By Toby Sterling and Nathan Vifflin
AMSTERDAM (Reuters) – Investors and analysts are reviewing their assessments of computer chip equipment maker ASML, they said on Wednesday, after the corporate cut 2025 financial guidance, citing weakness in markets aside from AI and delayed orders.
The position of ASML, Europe’s most dear technology company, as a necessary supplier to chipmakers just isn’t in query. But doubts have emerged over its short term sales, and, for the long term, whether it may well proceed to outgrow the general market.
Tuesday’s change to guidance triggered the largest selloff in ASML’s shares in 20 years.
Shares fell one other 4.9% to 635.60 euros at 0840 GMT on Wednesday, down from an all-time high above 1,000 euros ($1,088) a share in July that followed a decade-long surge based on ASML’s dominance of the marketplace for lithography tools, needed to create circuitry.
After the pandemic leap in demand, ASML said some customers have delayed latest plants and upgrades, including makers of the logic chips utilized in smartphones, PCs and other devices.
Manufacturers that make the memory chips that go into them also plan fewer expansions and are counting on existing technology for longer.
“There must be limits to the expectations we investors put in any single company,” said Nick Rossolillo of Concinnus Financial, who has owned ASML stock since 2022.
“That is especially the case for an upstream equipment supplier highly reliant on the spending plans of its manufacturing customers.”
Though the corporate didn’t discover which customers were behind the guidance cut, analysts looked first at TSMC, which makes AI chips for Nvidia and smartphone chips for Apple, and is ASML’s biggest customer.
“The strong sales trends at TSMC are a misleading indicator for the general health of the semiconductor industry,” said analyst Michael Roeg of Belgian investment bank Petercam Degroof.
“TSMC has been spending relatively low capex numbers to date this 12 months, they usually may accomplish that again next 12 months because their overall (plant) utilisation just isn’t nearly as good as their sales numbers suggest.”
Amongst ASML customers that make logic chips, Intel said in August it could cut capital spending by $10 billion in 2025, while Samsung has said it faces challenges on the factory it’s constructing in Texas.
Roughly 1 / 4 of chipmakers’ spending on chipmaking tools goes to ASML, though some analysts consider which will decline in the longer term.
ASML’s executives are expected to deal with analysts on a call afterward Wednesday.
($1 = 0.9190 euros)
(Reporting by Toby Sterling and Nathan Vifflin; editing by Barbara Lewis)