Key Takeaways
- The MATCH Act proposes to prohibit exports of deep ultraviolet lithography systems to China
- Shares of ASML declined as much as 4.7% during Amsterdam trading before settling at -4.1%
- Approximately 20% of ASML’s projected 2026 revenue comes from Chinese customers
- JPMorgan projects potential earnings per share reduction of up to 10% if the legislation passes
- Bipartisan support backs the legislation designed to align export controls across US allies
Shares of ASML experienced significant pressure on Tuesday following the introduction of proposed legislation by US lawmakers that threatens to eliminate a major revenue stream from the Chinese market.
Representative Michael Baumgartner of Washington state led a bipartisan coalition in presenting the legislation last Thursday. The proposed law carries the name MATCH Act — Multilateral Alignment of Technology Controls on Hardware Act.
The legislation targets deep ultraviolet (DUV) lithography equipment exports to China. Passage of this bill would eliminate a sales avenue that Chinese semiconductor manufacturers currently utilize within present export control regulations.
ASML has maintained a policy of withholding its cutting-edge EUV systems from Chinese buyers. DUV equipment, which serves the production of memory semiconductors and components for standard consumer electronics, has remained accessible through current Dutch licensing protocols. The MATCH Act seeks to eliminate this access.
Shares fell to a low of 4.7% during Amsterdam market hours before recovering somewhat to settle near 4.1% down at €1,114 by mid-morning. US pre-market activity showed the stock trading at $1,286.76, reflecting a 1.32% decline.
Financial Analysts Offer Varied Projections
Citi research team members expressed concerns about the development, characterizing their outlook as negative, while refraining from providing specific financial impact estimates.
JPMorgan’s Sandeep Deshpande offered more concrete figures, projecting that ASML’s earnings per share could decline by as much as 10% should the restrictions become law. His analysis acknowledged that revenue from alternative geographic markets would likely expand, though probably insufficient to offset the Chinese market losses.
Michael Roeg of Degroof Petercam presented a more conservative assessment, placing potential revenue impact within the “single digit” percentage range.
ASML representatives chose to withhold comment on the matter. Dutch government officials stated that commenting on proposed US legislative measures falls outside their purview.
Understanding the MATCH Act’s Broader Objectives
The proposed legislation extends beyond ASML’s operations. Sponsors of the bill describe its purpose as addressing weaknesses in existing export control structures that China has leveraged due to inconsistent implementation among US 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’s financial projections indicate Chinese markets will represent approximately 20% of total company revenue during 2026. Legacy systems and less sophisticated machinery would remain unaffected by current legislative proposals.
The Dutch government now confronts Washington’s expectations regarding export policy — a delicate matter for a nation where ASML ranks among its most strategically valuable corporations.
The most recent application of new limitations on ASML’s Chinese operations occurred in September 2024.
