Why Chip Stocks Could Get Hit Hard in June
The ongoing twists and turns of the U.S.’s face-off with China has the potential to derail America’s chip sales to that country, and also sales of chip-making equipment, as explored in the Technology Trader column in Barron’s magazine last month.
Today, longtime semiconductor observer Robert Maire mulls whether the apparent lack of progress between the White House and China means next month will bring greater restrictions on sales of chips and equipment.
He sees, in particular, a risk that the US will not only tighten some chip sales to China but also sales of chip-making equipment. That could in particular include ASML (ASML), the maker of the most cutting-edge “lithography” tools for fabricating semiconductor circuits.
Unlike Lam Research (LRCX), KLA-Tencor (KLAC), and Applied Materials (AMAT), ASML, which is headquartered in Veldhoven, in the Netherlands, could be the “perfect political choice,” Maire believes.
"Blocking ASML sales to China would not directly impact a US based company,” he points out.
Moreover, any ban on sales "would not impact ASML (former Cymer) employees in San Diego as they are needed for all other ASML customers," Maire continues. "The Netherlands is probably low on the administrations radar (even if found on a map...). In short ASML EUV sales are a politically perfect target and pawn in the trade wars.