ASML (ASML) Stock Tumbles 4% After US Lawmakers Propose China Export Ban

Key Points

• The MATCH Act was proposed by US legislators to prohibit DUV lithography equipment exports to China
• Shares of ASML declined as much as 4.7% during Amsterdam trading before settling at -4.1%
• Approximately 20% of ASML’s projected 2026 revenue comes from China
• A JPMorgan analyst projects the legislation could reduce ASML’s EPS by as much as 10%
• The proposed legislation has support from both political parties and seeks to align export controls among allied nations

Shares of ASML experienced a significant decline on Tuesday following the unveiling of proposed legislation by US lawmakers that threatens to eliminate a crucial revenue stream from China.

ASML Holding N.V., ASML

The proposed legislation, titled the MATCH Act — an acronym for Multilateral Alignment of Technology Controls on Hardware Act — was unveiled last Thursday by a cross-party coalition spearheaded by Washington state Representative Michael Baumgartner.

Should the bill become law, it would prohibit the export of deep ultraviolet (DUV) lithography equipment to China, eliminating a pathway that Chinese semiconductor manufacturers have relied upon despite existing export restrictions.

ASML has maintained a policy against selling its cutting-edge EUV systems to China. However, DUV equipment, which plays a vital role in manufacturing memory semiconductors and parts for common consumer electronics, has stayed accessible through current Dutch export licensing procedures. The MATCH Act aims to eliminate this option.

The company’s shares plummeted as much as 4.7% during Amsterdam market hours before moderating to approximately 4.1% lower at €1,114 by midday. During US pre-market hours, shares traded at $1,286.76, representing a 1.32% decline.

Financial Impact Estimates Vary Among Experts

Analysts at Citi characterized their outlook as negative regarding these developments, though they refrained from providing detailed financial impact assessments.

JPMorgan’s analyst Sandeep Deshpande offered more concrete projections, suggesting that ASML’s earnings per share might decline by as much as 10% should the restrictions take effect. He acknowledged that revenue from alternative markets would grow, but indicated it would likely prove insufficient to offset Chinese market losses.

Michael Roeg, an analyst with Degroof Petercam, offered a less severe assessment, projecting the revenue impact would remain in the “single digit” percentage territory.

ASML representatives chose not to provide commentary on the matter. Dutch government officials stated that commenting on US legislative proposals falls outside their purview.

Understanding the MATCH Act’s Broader Purpose

The proposed legislation extends beyond ASML alone. According to its sponsors, the measure addresses vulnerabilities in the existing export control framework that China has taken advantage of due to inconsistent implementation among US allies.

ASML has indicated that China is expected to represent approximately 20% of its overall revenue in 2026. Exports of older, less sophisticated equipment would remain unaffected under the current legislative proposal.

The Dutch government now confronts increased pressure from Washington regarding export policy — a particularly delicate matter for a nation where ASML ranks among its most strategically significant corporations.

The most recent round of restrictions applied to ASML’s Chinese operations occurred in September 2024.

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