AI Surge Drives ASML Orders Past Estimates, But CEO Warns of 'Significant' Decline in China Sales
ASML Holding, the world’s leading manufacturer of semiconductor production equipment, delivered stronger-than-expected results for the third quarter of 2025. Despite this solid performance, the company cautioned investors about an anticipated decline in demand from China during the next financial year.
The Dutch technology group reported net bookings of approximately €5.4 billion (about $6.27 billion), slightly above the market consensus estimate of €5.36 billion, according to figures from Visible Alpha. This increase was largely driven by heightened investment in AI-capable chips, which boosted demand for extreme ultraviolet (EUV) lithography systems. Orders for EUV machines reached €3.6 billion, substantially above the €2.22 billion analysts had projected.
For the same quarter, net sales reached €7.5 billion, within the company’s guidance range of €7.4–€7.9 billion. Net profit rose modestly year-over-year to €2.13 billion, surpassing analyst expectations, while gross profit totaled €3.88 billion, corresponding to a 51.6% margin—the upper end of ASML’s forecast. During the company’s earnings call, Chief Executive Christophe Fouquet warned that demand from China, which has been a major revenue driver in recent quarters, is likely to weaken next year. He stated that China-related net sales in 2026 may fall sharply compared to the strong results recorded in 2024 and 2025 (ASML earnings statement, October 2025). Even so, Fouquet maintained a positive overall outlook, noting that total company revenue in 2026 should remain at least in line with 2025 levels. He added that improved industry sentiment and steady orders from global chipmakers were helping to offset uncertainty in the Chinese market.
Market analysts echoed this cautious optimism. Michael Roeg of Degroof Petercam commented (via Reuters) that the better-than-expected bookings indicate ASML is unlikely to see a sales decline next year and may even post slight growth. The company said it plans to release detailed 2026 targets in January 2026. Looking ahead to the current quarter, ASML expects sales between €9.2 billion and €9.8 billion, with a gross margin in the 51–53% range. Management reaffirmed the firm’s full-year 2025 forecast, projecting annual revenue growth of about 15%, to roughly €32.5 billion, and a gross margin near 52%. The company continues to see long-term growth opportunities driven by artificial intelligence and advanced semiconductor production. ASML estimates that the global AI boom could propel its annual sales to between €44 billion and €60 billion by 2030 (company outlook presentation).
Geopolitical dynamics remain a complicating factor for the semiconductor sector. A U.S. Congressional report released earlier this year noted that five major chip equipment suppliers, including ASML, sold about $38 billion worth of technology to China in 2024, with some sales involving entities flagged as national security risks (U.S. House Committee report, 2024). Additionally, the Dutch government recently invoked emergency powers under the Goods Availability Act to take control of Chinese-owned Nexperia, citing national security concerns—an event underscoring the tense global landscape surrounding chip technology.
