asml feels the pinch: chip equipment orders slump amid tariff headwinds

2025-04-16 asml

Veldhoven, Wednesday, 16 April 2025.
asml, a pivotal chipmaking equipment supplier, saw its stock price take a hit after reporting disappointing order numbers. escalating tariff concerns and order adjustments from major clients like tsmc are creating uncertainty. despite a solid q1 with net sales of 7.742 billion euros, new orders fell short of expectations at 3.936 billion euros. asml ceo christophe fouquet acknowledges the increased macroeconomic uncertainty due to recent tariff announcements, but maintains a positive outlook for 2025 and 2026, driven by ai investments. the company is closely monitoring the impact of these dynamics on potential market demand.

Financial performance and market reaction

ASML’s first-quarter net sales reached 7.742 billion euros, a 46.352 increase compared to 5.29 billion euros in the same period last year [5]. Gross profit saw a 54.987 rise, reaching 4.18 billion euros from 2.697 billion euros [5]. Net income also increased significantly to 2.355 billion euros, up from 1.224 billion euros [5]. Despite these gains, new orders totaled 3.936 billion euros, falling short of the expected 4.84 billion euros [5][7]. This shortfall triggered a nearly 6% drop in ASML’s stock price in pre-market trading [7]. Over the past year, ASML’s stock has declined by more than 30%, impacted by macroeconomic weakness and uncertainties in the AI supply chain [7].

Tariff concerns and potential impacts

The company is facing headwinds from potential tariffs, which could impact shipments to the United States and other regions [5]. ASML’s chief financial officer, Roger Dassen, outlined four categories of potential tariff impacts, including tariffs on complete systems shipped to the U.S., components and tools used in U.S. operations, materials imported into the U.S. for manufacturing, and tariffs imposed by other countries on goods shipped from the U.S. [6]. These tariffs introduce uncertainty and could affect ASML’s performance and the broader semiconductor ecosystem [2][6]. The company is collaborating with the semiconductor industry to minimize the overall impact [6].

Strategic outlook and market dynamics

Despite the tariff concerns, ASML maintains its outlook for 2025, projecting net sales between 30 billion and 35 billion euros with a gross margin of 51% to 53% [4][5]. The company anticipates second-quarter net sales of 7.2 billion to 7.7 billion euros and a gross margin between 50% and 53% [5]. ASML’s CEO, Christophe Fouquet, emphasized that AI remains a key driver for industry growth, reshaping the market landscape [6][7]. He noted that while some customers benefit more from this trend, others face pressure, creating both upside and downside potential in ASML’s 2025 revenue projections [6]. The company is also seeing strong demand in the logic chip market, particularly for advanced logic chips [6].

Broader industry challenges and tsmc’s situation

ASML’s challenges coincide with broader issues in the semiconductor industry. TSMC, a major ASML customer, has experienced order cuts from key clients, affecting its 3nm process [1][4]. An analyst noted that these order adjustments are expected to decrease TSMC’s projected revenue for the second quarter of 2025 [1]. TSMC is also facing challenges related to reduced government subsidies [4]. An industry expert suggested that the order cuts reflect a broader slowdown in the tech sector [1]. These factors add complexity to ASML’s market environment, as it navigates both tariff uncertainties and shifts in customer demand [2][5].

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