ASML braces for China slowdown despite solid Q3

October 15, 2025 (MLN): Dutch semiconductor equipment maker ASML Holding NV said on Wednesday that it expects a significant drop in sales to China next year, even as it posted flat quarterly profits amid continued geopolitical uncertainty and trade restrictions.

The world’s leading supplier of advanced lithography machines reported net profits of €2.125bn ($2.5bn) for the third quarter of 2025, nearly unchanged from €2.077bn a year earlier.

Net sales reached €7.5bn, aligning with the company’s earlier forecast range of €7.4–€7.9bn.

“Our third-quarter total net sales were in line with guidance, showing a good quarter for ASML,” said CEO Christophe Fouquet in a statement.

However, the executive cautioned that demand from China one of ASML’s largest markets is set to decline sharply in 2026 following two years of exceptionally strong performance.

“We expect China customer demand, and therefore our China total net sales in 2026, to decline significantly compared to our very strong business there in 2024 and 2025,” Fouquet said.

The expected decline comes as global chipmakers grapple with ongoing export restrictions, U.S.-China trade tensions, and a sluggish semiconductor market recovery.

In July, ASML had warned that such geopolitical factors were clouding its near-term growth outlook and could impact profitability.

Despite the projected drop in Chinese demand, Fouquet expressed cautious optimism, noting, “We do not expect 2026 total net sales to be below 2025,” and said that a detailed 2026 outlook will be shared in January.

ASML, a critical supplier to chip giants such as TSMC, Intel, and Samsung, remains central to the global semiconductor supply chain.

Its extreme ultraviolet (EUV) lithography systems are essential for producing the most advanced chips used in AI, data centers, and consumer electronics.

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