ASML's European revenue share dropped to 0% in Q1 and Q2 2026, down from 1% in 2025 and 5% in 2024; ASML is urging EU authorities to create demand for EU chips
Subsidies for fabs do not help. … As the world's only supplier of EUV lithography systems, ASML is Europe's largest company …
Context & Ripple Effects
ASML entered 2026 after an uneven demand cycle: its 2024 quarterly sales and bookings had softened, while China accounted for nearly half of its first-half 2024 sales. By July 2025, management said it was preparing for growth but could not confirm it amid threatened US tariffs on the EU.
The disappearance of European revenue from ASML’s reported mix turns its appeal to EU authorities into a demand-side argument: fab subsidies alone do not ensure European chipmakers will buy enough locally made chips to support the equipment ecosystem.
First-order effects
- ASML’s European home market contributes no reported revenue in the first two quarters of 2026, increasing the company’s reliance on chip demand outside Europe.
- EU authorities face a more pointed request from Europe’s sole EUV supplier: stimulate purchases of EU-made chips rather than limiting support to fab construction.
Second-order effects
- European chipmakers and their customers become the practical test of any EU demand measure, since additional fab capacity without committed chip buyers does not translate into equipment orders for ASML.
- ASML’s exposure to external markets becomes more consequential as trade policy uncertainty, highlighted in its 2025 growth warning tied to threatened tariffs, intersects with weak European demand.
Third-order effects
- If Europe builds fabrication capacity faster than it develops durable local chip demand, its semiconductor strategy risks leaving critical equipment suppliers dependent on overseas purchasing cycles.
- The episode points toward industrial policy that links capacity incentives to demand creation across the chip supply chain, rather than treating fab investment as a self-sufficient objective.
The trend: Europe’s chip-policy debate is shifting from financing fabrication capacity toward securing the end-market demand needed to sustain a regional semiconductor supply chain.