Chip industry has another headache because of Mr. Trump

An ASML specialized truck. Photo: Bloomberg .

In a statement on April 16, ASML said that the company's chip manufacturing machine orders in the first quarter were lower than expected, and predicted that US President Donald Trump's tariff policies would create instability across the industry.

“The recent tariff announcements have increased uncertainty in the macro environment, which will remain volatile for some time,” the Dutch company said.

ASML shares fell 5% following the announcement, adding to a sell-off in chip stocks, according to the WSJ .

ASML makes some of the world’s most advanced chipmaking machines, used in many artificial intelligence (AI) systems. As demand for AI explodes, sales of less sophisticated machines used to make chips in cars and smartphones are slowing.

ASML's total order value in the first quarter is estimated at 4.45 billion USD , lower than analysts' forecast ( 5.51 billion USD ).

In October 2024, ASML cut its 2025 sales forecast, saying some segments of its semiconductor business (other than AI) would take longer than expected to recover. The company forecasts revenue this year could reach $34 billion to $40 billion .

ASML CEO Christophe Fouquet said the company could hit its highest revenue target this year if demand for AI remains strong, but he said uncertainty among some customers could keep the company’s revenue low.

Cost is also a big question. Earlier this year, Chinese startup DeepSeek announced it had developed a large language model that was as efficient as many of its American rivals, while being trained on older chips.

The trade tensions also pose risks for ASML and other chip companies. While they are currently exempt from tariffs, the Trump administration is investigating whether to include semiconductors in a separate tariff list.

Tariffs could impact ASML and the broader semiconductor industry in a number of ways, Chief Financial Officer Roger Dassen said.

According to Dassen, the possibility of a third country imposing tariffs on goods imported by ASML from the US is also a scenario being considered.

“We are actively working with the entire ecosystem to try to minimize the overall impact,” Dassen said.

The comments came as ASML reported first-quarter revenue of $8.79 billion , up from $6.01 billion in the same period last year. The company's net profit was $2.68 billion , with a gross profit margin of 54%.

ASML estimates second-quarter revenue of $8.18 billion to $8.75 billion , with a gross margin of 50 to 53 percent. That’s a wider-than-usual range given the uncertainty surrounding tariffs.

AMD processors and memory chips. Photo: Bloomberg .

In addition to tariffs, the Trump administration has also announced new restrictions on semiconductor exports to China. AMD estimates a maximum cost loss of $800 million after evaluating export licensing requirements for the MI308 product.

Previously, Nvidia announced that it could lose $5.5 billion when the H20 chip line was banned from being exported to China, unless it had a license.

Trump’s new executive order builds on previous US regulations aimed at restricting China’s access to advanced semiconductors. During Joe Biden’s term, the US has implemented many controls with the aim of protecting national security.

According to Bloomberg , shares of Nvidia and AMD fell 7% and 8.1% respectively in the opening trading session on April 16.

Source: https://znews.vn/nganh-chip-lai-dau-dau-vi-ong-trump-post1546544.html