On Tuesday, ASML, a major player in the computer chip equipment industry, delivered a sobering forecast as it announced its third-quarter earnings, leading to a significant decline in its stock prices—the steepest single-day drop for the company since 1998. The Dutch firm, known for its advanced lithography machines utilized in semiconductor fabrication, predicted sluggish sales and bookings for 2025, attributing the downturn to ongoing fragility across various segments of the semiconductor market.
Despite a surge in demand for chips related to artificial intelligence, ASML’s forecast indicated that many components of the semiconductor landscape remain in a prolonged slump, compelling manufacturers of logic chips to defer orders and prompting memory chip producers to proceed cautiously with new capacity investments.
ASML, which ranks as Europe’s largest tech enterprise, serves a range of high-profile clients, including TSMC, Intel, and Samsung. During a premature earnings announcement—deemed a “technical error” by company representatives—the CEO, Christophe Fouquet, communicated expectations for net sales in 2025 to fall between 30 billion to 35 billion euros, a range that is at the lower end of previous predictions.
The space for semiconductor shipments is expected to remain constrained in 2025, reflecting a tendency among clients to adopt a more cautious approach in their procurement strategies. This uncertainty was underscored by trading interruptions for ASML’s shares, which ultimately closed down 16% at 668.10 euros.
Although ASML reported a net profit of 2.1 billion euros on revenues of 7.5 billion euros for the quarter—slightly exceeding analysts’ projections—its bookings of 2.6 billion euros sharply contrasted with market expectations, which had ranged from 4 billion to 6 billion euros.
Analysts had noted that ASML’s outlook represented a significant deviation from earlier optimistic projections voiced just weeks prior, which suggested that the company viewed the lower end of its 2025 sales forecast as conservative. The news of Intel’s budget cuts and diminishing memory chip prices had already contributed to ASML’s decreased stock value in the summertime.
Analyst Michael Roeg from Degroof Petercam anticipated that ASML’s warnings might set off ripples throughout the semiconductor sector but recognized that demand for chip manufacturing equipment remains steady, regardless of weaker end markets for chips. Notably, ASML’s sales to the Chinese market soared to a record 2.79 billion euros, making up 47% of the total sales in the quarter. While U.S.-led sanctions restrict ASML from supplying its most cutting-edge technology to China, Chinese manufacturers have increasingly invested in older generations of chip production equipment.
Overall, while the immediate future seems fraught with challenges, ASML’s stronghold over the lithography equipment domain remains unshaken, given the ongoing global competition in semiconductor manufacturing and the long-term importance of chip technology.