip manufacturer Samsung Electronics are all core customers of ASM International, and the company has very close cooperative relations with TSMC and Intel. ASM International helps these top chip manufacturers achieve technological progress and production efficiency improvement by providing the most advanced film and deposition equipment and related core technical support.

Against the backdrop of the surge in global demand for AI chips, TSMC, Samsung Electronics and other chip makers operating at full capacity of 5nm and below high-end processes have no choice but to increase their AI chip production capacity, which means they will have to spend huge sums of money to purchase core semiconductor equipment such as ASM International's atomic layer deposition equipment, ASML Holding's EUV lithography machines, and chip yield monitoring machines and etching machines.

Recently, some Wall Street investment institutions have issued bullish research reports on ASM International. Jefferies Financial is very bullish on ASM International, the leading player in the ALD field benefiting from the AI trend. It gives a target price of up to 740 euros within 12 months (latest closing price is 693 euros).

Stifel recently released a research report covering ASM International for the first time, giving a "buy" rating and a target price of up to 800 euros within 12 months. Stifel's analysts believe that ASM is the absolute leader in the most advanced deposition technology of atomic layer deposition. The organization believes that ASM International will continue to consolidate its market leading position since 2008.

Not only ASM International, these semiconductor equipment giants are also gearing up for a new round of rise.

In 2023, the ChatGPT will be popular globally, and in 2024 the Sora text-to-video large model will be released along with NVIDIA's unparalleled performance in selling AI-related tools, which may indicate that human society will gradually enter the age of AI starting from 2024. After experiencing a "golden age" during the PC era and the smartphone era, semiconductor equipment giants such as KLA Corp, ASML Holding and Applied Materials will begin a new "golden age" in the wave of global AI deployment since 2024.

Whether it is the AI chip production capacity of Taiwan Semiconductor, or the HBM production capacity of storage chip giants such as Micron, Samsung and SK Hynix, all are inseparable from the semiconductor equipment manufacturers that are crucial to various aspects of the chip manufacturing process. Therefore, ASML Holding, Applied Materials and other semiconductor equipment giants wield the "lifeline of chip manufacturing".

In the US stock market, compared with chip giants such as NVIDIA (NVDA.US), Broadcom (AVGO.US) and Micron (MU.US) that global investors are focusing on, the leaders in the semiconductor equipment field are the "low-key winners" benefiting from the unprecedented craze of global enterprise layout in AI. Among them, Applied Materials, a semiconductor equipment provider focusing on multiple important chip manufacturing processes such as atomic layer deposition (ALD), chemical mechanical polishing, wafer etching, and ion implantation, has experienced a long-term bullish trend and its stock price has hit new highs since 2023, with a cumulative increase of up to 146%.

Wells Fargo & Co, a Wall Street commercial banking giant, recently released a research report stating that semiconductor equipment giants KLA Corp and Applied Materials, as well as lithography equipment manufacturer ASML, are among the most favored semiconductor equipment stocks expected to benefit from the AI boom by Wells Fargo & Co.

Another Wall Street giant, Bank of America, recently released a research report stating that the current chip industry recovery cycle began in the late 2023, currently only in the third quarter, which means that the strong recovery trend may continue until mid-2026. Bank of America analysts pointed out that after the chip industry experienced an extremely sluggish downturn cycle, it usually enters an upswing cycle lasting up to 10 quarters, and this pattern has just begun.

Bank of America mentioned in the research report that investors should focus on three major investment themes in the chip industry: cloud computing, automotive chips, and "complexity." Among them, in the theme of complexity, Bank of America stated that the increasing complexity in the chip manufacturing field will fully support the continuous rise in the valuations of chip manufacturers and semiconductor equipment suppliers. ASML Holding, which is one of the top semiconductor equipment giants, as well as KLA Corp, Applied Materials and others, undoubtedly belong to the important players of this investment theme of complexity.

Wells Fargo & Co reiterated its "shareholding" rating on KLA Corp and a target price of up to $950, which means a potential increase of up to 18% within 12 months; The bank also reiterated its target price of $280 for Applied Materials, which means that the potential upward space for the stock price of Applied Materials, which has repeatedly hit a new high, is up to 27% in the next 12 months; The bank also raised its target price for ASML to $1,185, which means that the lithography equipment giant ASML, which has hit a new high this year, can still rise by nearly 29%.