Semiconductor industry prepares for slowdown

Narumon Bowonkitwanchai/Getty Images

• less than 3 min read

Morning Brew delivers quick and insightful updates about the business world every day of the week from Wall St. to Silicon Valley.

ASML, the leading supplier of vital semiconductor equipment, lowered its 2025 sales expectations Tuesday, triggering a sell-off in the sector and combined market value losses for US and Asian markets of about $420 billion.

What happened: ASML said in its earnings report that it received less than half of its expected equipment bookings last quarter.

The Netherlands-based company is a vital part of the semiconductor supply chain. In one case, it’s the only company that makes and services a specialized chipmaking machine.

Investors expected the artificial intelligence boom to drive up demand for chips and the machinery needed to make them. But it wasn’t enough to counteract the lag from the automotive and industrial sectors. Plus, some of ASML’s biggest customers, like Intel and Samsung, have seen disappointing sales in recent quarters.

The China market is about to dry up. ASML never sold China its EUV machines, but now new export restrictions will limit sales of DUV machines.

Bottom line: Even after the initial shock wears off, the problems facing ASML—and the rest of the chip industry—will likely linger.—MM

Morning Brew delivers quick and insightful updates about the business world every day of the week from Wall St. to Silicon Valley.