So, no, I wouldn’t expect any big changes on that front.Sara Russo Great. Thank you very much.Operator Thank you. We will now go to our next question. And the next question comes from the line of Sandeep Deshpande from JPMorgan. Please go ahead. Your line is open.Sandeep Deshpande Yes. Thanks a lot for letting me on. My question, Peter, is about — more about latter half of this year into 2024, in a scenario where things remain like this as they are today to the end of the year, how do you see things playing out?Peter Wennink Sorry. Sandeep?Sandeep Deshpande Hello. Can you hear me?Peter Wennink Yes. I can hear you, but I hear some background noise. So, you might say, what if what we’re seeing today goes into the second half and goes into 2024?Sandeep Deshpande Into the second half, yes.
Yes, that’s correct. Yes.Peter Wennink Yes. I think, it’s just the second half, is going to be the second half. We just are in the spirit for one or two quarters more, yes. But, that said, ultimately, what drives the demand actually is the ultimate belief our customers have for 2024 and 2025. They need that capacity, yes.Now this is all driven — like I said earlier, we are not looking at a massive recessionary environment, we’re looking at a downturn, almost to say as a typical downturn situation in the semiconductor industry, which actually hasn’t happened for a last number of years, yes. The supply just exceeds the demand, and we know the demand drivers, which are driven by the high inflation rates, the consumer confidence hit as a result of it, the geopolitical uncertainties.
These are all the reasons why the end demand is now lower than what people expected.So, we’re in this classical semiconductor downcycle, whereby customers are working this up quite diligently. I mean, all reducing their output, making sure that there is a supply/demand balance for semiconductors and that will be the point where you will see that turning and then it comes — goes back up again.Now, the big question is, with what speed, at what slope is this recovery? That’s your question. Well, I don’t know, but what I do know is that nobody thinks about this massive recession, yes. And we do see that elements like, lower inflation rates will actually help the consumer confidence. We do see the growth rates in China are a bit better than we expected.
So, there are all kinds of potential positives that will drive 2024 demand that’s ultimately what we are looking at together with our customers. We have to work through this couple of quarters where we are where we are today and that could last another one or two quarters longer, but that — and given — well, if you look at ASML, look at our backlog, look at our longer lead times, that’s not a major issue to us, yes. It just probably grow next year, but where do we look at it today, yes, and I think nothing that I see today gives me high concerns that we will not go. I mean, I have a confidence that we will grow.Sandeep Deshpande I mean, one quick follow-up on that would be on EUV. I mean given the long lead times for EUV, would you not be soon having to get in the orders for EUV by the end that will ship in 2024 by — in the next couple of quarters, because otherwise you will not be able to be ready for those shipments as such, because you might have all of that in your backlog today?Peter Wennink Correct.
Correct, Sandeep. I mean, like I said, on the back half of the second half, you could say Q4-ish of next year, we still need the order as well. We have to get those orders in for over the next one, two quarters, yes. And I think that is going to be indeed something that we’re going to discuss with our customers and that’s an expression of their confidence that they need those machines by the time.So, yes, in the next couple of quarters, we’re going to see some of that and if it doesn’t come, then probably those customers have different views in a couple of quarters from now than they have today. We just don’t see at that point in time what it is, but at this moment in time that’s not the case, yes. So, I’m pretty confident that we will book those orders, but yes, you are right, we don’t have only orders yet for 2024 or 2025 for that matter.Sandeep Deshpande Thank you, Peter.Skip Miller All right.
We have time for one last question. If you were unable to get through on this call and still have questions, please feel free to contact the ASML Investor Relations department with your question. Now, operator, may we have the last caller, please?Operator Thank you. We’ll now take the last question for today. One moment please. And your last question comes from the line of Joe Quatrochi from Wells Fargo. Please go ahead. Your line is open.Joe Quatrochi Yes. Thanks for taking the questions. I just wanted to go back to the comment that Peter made on China and talking about your Chinese customers moving back to older nodes in response to the export restrictions, is that to assume that then the Chinese memory customers have got to stop taking what part of your tools?Peter Wennink Sorry, was that talked at the Chinese memory customers?Joe Quatrochi I do.
