ASML's sales to China remained strong in the first quarter despite restrictions on the export of high-end chipmaking equipment to China. China continues to be ASML’s largest market, accounting for 49% of system sales in the first quarter, while the proportion of sales from Taiwan decreased significantly. The US represented 6% of the sales, down from the prior quarter.
ASML, Europe’s most valuable technology company, has been affected by the US government’s efforts to impede China’s progress in the chip industry. The Biden administration urged the Dutch government to impose restrictions on the export of ASML’s immersion DUV lithography machines, its second-most capable category of machinery, to China starting from Jan. 1.
Despite these export controls, ASML anticipates “strong” demand from China to continue for the rest of the year. The company expects that up to 15% of its sales to China this year might be affected by the export control measures. Meanwhile, the US has been urging the Dutch government to prevent ASML from servicing and repairing restricted chipmaking equipment procured by Chinese companies before the current sales ban.
In the midst of slower demand from top chipmakers outside of China, strong sales in China come against a backdrop of declining demand from companies such as Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. Various countries, including Germany and the US, have committed substantial subsidies for chipmakers to build new wafer fabrication facilities in an effort to ensure domestic supplies. South Korea has unveiled plans for a $470 billion chipmaking hub, which is expected to boost demand for ASML equipment in the future.
