ASML's Grim Forecast Shakes Semiconductor Market

ASML, a leading semiconductor equipment maker, forecasts weaker 2025 sales due to sluggish chip market segments, resulting in a significant share price drop. While AI-related chips are booming, weaker demand in other segments led to cautious customer spending. Unexpected results have analysts seeking more details on future projections.

ASML, Europe's largest tech firm and a major supplier in the semiconductor industry, revised its 2025 sales forecast downward on Tuesday, citing prolonged weakness in certain market segments. The announcement led to a 16% drop in its share price, marking its largest one-day decline since 1998.

Despite buoyant demand for AI-related chips, other areas of the semiconductor market remain stagnant, causing delays in orders for logic chips and limited capacity additions for memory chips, according to ASML. The company had initially projected 2025 sales growth between 30-35 billion euros but now expects to achieve only the lower half of that range.

Analysts were caught off guard by the revised outlook, as management had previously described it as 'conservative' as recently as last month. The company noted a record sale to China despite strict U.S. export restrictions on their most advanced products. ASML's quarterly earnings slightly exceeded analyst expectations, with increased net profits yet underwhelming bookings.

(With inputs from agencies.)