ASML Stock Pressured by US Scrutiny of China Business

Shares of ASML Holding N.V. (ASML) faced downward pressure after a U.S. House committee released a critical report slamming the semiconductor equipment giant for its significant business dealings in China. The panel's findings suggest that sales from ASML and other industry leaders are potentially fueling China's military modernization, intensifying geopolitical and regulatory risks for the Dutch firm.

The report, issued by the House Select Committee on the CCP, revealed that five major semiconductor toolmakers, including ASML, sold $38 billion worth of critical technology to China in 2024. and benefited state-owned and military-linked companies. The investigation highlighted that ASML alone sold 70% of its advanced deep ultraviolet (DUV) immersion lithography systems to China in 2024, a substantial increase from 26% in 2022.

This heightened scrutiny from Washington signals a growing risk for ASML, which relies on China as a key market. The U.S. lawmakers are now advocating for a significant expansion of export controls to cover all advanced chipmaking equipment sold to China. The committee's report pointed to inconsistencies in export regulations between the U.S., Japan, and the Netherlands, which they argue have created loopholes. This has led to calls for to create a more level playing field.

ASML has not issued a public comment in response to the latest congressional report. The company has previously stated it did not anticipate a significant financial impact from earlier U.S.-China chip restrictions. However, the escalating pressure from U.S. lawmakers could lead to tighter Dutch government regulations on DUV lithography system exports. For investors, this introduces a new layer of uncertainty, as the could impact ASML's future revenue streams from the region. The situation remains a key focal point for the semiconductor industry, which finds itself at the center of the strategic competition between the U.S. and China.