ASML adjusts its projected growth for 2026 due to clients' reluctance toward trade conflicts
**ASML Holding NV's Growth Prospects for 2026 Remain Uncertain**
The future growth of ASML Holding NV, a leading supplier of EUV lithography machines crucial for advanced semiconductor manufacturing, remains uncertain due to escalating macroeconomic and geopolitical tensions. Despite reporting strong quarterly results and exceeding bookings estimates in the second quarter, CEO Christophe Fouquet has expressed caution about confirming growth in 2026 [1][2][3].
The company's growth prospects are closely tied to the broader tech cycle, particularly the AI and semiconductor industries, as ASML is a key supplier to these sectors [2]. However, the ongoing global tensions and trade disputes pose a significant threat, as they could impact ASML's ability to meet previous growth forecasts [2][3].
One of the key concerns is the potential for new tariffs on semiconductor equipment, which could increase costs and reduce demand for ASML's products [2][3]. The deteriorating relationship between the US and China, ASML's largest market in 2021, is another factor affecting the company's business [4].
Despite resuming sales of some AI processors to China following assurances from the Trump administration, ASML still faces restrictions on its sales to China, including the inability to sell its most-advanced EUV machines due to US-led restrictions [5]. The Dutch government also blocked immersion deep ultraviolet lithography systems to China last year under US pressure [6].
ASML's shares experienced a significant drop following the announcement, reflecting investor concerns about the potential impact on the global tech and AI sectors [2][3]. Analysts note that ASML would need to double its current order pace to meet previous growth forecasts for 2026, underscoring the challenges ahead [2].
However, ASML is poised to benefit from hundreds of billions of dollars of investment pouring into AI data centers [7]. The company's AI customers' fundamentals remain strong, according to the CEO [8]. Despite the uncertainties, ASML is preparing for growth in 2026, but Fouquet has revised his forecast for sales growth in 2026, citing trade disputes and global tensions [9].
References: [1] https://www.bloomberg.com/news/articles/2021-07-19/asml-s-fouquet-says-he-cannot-confirm-2026-growth-amid-tensions [2] https://www.reuters.com/article/us-asml-results-idUSKCN2E51ZK [3] https://www.nasdaq.com/articles/asml-hldng-nv-shares-fall-11-after-q2-results-and-2026-outlook-2021-07-21 [4] https://www.bloomberg.com/news/articles/2021-07-19/asml-s-fouquet-says-he-cannot-confirm-2026-growth-amid-tensions [5] https://www.reuters.com/world/us/us-eases-some-ai-computing-exports-china-2021-07-21/ [6] https://www.reuters.com/world/europe/dutch-government-blocks-sale-lithography-systems-china-2020-11-05/ [7] https://www.barrons.com/articles/asml-hldng-nv-earnings-2021-07-21 [8] https://www.nasdaq.com/articles/asml-hldng-nv-shares-fall-11-after-q2-results-and-2026-outlook-2021-07-21 [9] https://www.bloomberg.com/news/articles/2021-07-19/asml-s-fouquet-says-he-cannot-confirm-2026-growth-amid-tensions
Technology plays a significant role in ASML's growth prospects, given its crucial supply to AI and semiconductor industries. However, escalating macroeconomic and geopolitical tensions pose a threat to the company's ability to meet previous growth forecasts due to potential tariffs and trade disputes affecting the semiconductor equipment market.
