ASML Holding NV (ASML), a leading provider of lithography equipment for the semiconductor industry, saw its shares plummet by 2.22% to $661.43 at market close on Wednesday following Donald Trump’s victory in the 2024 U.S. presidential election. This decline is attributed to the market’s apprehension over renewed trade tensions and potential tariffs on Chinese goods.
Trump’s campaign promises, including a proposed 60% tariff on Chinese goods and a universal 10% tariff on all imports to the U.S., have instilled anxiety among global technology companies like ASML. This is because ASML’s advanced lithography machines are crucial for semiconductor production worldwide, and its products are already impacted by existing U.S.-China trade policies.
ASML, headquartered in the Netherlands, generates a significant portion of its revenue from selling its equipment to Chinese companies. The prospect of increased trade friction raises substantial uncertainty over the future of these sales. The potential for additional restrictions on U.S. companies doing business with Chinese firms under Trump’s administration could also indirectly harm ASML. This is because if U.S.-based tech giants face obstacles in the Chinese market, their demand for advanced lithography machines from ASML could diminish.
The current situation adds to the growing concerns over the shift in global tech supply chains. As companies re-evaluate their global expansion plans and sourcing strategies, the potential for a more fragmented market could complicate ASML’s growth strategy in the long term.
Market analysts at JPMorgan Chase & Co have highlighted that Trump’s proposed tariffs are likely to be a direct headwind to global technology trade, potentially impacting companies like ASML more acutely than other sectors. ASML’s success hinges on a stable global market and free trade, making the return of protectionist trade policies under Trump’s administration a major concern for the company’s medium- to long-term outlook.
ASML’s share price has faced significant fluctuations over the past year, reaching a 52-week high of $1,110.09 and a 52-week low of $633.80. The current decline reflects investor sentiment regarding the uncertainties brought about by Trump’s victory and the potential impact on ASML’s business.
