Summary: ASML, the leading manufacturer of deep ultraviolet (DUV) immersion lithography machines, saw its shares decline on the first trading day after U.S. lawmakers proposed legislation that could tighten export rules affecting sales and servicing to China. The proposal, if enacted by the United States and applied by the Netherlands, could represent the first set of fresh restrictions on ASML since September 2024 and has prompted a range of analyst estimates on how much revenue and earnings might be at risk.
Shares traded in Amsterdam opened lower, falling as much as 4.7% intraday before recovering somewhat. By 1100 GMT the stock was 4.1% down at 1,114 euros. ASML did not provide a comment and the Dutch government said it was not in a position to comment on proposed U.S. legislation.
The proposed U.S. measure would, according to analysts, block both the sale and the servicing of ASML’s DUV immersion lithography tools to Chinese customers if it is enacted in the United States and then enforced by the Netherlands. ASML is the dominant supplier of these specific tools used in chip circuitry production, although competition exists from Japan’s Nikon and China’s SMEE.
In response to the proposal, Citi analysts wrote: "We view this prospect negatively." Market selling reflected that view, at least initially, as investors adjusted positions amid uncertainty about potential restrictions.
Analysts differ on the scale of potential financial damage. ASML itself has forecast that sales into China will represent 20% of its total revenue in 2026, but it has noted that sales of older-generation machines would remain unaffected by the proposed measures.
Michael Roeg of Degroof Petercam estimated the new rules could reduce ASML’s sales by a "single digit" percentage. JPMorgan analyst Sandeep Deshpande offered a larger potential hit to profitability, saying ASML’s earnings per share could be reduced by up to 10%.
Deshpande also added that ASML’s sales to non-Chinese customers would "increase considerably, though not offsetting the lost China revenue," as overseas chipmakers expanded capacity to make up for any shortfall. He argued that "The current tight capacity for chips in multiple markets would get much worse with these restrictions," suggesting broader implications for chip supply if the rules were enforced.
Some market services and tools referenced alongside coverage of the stock suggest valuation frameworks are available to investors seeking to assess whether the current price reflects these risks, including multi-model Fair Value approaches. The near-term market reaction and analysts' divergent estimates underline persistent uncertainty until any law is finalised and applied.
Market context note: This report reflects the situation as described following the legislative proposal and the immediate market reaction; analysts’ estimates cited are those provided in response to the proposal.