Chip firm ASML shares plunge 15% after warning of weaker China sales in early release
An icon of ASML is displayed on a smartphone, with an ASML chip visible in the background.
Nurphoto | Nurphoto | Getty Images
Shares in semiconductor equipment maker ASML fell 15.6% on Tuesday after the Dutch company published disappointing sales forecasts in results a day early.
The move pulled other chip stocks lower, with Nvidia, Advanced Micro Devices and Broadcom all falling at least 4% after the news.
ASML said it expects net sales for 2025 to come in between 30 billion euros and 35 billion euros ($32.7 billion and $38.1 billion), at the lower half of the range it had previously provided.
Net bookings for the September quarter were 2.6 billion euros ($2.83 billion), the company said — well below the 5.6 billion euro LSEG consensus estimate. Net sales, however, beat expectations coming in at 7.5 billion euros.
“While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected,” company CEO Christophe Fouquet said in the earnings release.
AMSL
ASML said that the early publication of its results was due to a technical error which saw it erroneously publish the report on a part of its website.
In the lead-up to the earnings, Wall Street analysts had turned more cautious on the chip firm, which is a critical supplier to the broader semiconductor industry.
China concerns
The firm is facing a tougher business outlook in China due to U.S. and Dutch export restrictions on shipments to the country.
Last month, the U.S. government rolled out new export controls on critical technologies to China, including advanced chipmaking tools. Separately, the Dutch government announced plans to take over control of exports of ASML‘s machines to the country.
ASML’s extreme ultraviolet lithography machines are used by many of the world’s largest chipmakers — from Nvidia to Taiwan Semiconductor Manufacturing Co. — to produce advanced chips.
The company’s chief financial officer, Roger Dassen, said Tuesday that he expects the firm’s China business to show a “more normalized percentage in our order book and also in our business.”
“We do see China trending towards more historically normal percentages in our business,” Dassen said, according to a transcript of a video, also released a day early.
“So we expect China to come in at around 20% of our total revenue for next year. Which would also be in line with its representation in our backlog.”
In its June-quarter earnings presentation, the Dutch company said that 49% of its sales come from China.
‘Clearly disappointing’
In a note released following ASML’s results Tuesday, analysts at Bernstein said the firm’s weaker-than-expected order book and a disappointing 2025 outlook were “likely to overshadow decent Q3 results.”
The analysts added that ASML’s lowered guidance indicates that “the delayed cyclical recovery and specific customer challenges are weighing heavily” on 2025 expectations.
Analysts at Cantor, meanwhile, said the downbeat outlook for ASML was “clearly disappointing” and will weigh on semiconductor stocks. However, they added that, “in no way shape or form does the company’s updated outlook indicate any change in the AI growth story.”
The U.S. has halted a technology trade deal with the U.K., after officials in Washington became frustrated with the pace of progress, the Financial Times reported on Tuesday.
Announced in September during President Donald Trump’s state visit to the U.K., the “technology prosperity deal” is a sweeping agreement aimed at encouraging collaboration between the countries on tech like artificial intelligence, nuclear fusion, and quantum computing.
At the time, Trump said that the deal would “ensure our countries lead the next great technological revolution side by side.” U.K. Prime Minister Keir Starmer said that the agreement was a “generational step change in our relationship with the U.S.” that would deliver “growth, security and opportunity up and down the country.”
Talks were suspended by the U.S. last week, the FT reported, quoting unnamed British officials.
When asked to comment on the report, a U.K. government spokesperson told CNBC: “Our special relationship with the US remains strong and the UK is firmly committed to ensuring the Tech Prosperity Deal delivers opportunity for hardworking people in both countries.”
The agreement would establish AI-enabled research programs in areas including the development of models and datasets in mutual priorities such as AI for biotechnology, precision medicine for cancer and rare and chronic diseases, and fusion energy, the two countries said in September.
It came as the U.K. signed deals totalling £31 billion ($41 billion) with U.S. tech firms like Microsoft, Nvidia, Google, OpenAI, and CoreWeave to build out the country’s AI infrastructure. The U.S. is the U.K.’s largest trading partner.
The U.S. Department of Commerce has been approached for comment.
The logo of an Apple Store is seen reflected on the glass exterior of a Samsung flagship store in Shanghai, China Monday, Oct. 20, 2025.
Wang Gang | Feature China | Future Publishing | Getty Images
A shortage of memory chips fueled by artificial intelligence players is likely to cause a price rise in smartphones in 2026 and a drop in shipments, Counterpoint Research said in a note on Tuesday.
Smartphone shipments could fall 2.1% in 2026, according to Counterpoint, versus a previous outlook of flat-to-positive growth.
Shipments do not equate to sales but are a measure of demand as they track the number of devices being sent to sales channels like stores.
Meanwhile, the average selling price of smartphones could jump 6.9% year-on-year in 2026, Counterpoint said, in comparison to a previous forecast of a 3.6% rise.
This is being driven by specific chip shortages and bottlenecks in the semiconductor supply chain, which are pushing up component prices.
The continued build-out of data centres globally has hiked demand for systems developed by Nvidia, which in turn uses components designed by SK Hynix and Samsung — the two biggest suppliers of so-called memory chips.
However, a specific component called dynamic random-access memory or DRAM, which is used in AI data centers, is also critical for smartphones. DRAM prices have surged this year as demand outstrips supply.
For low-end smartphones priced below $200, the bill of materials cost has increased 20% to 30% since the beginning of the year, Counterpoint said. The bill of materials is the cost of producing a single smartphone.
The mid and high-end smartphone segment has seen material costs rise 10% to 15%.
“Memory prices could rise another 40% through Q2 2026, resulting in BoM costs increasing anywhere between 8% and over 15% above current elevated levels,” Counterpoint said.
The rising price of components could be passed on to consumers and that will in turn, drive the rise in the average selling price.
“Apple and Samsung are best positioned to weather the next few quarters,” MS Hwang, research director at Counterpoint, said in the note. “But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins.”
Hwang said this will “play out especially” with Chinese smartphone makers who are in the mid-to-lower end of the market.
Counterpoint said some companies may downgrade components like camera modules, displays and even audio, as well as reusing old components. Smartphone players are likely to try to incentivize consumers to buy their higher-priced devices too.
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