ASML (ASML) shares fell early Tuesday as the Dutch chipmaker was reportedly being lined up by the White House for tougher restrictions on its China business. In Europe, ASML (DE:ASME) was down over 2% at the start of trading as markets turned their attention to tariffs and trade again.
Trump to Tighten Chip Controls More
President Donald Trump is looking to tighten up chip export controls on China introduced by the previous administration to limit the country’s artificial intelligence capabilities, Bloomberg reported.
Apparently, Dutch officials have met U.S. counterparts to discuss ASML chipmaking operations, with Bloomberg saying the talks looked at restricting their engineers from maintaining semiconductor gear in China. ASML designs and manufactures equipment used to make computer chips.
Last month, Dutch prime minister Dick Schoof said he expected Trump to push hard on ASML export controls. U.S. officials also met counterparts from Japan to look at the operations of Tokyo Electron Ltd (TOELF), with the company’s shares in Japan (JP:8035) sliding on the news report.
NVDA Also Mentioned
NVDA, which reports earnings this week, was also mentioned in the Bloomberg report, with the White House said to be looking at toughening restrictions on sales to China, underscoring the Trump administration’s hawkish stance on China.
The aim is to align rules for the likes of ASML and Tokyo Electron with existing U.S. curbs on companies including Lam Research (LRCX), KLA (KLAC) and Applied Materials (AMAT), which supply the necessary tools and materials used for the manufacturing of semiconductors.
Officials are also said to be looking at the three-tier approach to exports which divides nations into three categories. This layered approach, intoduced in the final week of the Biden administration, places countries into three categories, with a limited number of U.S. allies in the first group with unlimited access to U.S. technology. The second includes U.S. adversaries who cannot import any chips. The third features a majority of countries from the Middle East and Asia who would face a limit on the total amount of computing power they could import.
It comes after Trump signed a memorandum on Friday directing the Committee on Foreign Investment in the United States to restrict Chinese investments in strategic areas. The memo said China is “exploiting our capital and ingenuity to fund and modernize their military, intelligence, and security operations, posing direct threats to United States security.”
Is ASML a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on ASML stock, based on five Buys and two Holds. The average ASML price target of $915.31 implies over 24% upside.
