ASML Holding reported that its sales to China made up 27% of total revenues for the first quarter of 2025, surpassing prior expectations of low-20% levels. This growth was driven by robust demand for Deep Ultraviolet (DUV) lithography systems used by Chinese chipmakers for mature-node chips, essential for products like smartphones and automotive parts. However, ASML’s newer Extreme Ultraviolet (EUV) systems remain restricted from being shipped to China due to U.S. and Dutch export controls aimed at preventing advanced chip production.
Despite the current strong demand for DUV systems, ASML acknowledged the increasing uncertainty in the trade environment, which could negatively impact future revenues. Ongoing geopolitical tensions and potential new export rules may hinder shipments or reduce orders from Chinese customers. ASML has yet to experience any cancellations or changes in customer behavior but is working to mitigate risks associated with these uncertainties.
In comparison, competitors such as Applied Materials and Lam Research also face export limits but have broader product offerings applicable to the Chinese market, particularly for older technology nodes. ASML’s share price has increased by approximately 15.4% year-to-date, outpacing the broader technology sector’s 7% gain, as its valuation remains relatively high, with a forward price-to-sales ratio of 8.23 compared to the sector average of 6.57.
