ASML Lowers 2025 Guidance, Triggering Chip Stock Losses

Netherlands-based semiconductor equipment giant ASML Holding (NASDAQ:ASML) experienced its largest single-day share price drop since 1998 after sharing a weaker-than-expected 2025 forecast.

The company plummeted about 16 percent on Tuesday (October 15) after releasing its Q3 report and guidance for next year. Its results were published a day earlier than expected due to a technical error.

CEO Christophe Fouquet said in a press release that ASML expects total net sales of 30 to 35 billion euros next year, which is in the lower half of the range mentioned at the company’s 2022 investor day.

‘While there continue to be strong developments and upside potential in artificial intelligence (AI), other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected,’ he said.

ASML, which is known for supplying lithography machines to semiconductor manufacturers such as Taiwan Semiconductor Manufacturing Company (NYSE:TSM), Intel (NASDAQ:INTC) and Samsung (KRX:005930), said its customers currently have a cautious mindset due to the market dynamics outlined by Fouquet.

Total net sales for Q3 came in at 7.5 billion euros, slightly beating expectations; however, net bookings for the quarter were reported at just 2.6 billion euros, significantly below market forecasts of 4 to 6 billion euros.

ASML’s share price decline weighed on other tech stocks that have benefited from the surge in demand for advanced chips, but are now facing potential headwinds if chipmakers scale back investments.

Several semiconductor manufacturers have delayed capital expenditure plans due to lower-than-expected demand in consumer electronics and smartphones. Intel previously announced major workforce cuts geared at helping it save US$10 billion in 2025, affecting orders for ASML’s lithography tools. Similarly, memory chipmakers have shifted their focus from expanding capacity to improving technological efficiency, contributing to fewer orders for new systems.

ASML has also faced limitations in selling its most advanced lithography tools to China due to US-led export controls.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.