Amidst China’s expansion of restrictions on rare earth exports, Roger Dassen, the Chief Financial Officer of ASML, the world’s largest semiconductor equipment supplier, stated on Wednesday (October 15) that although it is difficult to assess the long-term impact on the chip ecosystem, the company is “fully prepared” for it.
Last Thursday (October 9), China announced new regulations requiring overseas companies to obtain approval before exporting products containing specific rare earth materials originating from China. ASML uses these crucial materials in the magnets and batteries inside their lithography machines.
Following the release of the company’s third-quarter financial report, Dassen emphasized to reporters that ASML has a “long lead time” and ensures that there is “sufficient material available in the supply chain for the coming months to address short-term impacts.”
China’s move is seen as the first exercise of extraterritorial jurisdiction against foreign companies in the chip industry. In response, President Trump announced last Friday (October 10) a 100% tariff increase on Chinese goods and implemented export controls on key software.
Despite ASML’s optimism about rare earth supply, the company also warned that the demand and sales to Chinese customers are expected to “significantly decline” in 2026.
Dassen explained that the decline in sales is not due to customers previously stockpiling idle equipment, but rather a contrast to the abnormally strong purchases in 2024 and 2025; next year’s demand will tend to “normalize.”
Analysts believe that the previous strong purchases were driven by China customers trying to deploy equipment before stricter regulations take effect, due to the ongoing tightening of restrictions on advanced chip manufacturing equipment exports by the United States. ASML’s China orders accounted for 42% of total sales in the third quarter.
ASML’s equipment is crucial for manufacturing cutting-edge chips. Due to US restrictions, the company has never sold its most advanced extreme ultraviolet lithography machines to China. Last year, the Dutch government also banned the sale of immersion deep ultraviolet lithography systems to China – the company’s second-strongest performing equipment – to align with the US’s further expanding restriction policies.
However, ASML’s CEO, Christophe Fouquet, stated that with strong investment in artificial intelligence (AI) driving growth, the company remains optimistic about overall growth and expects total net sales in 2026 to be no lower than the level in 2025.
(This article referenced reports from Bloomberg, CNBC, and Reuters.)