Pressure from China and U.S. tariffs have wiped $130 billion off the value of semiconductor giant ASML.

 

Dutch lithography equipment maker ASML has seen its market capitalization fall by more than $130 billion in less than a year amid uncertainty over export restrictions to China and U.S. tariffs.

ASML, a major player in the semiconductor supply chain, saw its shares reach an all-time high of over 1,000 euros per share in July last year, giving it a market capitalization of $429.5 billion (according to S&P Capital IQ). However, as of Tuesday's closing price, its market capitalization had fallen to just under $297 billion.

Semiconductor-related stocks have been volatile since last year due to the U.S. tightening of semiconductor export restrictions to China and U.S. President Donald Trump's hints of imposing tariffs on the semiconductor industry since taking office. ASML and other European semiconductor companies have been affected by this, according to a CNBC report and information obtained by Al Arabiya Business.

"Shares of equipment makers in this sector are falling as concerns over US restrictions on China are concentrated in one place," said Stefan Hauri, head of equity research at ODDO BHF.

Hauri added that the debate over tariffs and over companies' overinvestment in artificial intelligence (AI) raises the question of whether "demand is not as high as many expected."

ASML is one of the most important companies in the semiconductor supply chain. The company designs equipment called extreme ultraviolet (EUV) lithography equipment, which is bought by manufacturers such as TSMC and is essential to the production of the world's most advanced semiconductor chips.

The company recently began shipping its next-generation equipment, called high numerical aperture (HNA) equipment.

ASML is widely considered the only company in the world that can manufacture EUV lithography equipment, giving it a lot of freedom.

However, ASML has never shipped its latest equipment to China, limiting the Dutch company's potential sales.

ASML is not the only one facing the challenges of tariffs and China. Semiconductor stocks around the world are under pressure from uncertainty in global markets linked to China and tariffs.

Does ASML have a bright future?

A trade and tariff agreement between the U.S. and Europe could ease some of the uncertainty for investors.

Hori added, "If an agreement is finally reached between President Trump and Europe and many other countries, the company is likely to benefit from a market recovery, especially in this sector."

Despite the external pressures ASML is facing, analysts remain relatively optimistic about the company's stock price. The average analyst conference call compiled by the London Stock Exchange (LSEG) has a target price of just over 779 euros for ASML shares. That would be an increase of about 17% from Tuesday's closing price.

​​Wells Fargo published a client note this month after meeting with ASML management. Analysts at the investment bank said ASML "is optimistic about its growth prospects" for 2025 and 2026, pointing to companies such as Samsung and Intel, which are investing in next-generation semiconductor manufacturing equipment.