ASML Sees Hit From US Chip Curbs But Could Enjoy 2025 Boom

US and Dutch export curbs will knock down sales to China of its mid-range lithography machines by about 10-15%, the world’s top chip equipment maker ASML said on Wednesday.

Yet the chip giant, which has a stranglehold on chipmaking machines, still expects Chinese demand for its older machines to remain “very very solid”, the company’s CFO Roger Dassen said.

Sales of ASML machines to China hit record levels in 2023 and accounted for 39% of the company’s fourth-quarter sales despite US efforts to stop China accessing the most advanced chips.

Official data showed China splurged $10.6 billion on semiconductor equipment in the last three months of 2023, analysts from Barclays said.

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Chip boom tipped in 2025

And even with the new US chip curbs, there are signs that a new chip boom is looming – perhaps next year, some commentators have suggested.

ASML and the world’s leading chip producer, Taiwan’s TSMC, are both seen as sitting pretty because of their key market positions if a cyclical upswing comes.

ASML’s Dassen also confirmed that another older DUV tools not covered by Dutch licensing requirements would be directly restricted from China by US rules, in some instances.

“We should now expect that for 2024 we will not get export licences for shipment into China for, let’s say, advanced immersion, so NXT:2000i and up, tools,” Dassen said, referring to Dutch licensing rules announced in June.

“And we should also expect for a handful of fabs not to get export licences for China for (older) NXT:1970i and NXT:1980i immersion tools,” he added, due to US direct restrictions imposed in October.

It was the first public confirmation by the company that US rules would apply to the lower-grade 1970i tool in its DUV series. But, as noted above, Dassen still expected demand from China for older equipment to stay “very, very solid”.

Speaking in a video released by the company, he said: “It was solid last year. We expect it to be solid this year and also on a go-forward basis.”

Following a US-led campaign to slow Beijing’s technological and military advances, ASML has been restricted from selling its most advanced EUV tool line in China since 2019 and has never sold an EUV tool there.

Yet China, usually ASML’s third biggest market, rose to second place in 2023, accounting for 29% of its sales for the year, or more than 6.4 billion euros, as chipmakers there boost manufacturing capacity with government support.

‘Continuing demand’ for older chip machines

CEO Peter Wennink said continuing Chinese demand for older chipmaking equipment should come as no surprise, given the number of chips it needs for everyday devices that need chips, as well as its large solar and electric vehicle industries, both of which require many older chips.

“They’re completely dependent on import,” he said in an interview. “Of course they build their own” chip-making plants.

Taiwan, home of Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest and most advanced contract chipmaker, remained ASML’s biggest customer.

Taiwan was ASML’s largest market as usual in 2023, with a share of 30%, while South Korea ranked third with 24%, including Samsung Electronics and memory chip maker SK Hynix. Intel and Micron of the US are also important ASML customers.