asml's euv future hinges on china, tariffs, and bookings
veldhoven, Friday, 2 May 2025.
asml faces a complex landscape. Revenue is growing, and demand from China remains strong. However, new data shows bookings are soft. Tariff risks also create uncertainty for the euv technology giant. A hold rating is suggested. Key to asml’s future is how it navigates geopolitical tensions and trade policies. These factors could significantly impact its stock valuation. No new euv orders from tsmc are raising questions around 2026 demand.
Navigating tariff threats
ASML acknowledges the difficulty in quantifying the impact of potential tariffs on the semiconductor industry [3]. Concerns over global trade uncertainties led Delta Airlines to retract its full-year financial guidance [3]. Kimberly-Clark also reduced its full-year profit expectations due to trade war-related cost uncertainties [3]. This widespread caution underscores the challenging environment ASML faces. Jim Paulsen, a market strategist, notes that nearly all CEOs are lowering their expectations, signaling increased warning comments from the corporate world [3].
Soft bookings and future demand
ASML’s bookings are soft, and there are no new EUV orders from TSMC [1]. This raises concerns about demand in 2026, despite unchanged guidance for 2025 [1]. The lack of order visibility contributes to a ‘hold’ rating for ASML stock [1]. Companies that lower expectations are being penalized [3]. Those missing expectations see limited rewards [3]. Companies lowering expectations have seen an average drop of 4.8% the next day [3].
us manufacturing in response to trade tensions
In response to potential U.S. tariffs and to mitigate the risk of losing market share to U.S. competitors, Netherlands-based ASM has initiated manufacturing in the United States [7]. ASM is beginning to produce some chip manufacturing tools in the U.S. for local customers [7]. ASM’s revenue from the U.S. accounted for 21% of its total revenue last year [7]. Establishing manufacturing facilities in the U.S. is necessary, driven by both geopolitical factors and the need to be closer to customers [7].