Key Takeaways
- The MATCH Act introduced by U.S. legislators would prohibit DUV lithography equipment exports to China
- Shares of ASML plunged as much as 4.7% in Amsterdam before settling at a 4.1% decline
- Roughly 20% of ASML’s projected 2026 revenue comes from the Chinese market
- A JPMorgan analyst predicts the legislation could reduce ASML’s earnings per share by as much as 10%
- The proposed legislation has support from both political parties and seeks to harmonize export controls across allied nations
Shares of ASML tumbled on Tuesday following the unveiling of proposed U.S. legislation that threatens to eliminate a critical revenue stream from the Chinese market.
The proposed legislation, called the MATCH Act — which stands for Multilateral Alignment of Technology Controls on Hardware Act — was presented last Thursday by a cross-party coalition spearheaded by Representative Michael Baumgartner from Washington state.
Should the measure become law, it would prohibit the export of deep ultraviolet (DUV) lithography equipment to China, effectively shutting down a sales pipeline that Chinese semiconductor manufacturers have relied upon within the present regulatory structure.
ASML has long been barred from shipping its cutting-edge EUV systems to China. However, DUV equipment, which is utilized in manufacturing memory semiconductors and parts for common electronic products, has remained accessible through existing Dutch export permits. The MATCH Act would eliminate this option.
The company’s shares fell by as much as 4.7% during Amsterdam trading before moderating to approximately 4.1% lower at €1,114 by midday. During U.S. premarket hours, shares traded at $1,286.76, representing a 1.32% decline.
Wall Street Analysts Differ on Impact Assessment
Citi’s research team characterized the development as negative for ASML’s outlook, though they refrained from providing precise financial impact estimates.
JPMorgan’s Sandeep Deshpande offered more concrete projections, suggesting that ASML’s earnings per share could decrease by up to 10% should these restrictions take effect. He noted that while revenue from alternative markets would likely grow, it probably wouldn’t fully compensate for the Chinese market losses.
Michael Roeg, an analyst at Degroof Petercam, presented a less severe assessment, projecting the revenue impact would remain in the “single digit” percentage territory.
ASML has chosen not to issue a statement on the matter. Dutch government officials indicated they would not comment on legislative proposals originating from the U.S. Congress.
Understanding the MATCH Act’s Broader Objectives
The legislation extends well beyond ASML alone. According to its sponsors, the bill aims to address loopholes in existing export regulations that China has leveraged due to inconsistent enforcement among U.S. partner nations.
“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 projected that Chinese customers will represent approximately 20% of its overall revenue in 2026. Shipments of older, less sophisticated equipment would remain unaffected based on the current legislative language.
The Dutch government now confronts mounting pressure from Washington regarding export regulations — a politically delicate matter for a nation where ASML ranks among its most strategically vital corporations.
The most recent restrictions imposed on ASML’s Chinese operations took effect in September 2024.
