US House Panel Slams China Sales: Chip Industry Stocks Fall

Semiconductor companies including Applied Materials, ASML, and Tokyo Electron fell after a US House committee accused them of boosting China's semiconductor industry and supporting its military. The committee called for further export controls, citing the companies' sales data to Chinese state-owned and military-linked companies. ASML declined to comment, while representatives for other companies did not respond. The US Commerce Department does not have to follow the committee's recommendations, but the call to action raised fears of further export bans.

Semiconductor companies including Applied Materials, ASML, and Tokyo Electron experienced a significant drop in their stock prices following a report by the U.S. House Select Committee on China. The committee accused these companies of aiding China's semiconductor industry and supporting its military capabilities. The report highlighted concerns about potential new export restrictions on their advanced lithography machines, which are essential for producing advanced chips.

The committee's report revealed that Chinese chipmakers had purchased $38 billion of sophisticated gear legally last year, a 66% increase from 2022. This increase accounted for nearly 39% of the aggregate sales of the five top semiconductor manufacturing equipment suppliers, including ASML, Applied Materials, Lam Research, KLA, and Tokyo Electron US lawmakers push for broader bans on chipmaking tool sales to China^[2].

The committee recommended broader bans on chipmaking tool sales to China, citing the companies' sales data to Chinese state-owned and military-linked companies. ASML and KLA declined to comment, while representatives for other companies did not respond. The US Commerce Department does not have to follow the committee's recommendations, but the call to action raised fears of further export bans.

Despite the negative news, ASML shares remain up 45% year-to-date, topping the Nasdaq 100 index’s over 18% returns. On July 16, ASML reported second-quarter 2025 sales of $8.9 billion, beating expectations of $8.7 billion ASML Stock Falls As US Lawmakers Scrutinize China Dealings^[1].

The Biden administration has already restricted the Dutch government from selling its second-most advanced machines, immersion deep ultraviolet (DUV) systems, to China in 2023. The US and its allies are seeking to limit China's ability to make microchips, which are crucial for fields such as artificial intelligence and military modernization.