ASML shares fall after proposed U.S. chip export curbs on China

ASML shares fell on Tuesday after U.S. lawmakers last week proposed further measures that would restrict China from additional chipmaking tools and potentially impact the Dutch chip giant’s already fragile sales to the country.

Shares of ASML in the Netherlands were down around 2.6% at around 6:11 a.m. ET.

On Thursday, a group of bipartisan lawmakers introduced the Multilateral Alignment of Technology Controls on Hardware (MATCH) Act, designed to cut China off from chipmaking tools and target the country’s most critical semiconductor firms.

“While the United States has imposed extensive export controls to slow China’s semiconductor indigenization, U.S. allies have not fully matched these measures. This misalignment has left critical gaps that China continues to exploit,” said the office of Rep. Michael Baumgartner, R-Wash., who led the bill, in a statement published on April 2.

ASML was not immediately available for comment when contacted by CNBC.

The U.S. has imposed various semiconductor export curbs on China over the last few years.

Much of this has focused on the most advanced semiconductor technology. ASML makes extreme ultraviolet (EUV) lithography machines that are required to manufacture the most advanced chips on the planet.

ASML has never exported any of these machines to China.

The Dutch firm also makes a deep ultraviolet (DUV) lithography machine. DUV lithography machines are less advanced and are used to manufacture other types of semiconductors like memory chips, which are installed in everything from laptops to phones.

Some of ASML’s DUV machines have been subject to Dutch export licenses.

The MATCH Act, if passed, would ban even ASML’s DUV lithography machines, which can be used to make less advanced semiconductors and which, so far, China’s biggest chipmakers have been able to purchase.

In January, ASML said that it expects China to account for about 20% of total sales this year, down from 33% in 2025. This was before the new proposed new U.S. curbs.

If the restrictions come into effect, this could put pressure on the Dutch company’s already-falling China sales.

“While the bill is early-stage and its outcome uncertain, it creates a geopolitical overhang. At this stage, it remains unclear whether all DUV tools would be potentially concerned or if current restrictions on some DUV immersion tools … would be extended,” Stephane Houri, head of equity research at ODDO BHF, said in a note on Tuesday.

If a broad DUV ban took place, it would “create some volatility” in ASML’s results, “potentially boosting some short term orders (before the restrictions are implemented) but impacting results midterm,” Houri said.

“The share price reaction shows that the proposals coming out of Congress in the US could have a fairly material impact on ASML,” Ben Barringer, head of technology research at Quilter Cheviot, told CNBC.

“The legislation would impact older versions of the company’s lithography tools, which represent around 10%-15% of overall sales. Within that mix, China is approximately 50%, so we are looking at a fairly big hit of around 5%, but one that would likely depreciate over time.”

Both Barringer and Houri noted that the proposals are in the early stages and would still need to work their way through the American legislative process.

Washington’s various restrictions over the past few years have actually helped boost China’s domestic semiconductor industry, analysts told CNBC, with several companies reporting record revenues last year. The country has managed to find alternatives to some of the technology it has been cut off from, such as high-bandwidth memory to Nvidia competitors.

But China’s biggest chipmakers, such as Semiconductor Manufacturing International Co. (SMIC) and Hua Hong still rely on ASML’s DUV tools to make less-advanced chips.

There is no local alternative to ASML for EUV, and globally, very few options to replace DUV lithography machines.

If U.S. proposals get the green light, they can “disrupt China’s semiconductor manufacturing capabilities, as China completely relies on ASML tools today,” Houri said.