ASML CEO Christophe Fouquet says he expects a slow chip market recovery to extend “well into 2025” due to “customer cautiousness”, as the US' China rules bite
Context & Ripple Effects
ASML entered this period after its CFO described the industry downturn as having bottomed and a recovery as nascent; Fouquet’s assessment indicates that the hoped-for recovery is proving more drawn out than that earlier signal suggested.
The company had already said that updated US export curbs would reduce China sales over the medium to long term. That policy exposure makes customer caution consequential not only for ASML’s near-term order environment but also for the geographic mix of its business.
First-order effects
- ASML must plan for a slower equipment-demand rebound through well into 2025 as customers defer or scrutinize capital-spending commitments.
- Customers exposed to US China rules face added uncertainty around which tools they can buy and deploy, reinforcing caution in lithography-equipment purchasing.
Second-order effects
- A delayed recovery can push chipmakers and their equipment suppliers to sequence capacity additions more conservatively, extending the semiconductor investment downturn beyond an initial bottoming phase.
- ASML’s peers and suppliers face a less predictable demand backdrop, while export-control constraints increase the value of sales opportunities outside China.
Third-order effects
- If restrictions and customer caution persist together, semiconductor-equipment demand may become less tied to a single global cycle and more shaped by trade-policy eligibility and regional capacity plans.
- The episode reinforces a contracted semiconductor cycle in which equipment spending can lag an eventual improvement in chip demand; the duration will depend on customers’ investment decisions and future rule changes.
The trend: Geopolitical export controls are increasingly interacting with the semiconductor capital-expenditure cycle, making equipment recoveries slower and more regionally uneven.