Shares of Europe’s second-biggest company are crashing on soft semiconductor demand
ASML’s third-quarter bookings were half of what analysts expected, and its share of business in China is coming under pressure.
Semiconductor-equipment supplier ASML accidentally released an underwhelming earnings report a day ahead of schedule, sending shares dropping by more than 15.6% — its biggest daily drop since 1998.
The key misstep, in the market’s eyes: the Dutch-based firm’s third-quarter order bookings were less than half of what Wall Street expected, coming in at just €2.6 billion, while its guidance for net sales in 2025 was also trimmed.
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ASML stands at a choke point for the semiconductor industry, upstream of the fabrication plants that make the end product. Simply, the company is the key facilitator for chipmakers to make chips. The company’s unique place in the semiconductor ecosystem — coupled with the fact that nearly half of its sales are to China — has attracted political scrutiny and export restrictions imposed by the US and Dutch governments. CFO Roger Dassen said that sales to China would account for roughly 20% of its total revenue next year, a substantial drop-off.
And outside of AI-linked demand, the appetite for semiconductors doesn’t look too strong.
“While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover,” said President and CEO Christophe Fouquet. “It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness.”
