ASML Shares Drop on Proposed US China Sales Curbs

Shares of Dutch semiconductor equipment giant ASML fell on Tuesday in Amsterdam, reacting to a proposed U.S. bill that could impose new restrictions on the company's sales to China. The legislation, introduced by American lawmakers last week, would target ASML's deep ultraviolet (DUV) immersion lithography tools if enacted and enforced by the Netherlands, marking the first such curbs since September 2024. These machines are essential for etching intricate circuitry onto computer chips, and ASML holds a dominant position in the market, though it competes with Japan's Nikon and China's SMEE.

The stock dropped as much as 4.7 percent early in the session before paring some losses, trading 4.1 percent lower at 1,114 euros by 11:00 GMT. Analysts expressed concern over the potential fallout. "We view this prospect negatively," Citi analysts wrote in a research note, highlighting risks to ASML's revenue stream.

ASML has projected that China will account for 20 percent of its total sales in 2026, but the proposed rules would spare sales of older-generation machines. The company declined to comment on the bill. Meanwhile, the Dutch government stated it would not weigh in on proposals from...