Dutch exports to China dropped in March, implying that shipments from $ASML Holding (ASML.US)$ neared clearing a backlog of orders from China.
ASML makes the most advanced machines used in chip production, known as extreme ultraviolet, or EUV, lithography tools to produce the chips necessary for premium smartphones and computers.
The EUV lithography market was worth $10.09 billion in 2023 and could reach $35.70 billion by 2032, implying a CAGR of 15.1% from 2024 to 2032.
Chinese researchers announced the creation of the N-polar gallium nitride (GaN) wafer at eight inches (20.3 cm), which could slash production costs by 40%, thereby speeding up global adoption of the technology in satellite communications and electric vehicles (EVs), SCMP reported Tuesday.
Experts consider the GaN a flagship third-generation compound semiconductor catering to high-frequency, high-power applications, including 5G/6G networks, satellite communications, autonomous vehicles, and radar systems.
Industry analysts told the SCMP that GaN could trigger shifts across these sectors once mass-production technology reaches its critical point.
Meanwhile, the Street awaited clarity on the risks posed by U.S. President Donald Trump on the semiconductor industry when computer chip equipment maker ASML reports first-quarter earnings on Wednesday.
On Sunday, Trump offered respite to ASML from the 10% "baseline" tariffs as he prepares to impose a sector-wide tariff on chips.
ASML's net bookings will likely reach 4.89 billion euros ($5.56 billion) in the first quarter, Reuters cited Visible Alpha estimates.
The U.S. accounted for 17% of ASML's revenue in 2024. The share will likely grow as Trump seeks to push chipmaking investments back to the U.S. and a slowdown in Chinese spending.
ASML's biggest customer, Taiwan Semiconductor Manufacturing Co (NYSE:TSM), has committed over $100 billion to five new factories in Taiwan.
ASML stock plunged 34% in the last 12 months as it grappled with the Biden administration's embargo on China. Additionally, struggling chipmaker Intel Corp (NASDAQ:INTC) is a key client of ASML. Therefore, reports of a possible takeover or split of the company may impact ASML demand.
Morningstar analyst Javier Correonero told Reuters that he does not expect chipmakers to refuse ASML technology due to the tariffs. He also highlighted that ASML's EUV has no substitute in certain instances.
Still, Mizuho and Jefferies analysts expect Chinese chipmakers to stock up in the first quarter in fear of more semiconductor embargoes on its trading partners.
