ASML’s €8.8 Billion Quarter Hides a Geopolitical Earthquake: China Revenue Halved, 1,700 Jobs Cut

ASML posts strong Q1 results with €8.8B revenue, but China's share plunges to 19% amid export controls. The company cuts 1,700 managers and hires 1,400 engineers to boost efficiency.

The Dutch chip-equipment titan ASML delivered a first-quarter performance that, on the surface, reads like a triumph. Revenue hit €8.8 billion, net profit landed at €2.8 billion, and the gross margin of 53 percent scraped the ceiling of management’s own forecast. Yet beneath those headline numbers, two tectonic shifts are reshaping the company: a geopolitical retreat from China and an internal restructuring that will see 1,700 managers shown the door while 1,400 engineers are hired to replace them.

The China story is the most dramatic. In the span of a single quarter, the country’s share of ASML’s revenue collapsed from 36 percent to 19 percent. The culprit is not market forces but a tightening web of export controls from Washington and The Hague. Early April brought the MATCH Act, a fresh piece of US legislation designed to further restrict shipments of advanced chipmaking machinery to China. ASML’s management in Veldhoven is taking the hit in stride. The company raised its full-year revenue guidance to a range of €36 billion to €40 billion, lifting the floor by €2 billion from the previous forecast. Strong demand from the US and Europe, fueled by the relentless buildout of artificial-intelligence infrastructure, is more than filling the gap left by Chinese customers.

Production capacity, not demand, is now the binding constraint. ASML plans to deliver at least 60 of its high-end extreme ultraviolet (EUV) lithography systems this year. Under ideal conditions, that number could climb to 80 in 2027. The bottleneck is the sheer complexity of building these machines, which cost hundreds of millions of euros each and take months to assemble. Investors are betting that scarcity will keep pricing power intact. The stock traded at around €1,190 on Wednesday, up roughly 104 percent over the past twelve months.

A Restructuring That Cuts Deep

While the sales machine hums, ASML is quietly dismantling layers of its own bureaucracy. The company is eliminating approximately 1,700 positions, or about 4 percent of its global workforce. The cuts target middle managers and coordination roles — group leaders and project managers who, in the view of the executive team, have added complexity without commensurate value. The goal is to flatten hierarchies and speed decision-making.

In their place, ASML is creating roughly 1,400 new engineering roles focused on technical development. To manage the transition, the company plans a six-week hiring freeze this summer. The net effect is a leaner, more technically oriented organization, even as the total headcount shrinks by roughly 300.

The restructuring comes with a leadership shuffle. Marco Pieters has been appointed chief technology officer, while CFO Roger Dassen and operations chief Frédéric Schneider-Maunoury have secured contract extensions. The new team faces a busy second quarter: management is guiding for revenue between €8.4 billion and €9.0 billion, with a slightly lower gross margin.

Shareholders Get Their Payday

At the annual general meeting in late April, shareholders approved a final dividend of €2.70 per share. Combined with interim dividends already paid, the total distribution for the year rises to €7.50, a significant increase from the prior year. The shares have been trading ex-dividend since April 27.

The dividend hike underscores a broader message from ASML: the company is generating enough cash to reward investors even as it invests heavily in capacity and restructures its workforce. The only real limit on growth, as the first quarter made clear, is how fast ASML can build its own machines.