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ASML Prepared for China’s Grip on Rare Earths, CFO Says
The semiconductor toolmaker stated that it has inventory and alternatives for rare earth supplies, and that it’s expecting a decline in its China sales.
CEO of Dutch tech giant ASML, Christophe Fouquet (L) and CFO of ASML, Roger Dassen (R) speak during the presentation of the company's quarterly and annual results in Veldhoven, the Netherland, on Jan. 29, 2025. Rob Engelaar/ANP/AFP via Getty Images
ASML is prepared for the Chinese regime’s tighter curbs on rare earth materials, its Chief Financial Officer Roger Dassen said on Wednesday.
The Dutch chip toolmaker is one of the companies affected by China’s new restrictions announced on Oct. 9, which require exporters to seek licenses from Dec. 1 for products containing more than 0.1 percent of rare earth ingredients sourced from China.
Speaking to reporters on Wednesday, Dassen said the company is well prepared for potential disruptions.
“We have inventory, we have alternatives. But of course, you have the impact on us directly that we’re navigating,” Dassen said.
“If you talk about the next three years ... it’s important that the world is able to continue to trade and that we do not end up in a situation where we get limitations in that regard.”
China produces over 90 percent of the world’s processed rare earths and rare earth magnets, which ASML needs in its machines.
On the same day, ASML’s CEO Christophe Fouquet said he’s expecting a significant decline in Chinese demand.
Presenting the companies financial results for the third quarter, he said: “We believe that the demand of our Chinese customers is going to be significantly lower in 2026 than it has been in 2024 and 2025 when we had very strong business there.”
Dassen said the expected decline in China sales is not due to previous stockpiling of chip machines by its Chinese customers.
In a call with investors, the CFO said the high sales in China in the past years was the result of “a substantial backlog” because of the previous underserving of the Chinese market, although the company was “quite surprised” that China sales this year were “as strong as they are.”
Fouquet said that the backlog resulted in a level of demand from China in the past two to three years that was “very high and in no way normal,” and that this is expected to fall to a “more reasonable” level in 2026.
China has been the world’s largest buyer of chipmaking tools since 2020, prompting a group of U.S. lawmakers to call for new restrictions on ASML’s exports to China this month.
In a report published on Oct. 7, the U.S. Congress’s Select Committee on the CCP said that Chinese firms were able to exploit gaps in export controls to buy “vast quantities of highly sophisticated SME [semiconductor manufacturing equipment] from the United States, Japan, and the Netherlands,” spending $38 billion in 2024 on SME from five tool makers.
According to the committee, in 2024, ASML received 36 percent of its revenue from China, while four other SME makers from Japan and the United States received 36 percent to 44 percent of their revenues from China.
The committee said that all five firms have cooperated with its investigation. It called for more country-wide export controls targeting China, and for Japan and the Netherlands to catch up to U.S. export controls and enforcement.
A spokesperson for ASML told The Epoch Times that the company is expecting its China sales to account for above 25 percent of its global revenue in 2025.
