Key Takeaways
- The MATCH Act, introduced by US legislators, seeks to prohibit exports of DUV lithography equipment to China
- Shares of ASML declined as much as 4.7% before settling at -4.1% during Amsterdam trading sessions
- Approximately 20% of ASML’s projected 2026 revenue comes from Chinese markets
- A JPMorgan analyst projects potential earnings per share reduction of up to 10% if enacted
- Bipartisan support for the legislation aims to align export controls across US partner nations
Shares of ASML experienced a significant decline on Tuesday following the unveiling of proposed legislation by United States lawmakers that threatens to eliminate a key revenue stream from the Chinese market.
The proposed legislation, dubbed the MATCH Act — an acronym for Multilateral Alignment of Technology Controls on Hardware Act — received introduction last Thursday from a bipartisan coalition spearheaded by Washington state Representative Michael Baumgartner.
Should the bill become law, it would prohibit the export of deep ultraviolet (DUV) lithography systems to China, effectively shutting down a sales avenue that Chinese semiconductor manufacturers have maintained access to under present export control regulations.
ASML has maintained a policy of not selling its cutting-edge EUV systems to China. However, DUV equipment, which plays a crucial role in manufacturing memory chips and components for standard consumer electronics, has remained accessible under current Dutch export licensing protocols. The MATCH Act would eliminate this option.
The company’s shares fell as steeply as 4.7% during Amsterdam trading hours before moderating to approximately 4.1% lower at €1,114 by mid-morning. During US pre-market sessions, shares traded at $1,286.76, representing a 1.32% decrease.
Financial Analysts Offer Varying Assessments
Analysts from Citi characterized the development as negative, though they refrained from providing detailed financial impact estimates.
JPMorgan’s Sandeep Deshpande offered a more concrete assessment, projecting that ASML’s earnings per share could decline by as much as 10% should these restrictions become reality. He noted that while revenue from alternative markets would likely grow, it probably wouldn’t fully compensate for the Chinese market losses.
Michael Roeg, an analyst with Degroof Petercam, presented a more conservative outlook, suggesting the revenue impact would remain within “single digit” percentage territory.
ASML chose not to provide commentary on the matter. Dutch governmental officials stated they would not comment on legislative proposals originating from the US Congress.
Understanding the MATCH Act’s Broader Purpose
The proposed legislation extends beyond ASML’s operations. According to its sponsors, the measure aims to address loopholes in existing export control frameworks that China has leveraged due to inconsistent restrictions among US allies compared to Washington’s policies.
“While the US has imposed extensive export controls to slow China’s semiconductor indigenization, US allies have not fully matched these measures,” Baumgartner’s office said in a statement on April 2.
ASML has projected that Chinese markets will represent approximately 20% of its overall revenue in 2026. Exports of older, less sophisticated equipment would remain unaffected under the current legislative proposal.
The Netherlands government now confronts diplomatic pressure from Washington regarding export policy — a particularly delicate matter for a nation where ASML ranks among its most strategically vital corporations.
The most recent restrictions applied to ASML’s Chinese operations took effect in September 2024.
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