ASML Stock Tumbles Amid €60 Billion Market Value Loss and Export Challenges

ASML, the Dutch semiconductor equipment manufacturer, has recently faced significant challenges as its stock price has plummeted, shedding over €60 billion in market value. This downturn coincides with broader shifts in the global chip market and compounded effects of export restrictions by the US and Netherlands on sales to China.

Once Europe's most valuable tech company, ASML leveraged its advanced lithography technology to maintain a leading position in the semiconductor industry. The company enjoyed substantial revenue growth over recent years, driven in part by the global semiconductor boom. However, its latest financial reports show a dramatic fall in third-quarter bookings to just €26 billion, barely half the previous quarter's near €56 billion.

ASML's net sales still exceeded expectations at €75 billion, yet their adjusted future sales forecast to between €300 billion and €350 billion for 2025 fell short of previous estimates. This decline is linked to slowing semiconductor demand and US-led export controls impacting its business with China, which has been a crucial market for ASML.

Despite robust demand for AI chips from major US tech firms, such as those developing AI models like ChatGPT, AI represents only a fraction of the total chip market. Analysts indicate that AI alone cannot compensate for weak recovery in other sectors. Concurrently, delays in chip production capacity expansions by firms like Intel and Samsung are contributing to reduced orders for ASML’s equipment.

Additionally, ASML's projected market share in China may drop to around 20% by 2025, a steep decline influenced by tightening export rules, including restrictions on mid-range products. The looming threat of further limitations on ASML’s after-sales services in China exacerbates these operational challenges.

ASML’s top executives oppose these restrictions, arguing they harm Western interests by accelerating China’s self-reliance in high-end technologies. Despite these pressures, ASML remains crucial to the semiconductor supply chain, and its future growth potential aligns with broader industry trends towards AI, energy transformation, and electrification.