AMSTERDAM, April 7 (Reuters) - Shares of computer chip equipment maker ASML dipped on Tuesday, the first trading day after U.S. lawmakers last week proposed a law that could further restrict the
ASML Shares Drop After US Lawmakers Propose New China Export Restrictions
Market Reaction and Analyst Perspectives on Proposed Export Restrictions
AMSTERDAM, April 7 (Reuters) - Shares of computer chip equipment maker ASML dipped on Tuesday, the first trading day after U.S. lawmakers last week proposed a law that could further restrict the company's sales to China.
Analysts said the bill, if enacted by the U.S. and enforced by the Netherlands, could lead to the first new restrictions on ASML since September 2024, blocking sales and the servicing of its DUV immersion lithography tools to customers in China.
ASML’s Position in the Chip Equipment Market
ASML is the dominant maker of such tools that are used to create the circuitry of chips, though it faces competition from Nikon of Japan and Chinese firm SMEE.
Analyst Reactions to the Proposed Legislation
"We view this prospect negatively" Citi analysts said in a note.
Shares dropped by as much as 4.7% before recovering slightly. They were 4.1% lower at 1,114 euros in Amsterdam by 1100 GMT. ASML declined comment and the Dutch government said it is not up to the Netherlands to comment on proposals by the U.S. legislature.
Differing Analyst Views on Financial Impact
Opinions on the financial impact varied. ASML has forecast its sales in China at 20% of its total in 2026, but sales of older machines would not be affected.
Analyst Michael Roeg of Degroof Petercam estimated the new rules could weaken ASML sales by a "single digit" percentage.
JPMorgan analyst Sandeep Deshpande said ASML's EPS could be reduced by up to 10%. He also said ASML's sales to other regions would "increase considerably, though not offsetting the lost China revenue," as non-Chinese chipmakers increase their capacity to compensate. The biggest impact would be on global markets, he wrote in a note.
Potential Global Market Consequences
"The current tight capacity for chips in multiple markets would get much worse with these restrictions," he said.
(Reporting by Toby Sterling and Nathan Vifflin; editing by Barbara Lewis)
