ASML on Tuesday offered the first glimpse into how U.S. restrictions on exports of its advanced chip manufacturing tools to China will impact its sales in the Asian country.

A day after a profit warning that rocked the stock market, executives at ASML Holding said the slower-than-expected recovery in the microchip market will have the sharpest impact on sales to China while having a relatively minor impact on sales of its most advanced systems elsewhere in the world.

Investors in the semiconductor sector are facing renewed uncertainty following a sobering outlook from ASML Holding NV, one of the world’s leading chip equipment manufacturers. The Dutch company’s revised forecast triggered a sharp decline in global chip stocks,

ASML's deep forecast cuts that sparked a global tech stock selloff signal overcapacity at chip factories rather than a slowdown in global semiconductor demand, analysts said. While the weaker 2025 sales outlook from the chip equipment maker on Tuesday raised fears of faltering global semiconductor demand,

ASML posted orders below analysts’ expectations as chip makers held back spending on key production equipment in anticipation of a rebound in semiconductor demand.

ASML’s downgraded 2025 sales forecast has sparked a major sell-off in chip stocks, causing concerns about potential faltering global chip demand. However, analysts suggest the issue may lie in factory overcapacity rather than a decline in demand.