ASML's chip firm shares drop 15% after revealing weaker sales in China

• ASML anticipates its net sales for 2025 to fall within the range of 30 billion euros to 35 billion euros ($32.7 billion to $38.1 billion), which is the lower half of its previous estimate.
• The company's CFO, Roger Dassen, stated that China is projected to contribute approximately 20% of the company's total revenue in the upcoming year. Previously, the Dutch company had announced that 49% of its sales originated from China.
• ASML mistakenly published its results early due to a technical error on its website.

On Tuesday, the shares of a semiconductor equipment maker fell 15.6% after the company published disappointing sales forecasts in its results a day early.

The news caused Advanced Micro Devices and Broadcom to fall at least 4%.

The company reported net bookings of 2.6 billion euros ($2.83 billion) for the September quarter, which was below the 5.6 billion euro LSEG consensus estimate. Despite this, net sales came in at 7.5 billion euros, surpassing expectations.

According to company CEO Christophe Fouquet, while AI continues to show strong developments and potential, other market segments are taking longer to recover. The recovery now seems to be more gradual than previously anticipated.

Prior to the earnings, Wall Street analysts had become more cautious on the chip company, which is a vital supplier to the broader semiconductor industry.

China concerns

Due to U.S. and Dutch export restrictions, the firm is facing a more challenging business environment in China.

The U.S. government recently imposed new export restrictions on critical technologies to China, including advanced chipmaking equipment. Meanwhile, the Dutch government has announced plans to assume control over ASML's exports to the country.

The company's CFO, Roger Dassen, stated on Tuesday that he anticipates the China business will exhibit a "more typical percentage in our order book and also in our business."

Dassen stated in a video transcript that China is moving towards more typical business percentages, as seen in our company.

"Our backlog indicates that China should contribute approximately 20% to our total revenue next year."

The Dutch company reported in its June-quarter earnings presentation that 49% of its sales originate from China.

'Clearly disappointing'

The disappointing 2025 outlook and weaker-than-expected order book of ASML are likely to overshadow its decent Q3 results, according to analysts at Bernstein.

The lowered guidance from ASML's analysts suggests that the delayed cyclical recovery and specific customer challenges are significantly impacting their 2025 expectations.

While analysts at Cantor said the downbeat outlook for ASML was "clearly disappointing" and will affect semiconductor stocks, they emphasized that the company's updated outlook does not indicate any change in the growth story of AI.