ASML Stock Sinks On Proposed China Trade Restrictions

Proposed U.S. legislation would further restrict China’s semiconductor industry from accessing chip gear from Netherlands-based ASML (ASML). ASML stock fell on the news Monday.

The draft legislation, called the Match Act, would ban sales of deep ultraviolet (DUV) lithography equipment to Chinese chipmakers SMIC, CXMT, YMTC, Hua Hong and Huawei.

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DUV equipment is a step below ASML’s extreme ultraviolet (EUV) lithography gear, which is already banned from export to China.

ASML currently sells DUV gear to Chinese chipmakers as does Japan’s Nikon. But the Match Act would add that equipment to the restricted trade list. Match is an acronym for “Multilateral Alignment of Technology Controls on Hardware.”

In a report Monday, Bernstein analysts led by David Dai said the Match Act is “far stricter than any previous restrictions on China’s semiconductor industry.”

If enacted, the Match Act would prevent China’s semiconductor industry from expanding its manufacturing capacity and effectively cap it at mature nodes, Dai said. That would curb its ambitions to develop domestic capability to make chips for artificial intelligence.

ASML Stock Is On Tech Leaders List

On the stock market today, ASML stock fell 1% to close at 1,304.01.

Bernstein noted that the Match Act is very early in the legislative process and has yet to be referred to committee, marked up or voted on. The earliest the bill would be considered is likely December, the firm said.

However, President Donald Trump could use existing executive authority under the Export Administration Regulations to direct the Bureau of Industry and Security in the Commerce Department to implement equivalent rules via rulemaking, bypassing Congress entirely. Under that scenario, the stricter export rules could be enacted within weeks to months, Dai said.

It also is possible that Trump could use the proposed chip-gear restrictions as a “bargaining chip” in trade talks with China, Dai said. China’s key leverage area is its supply of rare earth minerals.

ASML stock is on the IBD Tech Leaders list.

Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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