ASML's Q1 Bookings Fell Short of Expectations, Trump's Tariffs Sparked Concerns Over Chip Industry Demand!

Dutch semiconductor equipment company ASML released its Q1 2025 earnings report. Worrying the market, the company warned that tariffs have impacted the macro environment and dampened ASML's market demand, bringing significant uncertainty.

The financial report shows that ASML's net order value in Q1 was €3.94 billion, below the expected €4.89 billion. The company's Q1 net sales were €7.74 billion, slightly below the expected €7.8 billion, while net profit was €2.36 billion, exceeding the expected €2.3 billion.

The shortfall in net order value may indicate a slowdown in demand for key chip manufacturing equipment. ASML CEO Christophe Fouquet noted that artificial intelligence remains a key driver of demand for chip equipment, but uncertainty among some customers could lead to ASML's annual revenue falling short of expectations.

ASML expects its 2025 revenue to be between €30 billion and €35 billion. Fouquet stated that ASML must now very carefully monitor the impact of tariffs.

During Wednesday's European trading session, ASML suspended trading on the Amsterdam Stock Exchange, with a 6.5% decline before the suspension.

Back and Forth

Fouquet said his conversations with customers support ASML's expectation of continued growth in 2025 and 2026. However, tariffs have led to a shift in market dynamics, benefiting some customers more than others, which brings both upside potential and downside risks.

Due to concerns that Trump's tariff plans could affect the semiconductor supply chain, global chip inventory has been fragile over the past two weeks.

Last week, the US government announced that smartphones, computers, and semiconductors would be temporarily exempt from reciprocal tariffs. However, last Sunday, Trump and his senior trade officials made statements claiming that the electronics industry would not receive tariff exemptions, and these goods would be moved to another tariff category, causing market confusion.

On Tuesday, the US federal government announced that the Department of Commerce is conducting a national security investigation into the import of semiconductor technology and related downstream products, which has once again made the chip industry sentiment tense.

Two informed sources said that calculations discussed last week with Washington officials and lawmakers show that President Trump's new tariffs could cost US semiconductor equipment manufacturers over $1 billion annually.