Investors will seek clarity on the risks posed by tariffs U.S. President Donald Trump plans to impose on the semiconductor industry when computer chip equipment maker ASML (ASML.AS) reports first-quarter earnings on Wednesday.
Trump spared semiconductor equipment makers like ASML, from the 10% "baseline" tariffs on Sunday, as he prepares a sector-wide tariff on chips.
Net bookings, the most closely watched figure in the industry, are expected to reach 4.89 billion euros ($5.56 billion) in the first quarter of the year, according to estimates compiled by researcher Visible Alpha.
ASML, the biggest supplier of equipment used to make computer chips, derived 17% of its revenue from the U.S. market last year. That is expected to grow as Trump seeks to push chipmaking investments back to the U.S. ASML's biggest customer, Taiwan's TSMC (2330.TW) is already planning to spend over $100 billion in five new factories there.
"The focus will be on the potential impact of tariffs," wrote ING analyst Marc Hesselink in a research note.
But other analysts cautioned that the cost of expansion in the United States will be higher for chipmakers than in other regions.
"This mainly affects Intel (INTC.O), TSMC Arizona fabs, and other players' fabs in U.S.," analyst Kevin Wang of Mizuho said.
ASML's high-end EUV lithography machines, the world's most advanced chip engraving system, are produced in the Netherlands can cost up to $350 million each.
"A chip manufacturer won't refuse to have the best technology due to a tariff. In some cases, as with ASML's EUV, there is no alternative", said Morningstar analyst Javier Correonero.
ASML manufactures crucial parts of the machines in the U.S., like the EUV light source. That puts the Dutch company in a better position to face tariffs, said KBC Securities analyst Thibault Leneeuw.
The U.S. is also emerging as a bigger market for ASML as a result of Chinese spending slowing. China represented 42% of orders in 2024. That is set to decrease through the year to a low 20% share, ASML guided in January.
Still, analysts at Mizuho and Jefferies say they expect Chinese chipmakers "to keep their orders at a relatively high level" in the first quarter, as chipmakers like SMIC (0981.HK) keep on stocking ASML's older DUV machines in fear of more export controls later this year.
($1 = 0.8800 euros)
