Global AI rush helps ASML beat orders estimates, but China outlook dims

By Nathan Vifflin and Toby Sterling (Reuters) -ASML, the world's biggest supplier of computer chip-making equipment, reiterated on Wednesday it expects to benefit from booming AI investment, even as it warned Chinese demand was expected to significantly drop next year. CEO Christophe Fouquet said Europe's largest tech firm by market capitalization was seeing "continued positive momentum around investments in AI." That boom was helping customers both in advanced logic chips – those used in smartphones and AI datacenters – and advanced memory chips also needed for AI. Shares, which have surged 37% since the start of September, were up 3.2% in morning trading to 873.80 euros. The results follow a flurry of mega deals between AI firms and chipmakers, notably plans by OpenAI in the past month to build $1 trillion or more in data centre capacity. That portends more demand for chips, which make up around half the cost of data centres. Net bookings, the most closely-watched earnings figure, were 5.40 billion euros ($6.27 billion) in the third quarter, versus analysts' consensus estimate of 5.36 billion euros. CHINA DECLINE FOLLOWS BOOM YEARS ASML said it expects Chinese sales to fall "significantly" next year, after having made up nearly half of company sales in 2024 and a third so far in 2025. CFO Roger Dassen said on a media call the decline was a "normalization" and not due to stockpiling amid the U.S.-China trade war. U.S.-led export restrictions mean ASML cannot sell its most advanced tools in China, a point of contention between the superpowers, with China recently tightening control of exports of rare earth metals. ASML said it would not be affected by those restrictions in the short term. ASML said sales will be, at worst, flat in 2026, from around 32.5 billion euros ($37.82 billion) in 2025. "We believe the bearish view of a worse than expected 2026 will be put to rest and the market will focus on the extent the company can grow in 2027", JPMorgan analysts said. ASML's lithography tools, key for making chip circuitry, are sold to TSMC of Taiwan – which makes most AI chips for Nvidia – and to other logic chip firms such as China's SMIC and Intel . It also serves memory chip makers like Samsung, SK Hynix and Micron. The company reported third-quarter net income of 2.12 billion euros, in line with the 2.11 billion euros analysts expected, according to LSEG IBES data.          ($1 = 0.8607 euros) (Reporting by Toby Sterling in Amsterdam, Nathan Vifflin in Gdansk; Editing by Matt Scuffham, Kim Coghill and Bernadette Baum)

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