Chip equipment giant ASML warns of tariff uncertainty after strong quarter
By Josh White
Date: Wednesday 16 Jul 2025
(Sharecast News) - ASML, the world's leading supplier of advanced semiconductor manufacturing equipment, reported stronger-than-expected second-quarter results on Wednesday, although its shares were sliding after it warned that revenue growth in 2026 was no longer assured amid mounting geopolitical and macroeconomic uncertainties.
The Dutch company posted net sales of €7.7bn in the three months to June, up 23% year-on-year and slightly ahead of analyst expectations.
Net profit surged 45% to €2.29bn, while new bookings - a closely watched indicator of demand - reached €5.54bn, significantly above the €4.44bn consensus, driven by robust demand from artificial intelligence chipmakers such as Nvidia and TSMC.
Despite the strong quarter, ASML shares fell on Wednesday morning as management signalled that its long streak of annual revenue growth since 2012 could come to an end next year.
"Looking at 2026, we see that our AI customers' fundamentals remain strong," said Chief executive Christophe Fouquet.
"At the same time, we continue to see increasing uncertainty driven by macroeconomic and geopolitical developments.
"Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage."
One key source of uncertainty was the potential imposition of US tariffs on European technology imports, which could raise the cost of ASML's high-end lithography systems from €250m to as much as €325m.
"Clarity is what customers are looking for before they can really finalise their views as to what they're going to do," said chief financial officer Roger Dassen in a call with media, adding that tariffs on components moving between Europe and the US could compound the impact.
Dassen noted that the immediate impact of tariffs was "a bit less negative than we anticipated", helping ASML beat expectations in the quarter.
The company also benefitted from strong upgrade revenues and some one-off cost advantages.
Sales of extreme ultraviolet (EUV) lithography machines - essential for manufacturing cutting-edge chips in Apple's and Nvidia's devices - accounted for €2.3bn of the quarter's bookings.
ASML also delivered one of its next-generation High NA EUV tools, which are central to its long-term growth strategy.
China remained a significant market, contributing 27% of system sales over the past three quarters.
That came despite ongoing US-led export controls, as Chinese chipmakers increased purchases of less advanced equipment.
For the third quarter, ASML forecast revenue between €7.4bn and €7.9bn, below the €8.2bn expected by analysts.
The company narrowed its full-year 2025 revenue guidance to 15% growth, implying sales of around €32.5bn.
At 1146 CEST (1046 BST), shares in ASML Holding were down 8.03% in Amsterdam at €649.40.
Reporting by Josh White for Sharecast.com.
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