ASML and Lam Research Navigate US Chip Restrictions with Continued Focus on China

Thursday, October 19, 2023

ASML and Lam Research Navigate US Chip Restrictions with Continued Focus on China

The evolving landscape of the global semiconductor industry, marked by the escalating US chip curbs, has seen two industry leaders, ASML and Lam Research, maintain a significant focus on the Chinese market. ASML, the Dutch semiconductor behemoth, has reported a remarkable surge in its sales to China. As they dominate the market for DUV lithography machines, essential for chip production, sales to China for ASML soared to €2.44 billion ($2.58 billion) in the recent quarter, nearly doubling the figures from the previous one. Meanwhile, Lam Research, a US chipmaking equipment supplier for CVD, ALD and Etch, is experiencing a year-on-year decline in revenue by 31.4% to $3.5 billion in the quarter ending Sept. 24, remains buoyant about the Chinese market. With China accounting for a staggering 48% of its total revenue, up from 30% the previous year and 26% in the preceding quarter, CEO Tim Archer remains optimistic. He emphasized that the new U.S. export restrictions brought no unforeseen challenges and anticipates sustainable business growth in China, citing the country's long-term objectives.

Photo : ASML on X

However, it's not all smooth sailing. As the US and the Netherlands tighten their grip on chip equipment exports in an attempt to curb China's burgeoning semiconductor industry, challenges arise for these giants. Notably, Lam Research's shares fell by over 5% in extended trading after Archer's announcement. Furthermore, even though both ASML and Lam Research foresee continued demand from China, the trajectory remains uncertain with the intricate web of export controls and regulations. Still, with giants like KLA, Applied Materials, Tokyo Electron, and the aforementioned firms steering the ship, the semiconductor industry remains hopeful about navigating these turbulent waters.