ASML CEO Anticipates Increased US Pressure on China Semiconductor Sales
ASML Holding NV CEO Christophe Fouquet has warned of growing pressure from the United States to further tighten restrictions on the sale of semiconductor technology to China. This comes as the US continues its efforts to curb China’s technological advancements.
Speaking at the Bloomberg Tech Summit in London on Tuesday, Fouquet stated that the geopolitical landscape points towards continued pressure from the US on its allies to implement stricter 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 US has been implementing export controls targeting artificial intelligence (AI) chips and chipmaking equipment to limit China’s semiconductor development. This has put the Dutch government in a difficult position, as it needs to balance its alliances with its commercial ties to China, ASML’s largest market.
Focus on Mainstream Semiconductors
Fouquet emphasized that ASML’s primary business in China centers around mainstream semiconductors, which are less relevant to national security concerns compared to the advanced AI-related semiconductors that are at the heart of US concerns. “A lot of the focus in China today is on mainstream semiconductors, which is very different from AI,” he said.
ASML’s Monopoly and Export Restrictions
ASML holds a near monopoly on lithography machines, crucial for chip production. While the company has never provided its most advanced extreme ultraviolet (EUV) machines to China due to export restrictions, China has been able to develop its own similar technology, relying on ASML systems to accelerate its chip development.
China’s demand for ASML chips has been elevated since the pandemic, but ASML expects its China sales to return to more normal levels, representing around 20% of its total revenue by next year.
Impact on ASML’s Operations
Fouquet believes that existing export restrictions have already placed China 10 to 15 years behind in terms of advanced technology. Further US restrictions on semiconductor technology could continue to affect ASML’s operations. Despite these challenges, Fouquet expects the chip market to recover in 2025, with 2026 forecasted to be a “growth year” for ASML.
ASML Stock Performance
At the time of writing, ASML Holdings shares were up 0.83% at $720.28. The potential impact of US pressure on China semiconductor sales remains a key factor to watch for ASML investors.
The ongoing geopolitical tensions surrounding semiconductor technology are expected to continue shaping the industry landscape, with ASML’s operations potentially impacted by further US restrictions. However, the company remains optimistic about the long-term outlook for the chip market.