UPDATE: The AI sector is reeling as semiconductor giant ASML has seen its stock plummet nearly 9% following a turbulent quarterly report and heightened tariff pressures from the U.S.-China trade conflict. This sudden downturn raises urgent concerns about the stability of the AI supply chain.
Just reported, ASML’s CEO, Christophe Fouquet, has significantly downgraded expectations for the company’s growth, citing “increasing uncertainty driven by macro-economic and geopolitical developments.” This statement comes at a critical time, with global tensions impacting AI chipmakers across the board.
The U.S. has imposed a 25% tariff on semiconductor tools under Section 232 and 301 trade rules, while China retaliated with 34% duties on U.S. chip exports. This escalating tariff battle has turned the once-promising AI landscape into a complicated minefield for investors.
The ripple effects of these tariffs have already hit major players hard. Nvidia recently reported a staggering $4.5 billion writedown on its China-bound H20 chips due to an export ban in April. AMD is also feeling the pinch, having to apply for export licenses to return its MI308 processors to Chinese data centers. The strain is palpable, as U.S. giants like Applied Materials and Lam Research anticipate annual losses exceeding $1 billion from these tariffs.
Despite ASML’s solid Q2 performance, which included €7.7 billion in net sales and €2.29 billion in profit, the company’s outlook for Q3 fell short of analyst expectations. Management forecasts sales between €7.4 billion and €7.9 billion, below the €8.3 billion consensus. Furthermore, ASML has cut its 2025 full-year net sales target to reflect a mere 15% growth, drastically down from its previous estimate of €30 billion to €35 billion.
The implications of these developments are vast. U.S. customers like Intel and TSMC are now left vulnerable to further policy shifts that could complicate the already fragile AI supply chain. Investors are bracing for more turbulence as trade talks unfold and each new headline could drastically impact the sector.
As this situation develops, ASML’s stock performance will be closely monitored by investors and analysts alike. The ongoing trade tensions and tariff implications highlight a significant turning point for the AI industry, which has previously been viewed as a beacon of growth.
For now, as uncertainty looms, the question remains: how will the AI sector adapt to these emerging challenges? Stay tuned as we continue to follow this urgent situation.
