Key Highlights
- U.S. legislators unveiled the MATCH Act, targeting DUV lithography equipment exports to China
- Shares of ASML declined up to 4.7% during Amsterdam trading before settling at -4.1%
- Approximately 20% of ASML’s projected 2026 revenue originates from China
- JPMorgan forecasts potential earnings per share reduction of up to 10%
- Bipartisan legislation seeks to align export controls across U.S. allied nations
Shares of ASML experienced a significant decline on Tuesday following the introduction of proposed legislation by U.S. lawmakers that threatens to eliminate a critical sales pathway into the Chinese market.
The proposed legislation, dubbed the MATCH Act — an acronym for Multilateral Alignment of Technology Controls on Hardware Act — was put forward last Thursday by a cross-party coalition spearheaded by Representative Michael Baumgartner from Washington state.
Should the legislation become law, it would prohibit the export of deep ultraviolet (DUV) lithography equipment to China, effectively shutting down a sales channel that Chinese semiconductor manufacturers have continued to utilize within the current regulatory framework.
ASML has maintained a policy of not selling its most sophisticated EUV systems to China. However, DUV equipment, which plays a crucial role in manufacturing memory chips and components for standard consumer electronics, has remained accessible under current Dutch export licensing regulations. The MATCH Act would terminate this access.
The company’s shares fell as steeply as 4.7% during trading in Amsterdam before moderating to approximately 4.1% lower at €1,114 by midday. During U.S. pre-market hours, shares were priced at $1,286.76, representing a 1.32% decline.
Financial Impact Estimates Vary Among Analysts
Citi’s research team indicated they “view this prospect negatively,” although they refrained from providing comprehensive financial impact projections.
JPMorgan’s analyst Sandeep Deshpande offered more concrete figures, projecting that ASML’s earnings per share could decrease by as much as 10% should these restrictions be implemented. He noted that while sales in alternative markets would likely expand, they would probably fall short of compensating for the revenue loss from China.
Meanwhile, Degroof Petercam analyst Michael Roeg adopted a more conservative outlook, suggesting the revenue impact would likely remain in the “single digit” percentage territory.
ASML representatives chose not to provide commentary on the matter. Dutch government officials stated it would be inappropriate to comment on legislative proposals originating from the U.S. Congress.
Understanding the MATCH Act’s Broader Objectives
The proposed bill extends well beyond ASML alone. According to its sponsors, the legislation aims to address vulnerabilities in existing export control frameworks that China has leveraged due to inconsistent implementation among U.S. allies.
“While the US has imposed extensive export controls to slow China’s semiconductor indigenization, US allies have not fully matched these measures,” Baumgartner’s office said in a statement on April 2.
ASML has publicly projected that China will represent approximately 20% of its overall revenue in 2026. Exports of older, less technologically advanced equipment would remain unaffected under the proposed measures.
The Netherlands government now confronts mounting pressure from Washington regarding export policy — a particularly delicate matter for a nation where ASML stands as one of its most strategically vital corporations.
The most recent round of restrictions applied to ASML’s Chinese operations occurred in September 2024.
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