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16 Apr 2025
Lynchpin semiconductor equipment supplier does not yet know how to quantify the impact of US import tariffs and retaliation.
ASML, the world’s dominant supplier of semiconductor lithography systems and a key player in the technology economy, says it is too early to quantify the impact that US import tariffs will have on its business either this year or in the longer term.
Announcing the Netherlands-headquartered firm’s latest quarterly results, CEO Christophe Fouquet and his executive team said that based on customer conversations they still expected 2025 and 2026 to be growth years.
But in an in-house video interview Fouquet and CFO Roger Dassen added that the current “dynamic” situation made it impossible to quantify either the specific impact that US tariffs, retaliatory actions, and potential exemptions might have on ASML’s activities, or their effect on the overall market.
Dassen also noted: “We're very actively working with the entire ecosystem to try and minimize the overall impact on the whole ecosystem as a result of that, once we have a better understanding of how exactly it all works.”
Tariff breakdown
The CFO highlighted four different ways that tariffs could affect ASML’s business, on top of any overall impact on global GDP and market confidence leading to lower demand for semiconductor chips and electronic devices.
The most obvious direct impact for ASML would be any tariffs imposed on shipments of new lithography systems to chip manufacturers in the US. Second would be tariffs imposed on parts and tools used for field operations in the US.
A third category could include tariffs on parts imported into the US, one potential example being the high-power carbon dioxide lasers produced by Germany-based Trumpf that are used to produce the extreme ultraviolet (EUV) light used to pattern state-of-the-art chips. These lasers are integrated into full EUV sources at ASML’s facility near San Diego, California.
The fourth tariff impact would come from retaliatory actions, where any other country decides to impose tariff charges on products being imported from the US. But right now, Dassen indicated, it is impossible to put a number on any of those individual impacts, or the overall effect on system demand.
“Our conversations so far with customers support our expectation that 2025 and 2026 will be growth years,” reiterated Fouquet. “However, the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while.”
Asked during an investor call to comment on the apparent contradiction between a desire to re-shore chip manufacturing to the US while simultaneously imposing significant tariffs on key chip-manufacturing equipment only available abroad, Dassen responded:
“We understand those comments, [and] that might be the reason why we have seen exemptions on certain products, and the US administration has said it is reviewing everything. The complexity is being recognized by the US administration, and this is why they’ve said that they need more time to work it out.”
2025 targets intact
As far as the opening quarter of 2025 was concerned, business went pretty much according to plan, with ASML posting sales of €7.7 billion and a slightly higher profit margin than anticipated thanks to the shipment of more high-end EUV tools, where ASML enjoys a monopoly position.
Net bookings of €3.9 billion were also up on last year’s figure of €3.6 billion for the first three months of the calendar year.
For the June quarter, the ASML team says sales should end up somewhere between €7.2 billion and €7.7 billion, with profitability in a broader range than is normal because of the current tariff uncertainty.
And for 2025 overall, Fouquet and his colleagues are maintaining their prior expectations that sales revenues will end up somewhere between €30 billion and €35 billion, subject to the same uncertainty caveats.
“AI has been very strong and has driven the industry in the last few quarters,” added Fouquet. “We still see a lot of strength in AI. In fact some of the demand for this year, [and] also for next year, has solidified. So that's very encouraging. If we add to that the discussion with our customers it points to 2025 and 2026 both [being] growth year[s].”
High-NA EUV progress
One notable development in the latest quarter was ASML’s shipment of a fifth EUV system featuring high numerical aperture (high-NA) reflective optics made by key partner Zeiss, meaning that three customers now have those cutting-edge tools either installed or under installation.
Fouquet also highlighted results from exposures made with those new tools revealed during February’s SPIE Advanced Lithography + Patterning event that took place in San Jose, California, and where Fouquet himself was a plenary speaker.
“I think SPIE was a very good event because we saw our customers being very eager to share their results on high-NA,” said the CEO, noting examples including Intel’s exposure of more than 30,000 wafers on their tool.
“They also pointed very strongly to the fact that high-NA could help them simplify their process,” he added. “They mentioned one layer where they could reduce the number of process steps from 40 to 10. Which of course helps with cycle time, yield, and process complexity.”
Another SPIE presentation, this time from Samsung, suggested that the high-NA tool could reduce their cycle time by 60 per cent.
“We start to see some of the value of high-NA being recognized,” Fouquet added. “Being measured in some way by our customers. Which is very, very encouraging.
“One paper showed that the high-NA system maturity is far ahead of what we experienced on low-NA at the same stage of its introduction, supporting a much lower risk of insertion and adoption for our customers.”
• In early trading after the ASML results announcement, the company’s stock price dropped in value by around 5 per cent to trade at close to $650 on the Nasdaq. Like many technology stocks, its valuation has experienced volatile swings in sentiment over the past couple of weeks.
But for now that valuation remains well down on the all-time high of more than $1000, which was reached in June 2024.
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