Dutch chip equipment maker ASML forecast a jump in 2023 revenue as the semiconductor industry predicts there will be a reacceleration of growth in the second half of this year.

ASML is one of the world’s most important companies in the chip supply chain. It produces machines that are required to make the world’s most advanced chips.

For the fourth quarter of 2022, ASML’s net sales rose more than 29% to 6.4 billion euros ($7 billion), it said Wednesday. For the full year, net sales came in at 21.1 billion euros, a more than 13% year-on-year rise. However, full-year net income actually declined more than 4% to 5.6 billion euros.

ASML forecast its net sales for 2023 to grow over 25% compared to 2022.

“When we look at the state of the industry today, we are not insulated from … recessionary fears or high inflation or high interest rates, that’s also clear. And then we see the effect of this in the business of our customers,” ASML CEO Peter Wennink told CNBC.

ASML’s machines are purchased by companies such as Intel and TSMC, which actually manufacture the chips that go into end products such as laptops or smartphones. Wennink said that there has been rising inventories of chips related to consumer products as demand for such electronics is “not very good.”

But he said that ASML’s customers believe this will be “short-lived” and are therefore not canceling orders.

“Most of our customers tell us that they expect a recovery in the second half of this year,” Wennink said.

“If you then take into consideration that the average lead time of our tools is … let’s say a year-and-a-half-to-two years and when you look at the relatively short expectations … of a potential recession, then customers are of course not canceling any orders — because they could find themselves in the back of the queue when this thing turns up again.”

Companies like TSMC and Intel have been ramping up their capacity globally, particularly as the U.S. and Europe attempt to bring chip manufacturing closer to home. TSMC is set to open two semiconductor plants in Arizona, for example.

ASML makes a tool called an extreme ultraviolet (EUV) lithography machine, required to make the most advance chips in the world, such as those manufactured by TSMC and Samsung, that go into products such as Apple’s iPhones.

It is the only company in the world able to produce these machines and as a result, it has been dragged into the technology battle between the U.S. and China. The U.S. is worried that if ASML ships the machines to China, chipmakers in the country could begin to manufacture the most advanced semiconductors in the world, which have extensive military and advanced artificial intelligence applications.

Since 2018, it appears the U.S. has put pressure on the Dutch government to stop ASML shipping EUV machines to China. ASML has never shipped the tool to China.

The U.S. introduced sweeping export restrictions aimed at cutting off China from key chips and semiconductor manufacturing equipment. ASML told U.S. employees to stop servicing Chinese customers as a result.

This month, Mark Rutte, prime minister of the Netherlands, traveled to Washington to meet with U.S. President Joe Biden. At this point, it is unclear if the U.S. is pushing for a total ban on ASML shipping equipment to China.

Rutte told CNBC last week on the sidelines of the World Economic Forum in Davos, Switzerland, that he hopes the issue will be resolved in “a couple of months, maybe even sooner.”

“I think we can get there in a way in which it can be done in an amicable manner, including with the countries whom you don’t want to use the high-end technology and defense systems,” Rutte told CNBC.

For now, ASML can ship older tools called deep ultraviolet (DUV) lithography machines to China, but not its more EUV systems. ASML CEO Wennink said China accounted for around 15% of sales in 2022 and will be at a “similar” amount this year.

Ultimately, he said that the situation is for governments to resolve.

“It’s not just between the Dutch and Americans, it involves other European countries, it involves Asian countries, so it’s a complex situation,” Wennink said.

“It is up to them [governments]. I just have to follow what comes out.”

– CNBC’s Silvia Amaro contributed to this report.