ASML Holding NV ASML CEO Christophe Fouquet anticipates growing pressure from the United States to tighten restrictions on semiconductor technology sales to China. Here’s what you need to know.
The Details: Speaking at the Bloomberg Tech Summit in London on Tuesday, Fouquet stated that the geopolitical landscape suggests the U.S. will continue urging its allies for more stringent measures.
"If you look at the geopolitical landscape, it's clear that the U.S. will continue to apply pressure," Fouquet said.
For years, the U.S. has sought to limit China’s semiconductor advancements through export controls targeting AI chips and chipmaking equipment. The Dutch government faces the challenge of managing its alliances and its commercial ties with China, given that China represents ASML’s largest market.
"A lot of the focus in China today is on mainstream semiconductors, which is very different from AI," Fouquet said.
The ASML CEO noted that much of the company’s business in China is focused on more mature chips that are not as relevant to national security concerns, rather than the advanced AI-related semiconductors that are at the heart of U.S. concerns.
ASML, which reportedly holds a monopoly on lithography machines for chipmakers, has never offered its most advanced extreme ultraviolet (EUV) machines to China. These machines are essential for producing cutting-edge semiconductors, but have been off-limits to China due to export restrictions.
The report indicates that China relies on ASML systems to accelerate development of chips as the country has been able to develop its own similar technology. Chinese demand for ASML chips have been elevated since the pandemic, but ASML expects China sales to return to more normal levels around 20% of total revenue next year.
Fouquet reportedly said at the tech summit that existing restrictions on exports have already put China 10 to 15 years behind in terms of advanced technology. The potential for further U.S. restrictions on semiconductor technology could continue to impact ASML's operations. Still, Fouquet expects the chip market to continue recovering in 2025 with 2026 forecasted to be a “growth year” for the company.
ASML Price Action: ASML Holdings shares were up 0.83% at $720.28 at the time of writing, according to Benzinga Pro.
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