Key Points
- ASML warned that its sales to China will decline “significantly” next year.
- However, the company expects its overall 2026 sales will not be lower than 2025’s.
- Strong demand from the AI sector is helping to offset the weakness in China.
- The company booked €5.4 billion in new orders in the third quarter, driven by AI.
Dutch semiconductor giant ASML warned on Wednesday that it expects a “significant” decline in its sales to China next year. However, the company also calmed investor fears by stating that its overall sales in 2026 should not fall below 2025 levels, indicating that strong demand from the rest of the world, particularly from the booming AI sector, will offset the slowdown in China.
ASML’s stock rose 3% on the news. Investors had been nervous after the company warned in July that its 2026 growth was uncertain due to geopolitical tensions. Wednesday’s update, which came with the company’s third-quarter earnings report, provided some much-needed reassurance.
The warning about China is a direct result of the ongoing U.S.-China tech war. The U.S. has been tightening its restrictions on chip exports to China, and ASML, which makes the essential machines needed to produce the world’s most advanced semiconductors, is caught in the middle.
Despite the headwinds from China, ASML is still benefiting massively from the global AI boom. The company booked €5.4 billion in new orders in the third quarter, fueled by investments in AI infrastructure. CEO Christophe Fouquet said that “strong news” about the commitment to AI has helped to reduce some of the uncertainty the company was facing.
For the third quarter, ASML’s results were mixed, with sales missing expectations but profit coming in slightly ahead.
