ASML Shares Drop as Chipmaking Equipment Shipments to China Halted

Summary

  • Dutch company ASML Holding NV witnessed a decline in shares by over 2% amid news that it ceased some high-end chip machinery shipments to China due to U.S. administration’s intervention.
  • The cessation occurred prior to the mandated export ban enforcement on such devices.
  • Due to U.S. officials’ interference, ASML immediately suspended scheduled exports despite having licenses to transport advanced deep ultraviolet lithography machines till January.
  • Certain lithography systems’ licenses were also partly retracted by the Dutch authorities, impacting a few clients. Nevertheless, ASML guarantees no disturbances towards its 2023 financial projection.

ASML Shares Drop Following Shipment Cancellation

Shares of ASML Holding NV (ASML) experienced a drop of over 2% in the early trading hours of Tuesday due to reports claiming that the company halted shipments of particular high-grade chip manufacturing machines to China. The U.S. President Joe Biden’s administration requested this cancellation.

Pre-emptive Cancellation and Licenses affected

This unexpected cancellation happened several weeks before the export bans on such machinery were due to be implemented. ASML possessed permits to dispatch advanced deep ultraviolet lithography devices to Chinese firms till January. However, U.S. officials stepped in insisting on an abrupt cessation of the originally planned shipments.

Impact on clients and Financial outlook

The Dutch government too played a part in this reshuffle by partly annulling licenses for specific lithography systems to China. This decision impacts a small customer base. Yet, ASML firmly believes these modifications will not tamper with its 2023 financial forecast.

In a recent dialogue with the US government, ASML managed to get additional clarity on the reach and impact of US export control rules. The latest US export laws (released on October 17, 2023) restrict particular mid critical DUV immersion lithography systems for a handful of advanced manufacturing facilities,” the corporation explained.

The sanctions and restrictions on ASML exports could potentially impact trading, specifically affecting stocks and possibly foreign exchange due to the global nature of the semiconductor industry.

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