Taiwan Semi Supplier ASML Reiterates Outlook As Biden's Latest Semiconductor Embargo On China Kicks In

On Monday, ASML Holding N.V. ASML said it does not expect the Biden administration’s latest semiconductor sanctions on China to affect its business in 2024.

On Monday, the U.S. government updated its advanced computing and semiconductor manufacturing equipment rule to include additional restrictions on suppliers’ export of chip manufacturing technology. The regulations were effective immediately.

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Biden’s administration’s third crackdown on China’s semiconductor industry targeted advanced memory chips and chipmaking tools. However, due to its agreement with the U.S., the Netherlands was exempted from the U.S. sanctions on China, which posed a relief for ASML.

ASML reiterated the fiscal 2025 total net sales outlook of 30 billion euros-35 billion euros. The company expects its China business (net system sales plus net service and field option sales) to be around 20% of its total net sales for fiscal 2025. China accounted for 50% of Microchip’s fiscal 2024 net sales, as per Reuters.

ASML also reiterated the 2030 annual total net sales of approximately 44 billion euros-60 billion euros as recapitulated during its Investor Day on November 14, 2024.

ASML chief Christophe Fouquet had previously admitted canvassing from the U.S. to restrict chip technology sales to China. 

The company is a leading manufacturer of advanced lithography machines, which is integral for contract chipmakers like Taiwan Semiconductor Manufacturing Co TSM for making advanced artificial intelligence chips for Nvidia Corp’s NVDA AI processors and chips for Apple Inc AAPL iPhones.

On October 15, ASML stock plunged above 16% upon the accidental release of the third-quarter print. It reported net sales of 7.50 billion euros, topping analyst estimates of 7.12 billion euros, with a gross margin of 50.8%. The net bookings were 2.6 billion euros.

ASML projected fourth-quarter net sales of 8.8 billion euros-9.2 billion euros with a gross margin of 49%-50%. The company reiterated fiscal 2024 net sales of around 28 billion euros.

Price Action: ASML stock is down 0.49% at $708 premarket at last check Tuesday.

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Photo via ASML