Computer chip equipment maker ASML’s deep cuts to its 2025 sales forecast sparked a sell-off in chip stocks on Tuesday over worries that global chip demand may be faltering.
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The weaker outlook could, instead, reflect some overcapacity at chip factories that had already stocked up on ASML’s pricey tools during the pandemic and have become better at using them to produce a larger numbers of chips, analysts said.
ASML’s stock plummeted to its biggest single-day loss in a quarter century on its downgraded forecast. In results that the company inadvertently posted a day ahead of schedule, ASML said it expects 2025 total net sales of 30 billion to 35 billion euros, (US$32.7 billion to US$38.1 billion) near the bottom of its previous forecast.
That dragged down a large swathe of the semiconductor industry because ASML has a near-monopoly on critical tools used by TSMC, Intel, and Samsung Electronics to make advanced chips.
Spurred by blockbuster demand for chips during the pandemic, these chip makers built extra capacity. That growth stabilised as supply chains eased, leaving them to wait to order new tools until their factories looked ready to overflow with orders.
ASML’s forecast was a lagging indicator of what has been playing out at these chip factories for months, analysts said.
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