ASML’s reduced 2024 sales forecast, driven by delayed orders from Intel and TSMC, highlights Europe’s struggle to balance innovation with geopolitical realities amid US-China trade tensions.
ASML trimmed its 2024 sales growth forecast to 10% on 24 June 2024 as US-China chip equipment restrictions stalled orders, testing Europe’s €43 billion Chips Act ambitions.
ASML’s Order Slump Reflects Geopolitical Pressures
ASML’s 24 June announcement of lowered sales forecasts—attributed to deferred orders from Intel and TSMC—underscores the fragility of Europe’s semiconductor ecosystem. The Dutch firm, which holds a 90% monopoly on EUV lithography systems, faces mounting trade barriers as US export controls disrupt Chinese chipmaker SMIC’s access to advanced tools. ‘ASML is caught in the crossfire of tech nationalism,’ noted Paul Triolo, Associate Director at Albright Stonebridge Group, in a 25 June analysis for CSIS.
EU Chips Act Accelerates Funding Amid Fragmentation
The European Commission fast-tracked €4.5 billion in Chips Act subsidies on 25 June, prioritizing ASML and Belgium’s IMEC research hub. However, STMicroelectronics’ 28 June restructuring—cutting 1,500 EU jobs to focus on silicon carbide (SiC) chips—reveals diverging priorities. ‘Europe risks splitting its strategy between cutting-edge R&D and legacy manufacturing,’ warned SEMI Europe President Laith Altimime in a 26 June press statement.
TSMC’s US Expansion Reshapes Global Dynamics
TSMC’s confirmation of Q1 2025 production starts at its Arizona fab (26 June), backed by $65 billion in US CHIPS Act grants, signals a pivot toward regionalized supply chains. This shift pressures EU suppliers like ASML to align with Washington’s tech curbs, despite 34% of ASML’s 2023 revenue coming from China. ‘Reshoring is creating competing tech blocs,’ cautioned NCC Group’s 26 June report, noting 78% of firms now prioritize regional suppliers.
Analytical Context: Lessons From Past Tech Shifts
Europe’s current semiconductor challenges mirror its 2010s struggles in mobile chip innovation. While ASML’s EUV breakthroughs (commercialized in 2017) initially secured Europe’s leadership, the 2021 global chip shortage exposed overreliance on Asian foundries. Similarly, the US CHIPS Act’s 2022 passage triggered a subsidy race that now pressures EU policymakers. As automakers face 20% cost hikes from delayed 2nm node adoption—per NCC Group’s data—the bloc must reconcile its R&D strengths with the realities of a Balkanized supply chain.
