Prospects for a glut in the Chinese market and Intel’s plans are forcing analysts to lower their forecast for ASML’s revenue dynamics

Less than a month is left before the Dutch company ASML publishes its next quarterly report, but industry analysts are already forming their own recommendations for the securities of this supplier of equipment for producing chips, based on the unfavorable conditions in the Chinese market and Intel’s refusal to build plants in Germany.

Image Source: ASML

Formally, Intel recently only announced its intentions to refrain from implementing a project to build two advanced enterprises in Germany with a total value of 30 billion euros due to problems with its financing, but anything can happen during a two-year pause, and therefore not all experts are sure that construction will begin at all. In any case, Intel will not need additional ASML equipment in the next two years, which means that the Dutch supplier will miss out on some of the potential benefits.

This is the reasoning of Morgan Stanley representatives, whose comments are cited by Reuters. ASML shares had already lost 30% in July and August, and Morgan Stanley’s comments this week triggered a further 2.7% decline. In addition to the impact of Intel’s latest decisions to reduce the cost of building new plants, ASML shares will come under pressure from the RAM market, which is unlikely to show demand growth in the foreseeable future, except for the HBM segment.

In addition, by 2026, the Chinese market for ASML will cease to be the main driver of revenue growth, as analysts suggest. Currently, it provides up to half of the company’s revenue, but combined with increased sanctions, it will begin to show oversaturation in the foreseeable future. Accordingly, it will no longer be able to show the same growth rates. Moreover, sanctions from the authorities of the Netherlands and the United States may increase. On the other hand, 2025 will be a good year for ASML in many ways, as the brand’s cutting-edge equipment will continue to be in high demand amid the ongoing AI boom.