Key Points
- The MATCH Act introduced by U.S. legislators would prohibit DUV lithography equipment exports to China
- Shares of ASML declined as much as 4.7% in Amsterdam before settling at -4.1%
- Approximately 20% of ASML’s projected 2026 revenue comes from Chinese customers
- A JPMorgan analyst projects the legislation could reduce ASML’s earnings per share by as much as 10%
- The proposed legislation has support from both political parties and seeks to align export controls with U.S. allies
Shares of ASML experienced a significant decline on Tuesday following the introduction of new legislation by United States lawmakers that threatens to eliminate a crucial revenue stream from the Chinese market.
The proposed legislation, formally titled the Multilateral Alignment of Technology Controls on Hardware Act or MATCH Act, was put forward last Thursday by a cross-party coalition headed by Washington state Representative Michael Baumgartner.
Should the bill become law, it would prohibit the export of deep ultraviolet (DUV) lithography equipment to China, effectively shutting down a sales channel that Chinese semiconductor manufacturers have relied upon under present export control regulations.
ASML has historically refrained from selling its cutting-edge EUV technology to China. However, DUV equipment, which plays a vital role in manufacturing memory chips and components for common consumer electronics, has remained accessible through current Dutch export licensing protocols. The MATCH Act aims to eliminate this access.
The company’s shares plummeted as much as 4.7% during Amsterdam trading sessions before moderating to approximately 4.1% lower at €1,114 by midday. During U.S. pre-market hours, the stock traded at $1,286.76, representing a 1.32% decline.
Financial Experts Offer Mixed Assessments
Citi’s research team indicated they “view this prospect negatively,” while refraining from providing comprehensive financial impact estimates.
JPMorgan’s Sandeep Deshpande offered more concrete projections, suggesting that ASML’s earnings per share could decrease by up to 10% should these restrictions be implemented. He noted that while revenue from alternative markets would likely grow, it would probably fall short of compensating for the Chinese market losses.
Michael Roeg, an analyst with Degroof Petercam, presented a more conservative outlook, predicting the revenue impact would remain within the “single digit” percentage territory.
ASML representatives chose not to provide comment on the matter. Dutch government officials stated that commenting on legislative proposals from the U.S. Congress falls outside their purview.
Understanding the Broader Intent of the MATCH Act
The legislation extends beyond ASML alone. According to its sponsors, the bill is crafted to address weaknesses in existing export control frameworks that China has leveraged due to inconsistent implementation among U.S. allied nations.
“While the US has imposed extensive export controls to slow China’s semiconductor indigenization, US allies have not fully matched these measures,” Baumgartner’s office said in a statement on April 2.
ASML has projected that Chinese sales will represent approximately 20% of its aggregate revenue in 2026. Exports of older, less sophisticated equipment would remain unaffected by the current legislative proposal.
The Dutch government now confronts mounting pressure from Washington regarding export policy decisions — a particularly delicate matter for a nation where ASML stands as one of its most strategically critical corporations.
The most recent application of new restrictions affecting ASML’s operations in China occurred in September 2024.
