ASML Holding NV shares fell as the prospect of more severe US restrictions on its business in China offset growth in the Dutch firm’s order intake last quarter.
The US is targeting ASML, which has a monopoly on making the machines that produce the most advanced semiconductors, as it ratchets up pressure to stem Chinese advances in the semiconductor industry.
The shares fell even as the company reported that bookings rose 54 percent in the second quarter from the previous three months to 5.57 billion euros (US$6.09 billion), beating estimates.
Photo: EPA-EFE
“The geopolitical angle, however, is likely to be in more focus today than results, with Bloomberg reporting the US is pressing for additional restrictions on ASML,” Citi analyst Andrew Gardiner said in a note. “Pressure is building to restrict service activity on the installed base.”
ASML shares dropped as much as 7.7 percent to 903 euros in Amsterdam, the most since October 2022.
ASML expects sales in the current quarter of between 6.7 billion euros and 7.3 billion euros. The company confirmed previous guidance of flat sales this year before returning to strong growth next year.
Previous US-led chip measures targeting ASML’s exports to China did not dent demand from the Asian nation.
China accounted for nearly half of ASML’s revenue in the second quarter, and sales to the Asian nation rose by 21 percent from the previous quarter. Beijing has been buying up unrestricted older kit to make more mature types of semiconductors.
ASML is increasingly driven by demand for high-powered chips needed for artificial intelligence (AI) applications.
“We currently see strong developments in AI, driving most of the industry recovery and growth, ahead of other market segments,” ASML chief executive officer Christophe Fouquet said in a statement.
Impressive results from some of ASML’s biggest customers helped support demand for the company’s equipment. Taiwan Semiconductor Manufacturing Co (台積電) last week said that its second-quarter sales grew at their fastest pace since 2022, buoyed by the AI boom that is fueling data center investment worldwide.
Sales to Taiwan rose by 290 million euros in the quarter as demand for advanced equipment inched up, it said.
Last quarter was ASML’s first under Fouquet, who took over when Peter Wennink retired in April. He has been trying to balance a US push to tighten export controls for China with the need to continue to sell equipment in the company’s biggest market.
US pressure to slow Beijing’s advances in making semiconductors led the Netherlands to ban exports to China of ASML’s second-most advanced category of machinery, immersion deep ultraviolet lithography machines, at the start of the year.
However, ASML continues to service machines that were bought before the restrictions were in place. The administration of US President Joe Biden has told allies that it is considering using the foreign direct product rule, which lets the US impose controls on foreign-made products that use even the tiniest amount of US technology, if such practices continue.
The company has said as much as 15 percent of sales in China this year would be affected by the export control rules imposed in January.
ASML has never been allowed to sell its most-advanced extreme ultraviolet technology to China.
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