tech
ASML shares fall after proposed U.S. export curbs target an already fragile China market
Proposed U.S. restrictions would target ASML's deep ultraviolet (DUV) lithography machine, which Chinese companies have so far been able to access.
TL;DR
- ASML shares dropped approximately 2.6% following the introduction of the U.S. MATCH Act.
- The proposed legislation aims to cut China off from chipmaking tools, including ASML's deep ultraviolet (DUV) lithography machines.
- ASML has never exported its most advanced extreme ultraviolet (EUV) lithography machines to China.
- The MATCH Act could impact ASML's DUV machines, which are used to manufacture less advanced semiconductors and have been accessible to Chinese chipmakers.
- ASML projected China to account for about 20% of total sales this year, a decrease from previous years.
- Analysts suggest that a broad ban on DUV machines could create volatility in ASML's results, potentially boosting short-term orders before restrictions take effect but impacting midterm results.
- The legislation would affect older versions of ASML's lithography tools, representing an estimated 10%-15% of overall sales, with China accounting for about 50% of that segment.
- While U.S. restrictions have previously boosted China's domestic semiconductor industry, the proposed measures could disrupt manufacturing capabilities due to reliance on ASML tools.