Why Did Advanced Energy Industries Plunge 12.03%? Tariffs Hit Semiconductor Sector

On April 7, 2025, Advanced Energy Industries experienced a significant drop of 12.03% in pre-market trading, reflecting a notable decline in investor sentiment.

Advanced Energy Industries, a key player in the semiconductor equipment sector, has been impacted by recent tariff announcements. The U.S. tariffs, effective from April 5, 2025, impose a 10% baseline rate on most imports, with higher rates for goods from 83 countries, including EU members, starting April 9. Semiconductor manufacturing equipment is notably absent from the list of exempted products, indicating that it remains subject to these new tariffs.

Despite the tariff challenges, European and Japanese semiconductor equipment companies have shown relative resilience. ASML, a Netherlands-based manufacturer of advanced lithography tools, saw its stock fall by about 9.5 percent, while the Philadelphia Semiconductor Index (SOX) dropped approximately 16.7 percent at its lowest point. This suggests continued investor confidence in the essential nature of ASML’s equipment in semiconductor manufacturing.

Other global equipment firms, such as ASM International and Tokyo Electron, also experienced moderate declines. In contrast, U.S.-based companies like Applied Materials, Lam Research, and KLA Corporation faced more significant losses. This muted market response for EU and Japanese equipment makers highlights their global significance and the likelihood that U.S. firms will continue to source vital tools from these suppliers, tariffs notwithstanding.