ASML, a leading force in semiconductor manufacturing, is facing challenges amid new shifts in global trade policies. On Monday, its stock declined by 3.3% following the announcement of U.S. tariff plans targeting eight NATO countries, including the Netherlands where ASML is based. These potential tariffs, beginning at 10% and escalating to 25% by June 1, could significantly disrupt the global semiconductor landscape.
The Importance of ASML in Chip Manufacturing
ASML holds a near-monopoly on advanced lithography machines, essential for semiconductor production. These cutting-edge machines, which cost up to $400 million each, are critical for producing the chips powering AI, electronics, and countless other technologies. In 2024, the U.S. represented 16% of ASML’s revenue, showcasing America’s reliance on this European technology provider.
What’s Driving the Stock Volatility?
Recent threats of tariffs jeopardize not only ASML but also U.S.-based chipmakers such as Intel and Micron, who depend on ASML’s high-tech machines. Similarly, Taiwan Semiconductor Manufacturing Company (TSMC) and other global tech giants, who are expanding U.S. operations, are vulnerable to this policy.
The semiconductor industry has witnessed robust growth recently, with ASML shares soaring 25% earlier in 2026 and its valuation skyrocketing to an impressive $522 billion. Analysts, like Morgan Stanley, believe ASML’s stock still holds the potential for a 70% surge, driven by the increasing demand for AI chips and memory improvements. However, geopolitical risks, such as these tariffs, result in market uncertainty.
Potential Industry-Wide Impacts
Other European semiconductor companies also felt the ripple effects of ASML’s slump. Germany’s Infineon Technologies and France’s STMicroelectronics also saw their stocks decline. Despite this, the accelerated AI-related growth in semiconductor demand ensures ASML’s importance in the market remains undiminished in the long term.
Expert Recommendation: If you’re investing in semiconductor-related stocks, consider monitoring geopolitical developments and diversifying your portfolio. Tools like the ASML 2026 Investor Guide can help you navigate the market more effectively.
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