ASML Holding NV’s shares plunged the most in 26 years after it booked only about half the orders analysts expected, a startling slowdown for one of the bellwethers of the semiconductor industry.
The Dutch company, which makes the world’s most advanced chipmaking machines, yesterday lowered its guidance for next year and reported bookings of 2.6 billion euros (US$2.8 billion) in the third quarter, missing an average estimate of 5.39 billion euros by analysts.
The results caused ASML shares to plunge 16 percent in Amsterdam, the biggest decline since June 12, 1998. It also triggered a broad downturn in chip-related stocks, with Nvidia Corp falling 4.5 percent and the benchmark Philadelphia Semiconductor Index sliding 5.3 percent.
Photo: Reuters
Makers of chip-manufacturing equipment were especially hard hit: Applied Materials Inc and Lam Research Corp both suffered their worst declines since 2020, and KLA Corp had its biggest one-day drop in nearly a decade.
“It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness,” ASML chief executive officer Christophe Fouquet said in the statement.
The weak results were amplified by the company mistakenly releasing its financial results a day earlier than scheduled. ASML published the release prematurely “due to a technical error,” it said in a separate statement.
The chip industry is experiencing strangely uneven times. In areas such as artificial intelligence (AI) accelerators, companies like Nvidia can’t keep up with demand. But in other sectors, including automotive and industrial, it’s in a prolonged slump with customers cutting back orders because they have too much inventory. Intel Corp is cutting expenses in a restructuring that includes delays to planned factories in Germany and Poland, while memory chipmakers such as Samsung Electronics Co and SK Hynix Inc are also being careful with spending.
“While bookings are typically lumpy, we have to concede given lowered guidance that it’s looking like the delayed cyclical recovery and specific customer challenges are weighing heavily on ASML’s 2025 expectations,” Bernstein analyst Sara Russo said.
ASML lowered its guidance for next year's total net sales to between 30 billion euros and 35 billion euros, compared to as much as 40 billion euros previously.
Next year, the company expects a gross margin between 51 percent and 53 percent, compared to a prior range between 54 percent and 56 percent, mainly due to delayed timing for its top-end extreme ultraviolet machines, Fouquet said in the statement.
ASML didn’t give a detailed explanation of why its bookings fell so short of estimates, beyond a few delays in plant constructions. The company will hold a call with investors today.
Europe’s most valuable technology company’s shares have fallen by a third since hitting a record high in July, hurt by the prospect of more US restrictions on its business in China, as well as a broader weakness in the semiconductor sector.
“Many will debate whether this release was an accident or planned, but clearly disappointing,” Cantor Fitzgerald analyst C. J. Muse said in an e-mailed statement. “Weakness across Intel and Samsung is clearly leading to 2025 tracking worse than we thought,” he said.
Last month, the Netherlands published new export control rules that made ASML apply for export licenses in The Hague instead of US for some of its older machines. That came on the heels of a Bloomberg report that the Dutch government would limit some of ASML’s ability to repair and maintain its semiconductor equipment in China.
China remained ASML’s biggest market, accounting for 47 percent of sales in the quarter. Sales to the Asian nation jumped by nearly 20 percent from previous quarter to 2.79 billion euros.
But the demand from China may slow in the upcoming period and Washington’s ongoing chip war against Beijing continues to be a long-term overhang on ASML shares. The company could lose nearly a quarter of its sales in China next year, and 45 percent of its overall revenue generated in the country is at risk from further restrictions, according to UBS analyst Francois-Xavier Bouvignies.
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
Intel Corp regards Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a longstanding partner, as the US chipmaker would continue outsourcing production of advanced chips to TSMC, Intel chief executive officer Lip-Bu Tan (陳立武) said yesterday. “I don’t look at people as competitors. I look at the collaboration... Nvidia is also, you know, a good friend,” Tan told a news conference following his keynote speech at the Computex trade show in Taipei. “It’s a very trusted partnership for us... We are a big, top customer for them, and we’re going to continue doing that,” he said, referring to TSMC, the world’s largest foundry
Artificial intelligence (AI) agents would supplant smartphones as the center of people’s digital lives, fundamentally reshaping personal devices and driving a major computing upgrade cycle, Qualcomm Inc CEO Cristiano Amon said yesterday. In his keynote speech for this year’s Computex trade show in Taipei, Amon said that the rise of "agentic AI" — AI systems capable of reasoning, planning and carrying out tasks autonomously — would transform how people interact with technology across phones, PCs, vehicles and wearable devices. Describing the technology as the next major evolution in computing, Amon said that "2026 is the year of agents.” For decades, smartphones have sat
RSS