ASM International Warning: Early Red Flag for Chip Demand—AI Boom Safe, but Is a Slowdown Creeping In?

ASM International, the Dutch supplier of semiconductor equipment, jolted markets Tuesday after trimming its full-year outlook, citing weaker-than-expected demand in the fourth quarter. Shares fell more than 5% in early Amsterdam trading to €488.50 and are down about 13% this year. The stock trades in the U.S. over-the-counter under the ticker ASMIY.

The company now expects second-half revenue to be 5% to 10% lower than the first half at constant currencies, a sharp shift from expectations of a stronger finish to 2025. Full-year revenue growth will likely come in at the bottom of its previously guided 10% to 20% range. ASM also said bookings in the second half would fall below a one-to-one book-to-bill ratio, signaling softer momentum. Analysts at ING noted the disappointment but stressed the weakness stems from order timing in advanced logic markets rather than structural issues.

Why does this matter? ASM International is seen as one of the earliest barometers of wafer-fab equipment demand. Its deposition tools—used in atomic layer deposition and epitaxy—sit at the cutting edge of semiconductor production, meaning changes in its order book often signal broader shifts in capital spending by leading chipmakers like

The warning is notable not because it signals a possible peak for technology but because it interrupts what had been an unbroken stream of good news. Semiconductor shares have rallied sharply this year on relentless demand for AI chips, with Nvidia’s blockbuster announcements helping propel the broader market to record highs. Investors have become accustomed to positive headlines—from supply shortages in high-bandwidth memory to surging capital commitments for AI data centers. Against that backdrop, ASM’s more cautious near-term message is jarring. It won’t undo the structural growth story, but it could give investors reason to pause and reassess positioning after a powerful run.

The softness reflects specific challenges. Logic and foundry orders—critical for the most advanced integrated circuits used in smartphones, PCs, and AI systems—came in lighter than expected. Demand in the power, wafer, and analog markets was also sluggish, highlighting that not all semiconductor end-markets are moving in sync. Analysts at UBS pointed to both Intel and Samsung as likely drivers, with Intel slashing its workforce and paring back investment plans in Europe, and Samsung reporting a fourth consecutive quarter of weaker semiconductor earnings due to export curbs and slower HBM shipments.

Still, the company stressed the weakness is temporary. ASM confirmed its third-quarter guidance and reiterated its long-term outlook. The company now targets revenue to exceed €5.7 billion by 2030, supported by the structural growth of the semiconductor industry, which CEO Hichem M’Saad said is on track to reach $1 trillion by decade’s end. Gross margins are projected to stay in the 47% to 51% range, while free cash flow should top €1 billion. Analysts at JPMorgan noted that while consensus estimates for 2025–26 will likely be revised lower—by about 4% on sales and 6% on earnings—the longer-term trajectory remains intact, with AI and technology transitions underpinning growth.

The timing of the warning is also critical. It comes just hours before Micron Technology reports fiscal fourth-quarter earnings. Sentiment on Micron (MU) is extremely bullish, with Wall Street anticipating strong results on the back of tightening DRAM and NAND supply, rising high-bandwidth memory demand, and expanding margins. Micron’s report will likely overshadow ASM’s announcement, but the juxtaposition highlights the market’s bifurcation: near-term caution on capex equipment versus surging optimism on memory producers riding the AI wave.

For investors, ASM’s revised guidance underscores two themes. First, the semiconductor cycle remains uneven, with pockets of strength in AI and memory offset by softer demand in other areas. Second, even leaders in deposition equipment are not immune to the timing of customer orders, geopolitical trade frictions, and tariff-driven uncertainty. ING analysts argued that long-term transitions—from smaller geometries to more complex packaging—remain firmly in place and will drive ASM’s growth post-2026.

In other words, ASM International’s news is not a harbinger of doom for technology. The company is still expanding, margins are healthy, and its tools are vital for next-generation chips. But after months of unencumbered rallies and celebratory headlines, a guidance cut from a trusted early indicator is bound to spark reflection. If nothing else, it reminds markets that the path to a trillion-dollar semiconductor industry is unlikely to be a straight line.