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ASM to Pass Tariff Costs to Customers, Maintains Competitive Edge

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ASM International, Europe’s second-largest semiconductor equipment supplier, announced it will pass on any tariff-related cost increases to customers and the broader value chain. In a meeting with Bank of America analysts, ASM’s CEO and CFO emphasized that the company’s manufacturing flexibility ensures it won’t be at a disadvantage compared to global peers.

Key Points:

  • ASM said it would adjust pricing to offset potential cost pressures from U.S. trade tariffs, a strategy aligned with competitors like ASML, which previously stated that U.S. chipmakers would bear the bulk of such costs.

  • The Dutch company manufactures wafer fab processing equipment, vital for chipmakers like Intel and TSMC as they adopt next-gen Gate-All-Around transistor designs.

  • In other areas, ASM competes with major U.S. firms like Applied Materials and LAM Research, and is noted to be more exposed to the U.S. market than other European peers such as ASML and BE Semiconductor.

Market Outlook:

ASM also provided a bullish forecast for China, saying Chinese sales could hit the high end—or exceed—their 2025 guidance. The company previously estimated that China would represent between 20–29% of its total sales in 2025.

This positive outlook aligns with ASML’s recent commentary, which noted stronger-than-expected Chinese demand in its own Q1 report.

Despite rising geopolitical tensions and trade restrictions, ASM appears confident in navigating the shifting global semiconductor landscape, leveraging pricing power, regional flexibility, and strong demand from Asia.

China’s Chipmaking Equipment Purchases Expected to Decline in 2025

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China’s spending on chipmaking equipment is projected to decline this year after three consecutive years of growth, driven by overcapacity and U.S. sanctions, according to a report released by Canadian semiconductor research firm TechInsights on Wednesday.

China has led global purchases of wafer fabrication equipment for the past two years, buying $41 billion worth of tools in 2024 and accounting for 40% of global sales. However, spending is expected to fall to $38 billion in 2025, a 6% year-over-year decline, with China’s share of global purchases dropping to 20%, marking the first decrease since 2021, according to Boris Metodiev, a senior semiconductor manufacturing analyst at TechInsights.

“We can see some slowdown in Chinese spending due to export controls and overcapacity,” Metodiev stated during an online seminar.

China had been a key growth driver in the global wafer fabrication equipment sector in 2023 and 2024, even as demand for consumer electronics declined globally. Much of the country’s recent equipment purchases were spurred by stockpiling in response to U.S. sanctions aimed at limiting China’s access to advanced chip technology, particularly those with potential military applications.

Despite these sanctions, Chinese companies such as Semiconductor Manufacturing International Corporation (SMIC) and Huawei have made advancements. Last year, they produced an advanced chip using more labor-intensive and costly methods. Chinese firms have also expanded significantly in the mature-node chip segment, boosting production capacity and gaining market share from Taiwanese competitors.

However, SMIC warned on Wednesday of potential oversupply risks in the mature-node chip market.

Leading Chinese equipment manufacturers like Naura Technology Group and AMEC have also expanded globally, with Naura now ranking as the world’s seventh-largest equipment maker by sales. Despite these efforts to bolster self-sufficiency, China still faces significant challenges in producing lithography systems and testing and assembly tools.

Dutch company ASML, the largest manufacturer of lithography machines, continues to dominate this sector. In 2023, Chinese companies provided only 17% of the testing tools and 10% of the assembly equipment used within the country, Metodiev added.