Libertarians love to cite President Ronald Reagan’s claim that the scariest words in the English language are “I’m from the government, and I’m here to help.” Investors in chipmakers know the feeling. The whims of politicians threaten to puncture their exuberant expectations.
ASML, the Dutch company with a de facto monopoly on machines that make high-end silicon, went into a share-price tailspin on Tuesday after cutting its 2025 revenue forecast. By Wednesday the company had lost 20 per cent of its market value, or about €65bn, leaving it at €250bn — still equivalent to one-quarter of the Netherlands’ GDP.
One problem is that some customers have fallen on hard times and pushed back orders. ASML’s extreme ultraviolet machines, at up to $380mn apiece, aren’t exactly an impulse purchase: next year it expects to sell 50 tools rather than the 80 it previously hoped. The chip-intensive artificial intelligence boom remains intact, but only accounts for 15 per cent of ASML’s sales, UBS analysts reckon.