ASML, Others Outline Impact Of Trump’s Tariffs

A number of organisations have outlined the financial consequences of the tariffs that US President Donald Trump unleashed in the past couple of weeks.

ASML Holdings, the world’s largest chip-making equipment supplier, for example has warned in its first quarter financial report, that “the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while.”

Meanwhile Reuters, citing two sources familiar with the matter, reported that according to industry calculations discussed with officials and lawmakers in Washington last week Trump’s new tariffs could cost US semiconductor equipment makers more than $1 billion a year.

Tariff costs

The sources told Reuters that each of the three largest US chip equipment makers – Applied Materials, Lam Research and KLA – may suffer a loss of roughly $350 million over a year related to the tariffs.

Smaller rivals such as Onto Innovation may also face tens of millions of dollars in extra spending, Reuters noted.

The extra costs seem to because these chip equipment makers can require thousands of specialised parts.

Meanwhile the Netherlands-based ASML, posted its Q1 financial results.

For the three months ending 30 March, ASML posted a net profit of 2.33bn euros (£2bn), up from 1.22bn euros (£1.04bn) in the same year ago quarter.

Revenues were 7.7bn euros (£6.6bn), up from 5.3bn euros (£4.5bn) a year earlier.

ASML said that the tariffs were increasing uncertainty around its outlook for 2025 and 2026, but stood by its annual guidance.

“Our first-quarter total net sales came in at €7.7 billion, in line with our guidance,” ASML President and CEO Christophe Fouquet said. “Our conversations so far with customers support our expectation that 2025 and 2026 will be growth years.”

“However, the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while,” said Fouquet. “As previously shared, artificial intelligence continues to be the primary growth driver in our industry. It has created a shift in the market dynamics that benefits some customers more than others, contributing to both upside potential and downside risks as reflected in our 2025 revenue range.”

Meanwhile Reuters noted ASML CFO Roger Dassen in a call with reporters said the Dutch group is ready to pass most of the tariff costs onto customers.

“The burden of tariffs from our vantage point should be allocated in a fair way,” Dassen reportedly said. “We think that those taking it in the United States should, therefore, take the lion’s share of that allocation.”

Dassen reportedly said that ASML’s US operations were an asset because of the talent there, not tariffs.

ASML is the second largest semiconductor equipment manufacturer in the US, he reportedly said, with about 20 percent of its workforce there.

Trump’s tariffs

Trump’s so called “Liberation Day” sweeping “reciprocal” tariffs have mostly been scaled back to 10 percent and paused for 90 days, after days of plunging  stock and bond markets, coupled with warnings of a self-inflicted recession.

But the trade war between the United States and the People’s Republic of China (PRC) continues, with Trump raising tariffs on Chinese imports to the US to 125 percent, and then up to 145 percent.

Beijing then hit back and raised its tariffs on US goods from 84 percent to 125 percent.

All of this comes as chip equipment makers are already dealing with the loss of billions of dollars in revenue after former US President Joe Biden implemented a series of export controls aimed at curbing the shipment of advanced semiconductor manufacturing equipment to Chinese entities.