ASML Holding has reported a 241% surge in year-on-year profits after the global chip shortage put its lithography machines in high demand among semiconductor suppliers.

The Dutch-headquartered multinational reported net Q1 income of €1.33bn on revenues of €4.36bn, exceeding the expectations of analysts.

For the three months ended 4 April, ASML sold 73 new lithography units – hulking machines that fire beams of light onto a wafer to create a blueprint for a chip's circuitry. ASML is the only supplier of the most advanced Extreme Ultraviolet (EUV) lithography machines, which are required to manufacture the latest and most powerful processing circuitry with the smallest gate sizes.

These and other kinds of lithography machine are essential for semiconductor manufacturing and ASML supplies all the world's leading chipmakers including TSMC, Intel and Samsung.

Net sales were up 79% year on year, making ASML one of the few winners from the chip shortage plaguing the automotive industry and consumer electronics market.

Soaring demand and shrinking supply in semiconductors because of Covid-19, severe weather and factory fires have forced automakers including Ford, General Motors and Hyundai to halt or interrupt production of cars and trucks.

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In response, chip manufacturers have unveiled tens of billions of dollars in investment to expand capacity and ramp up production. Last week the White House earmarked $50bn for semiconductor research and manufacturing in a bid to increase domestic supply.

As the dominant supplier of lithography machines, ASML is likely to be a beneficiary of these investments.

"Compared to three months ago, we are seeing a significant increase in demand across all market segments and our product portfolio," said ASML President and CEO Peter Wennink. "The build-up of the digital infrastructure with secular growth drivers such as 5G, AI and High-Performance Computing solutions fuels demand for advanced and mature nodes in logic as well as memory."

The Veldhoven-headquartered company expects Q2 net sales of €4bn to €4.1bn and a gross margin of around 49%.

It now forecasts year-on-year revenue growth for 2021 to increase "towards 30%".

Despite its booming sales the company could lose business as a result of the US-China trade war. China is ASML's third-largest market behind Taiwan and South Korea. However, the Dutch government, under pressure from the US, has banned ASML from selling its newest hardware to China.

ASML could face further restrictions that prevent it from shipping its older machines to China in future.