ASML's Stellar Q1 Marred by US Export Threat and TSMC's High-NA Pause

ASML posted strong Q1 2026 earnings and raised guidance, but a potential US export clampdown on China and TSMC's postponement of High-NA EUV machines sent shares down 5% from a 52-week high.

ASML kicked off the week with a fresh 52-week high, but by Friday the euphoria had evaporated. The Dutch lithography giant saw its shares close at €1,295.20 — a drop of roughly 5% from that peak — as two separate clouds gathered over an otherwise brilliant quarter.

First, the numbers: revenue hit €8.8 billion in the first quarter of 2026, comfortably ahead of expectations. Net profit came in at €2.8 billion, while earnings per share reached €7.15, beating the consensus estimate of €6.00. The gross margin stood at 53%. Management raised its full-year revenue forecast to a range of €36 billion to €40 billion, citing accelerated fab build-outs by TSMC, Samsung and Intel. CEO Christophe Fouquet summed up the demand side succinctly: "The demand for chips exceeds supply."

Yet two headwinds are now sapping investor confidence. The first is geopolitical. A bipartisan bill in the US Congress known as the MATCH Act seeks to close a loophole that currently allows ASML to export its older DUV lithography machines to China. If passed, the legislation would bring those systems under the same export restrictions already applied to the more advanced EUV tools. ASML’s China exposure has already shrunk sharply — the region’s share of system revenue fell from 36% in the fourth quarter of 2025 to 19% in the first quarter — but JPMorgan analyst Sandeep Deshpande warns that a full ban could shave up to 10% off earnings per share. ODDO-BHF’s Stephane Houri noted that the bill is still in its early legislative stages, while Bernstein, Berenberg and Goldman Sachs have all maintained their buy ratings.

The second concern comes from ASML’s most important customer. TSMC appears to be pushing back the deployment of ASML’s high-end High-NA EUV machines until at least 2029. These systems command the fattest margins and are central to ASML’s long-term profitability story. The delay, first flagged in the primary source, adds a layer of technology risk to the near-term political uncertainty.

On Wall Street, analysts remain largely constructive. The stock has gained over 31% year-to-date, and Friday’s retreat came after a rapid run-up. But the convergence of a potential US export clampdown and a major customer’s postponement of the most lucrative product line creates a tricky balancing act. For ASML investors, the next catalytic events are clear: the MATCH Act’s progress through the US Senate and TSMC’s next capex update. Record order books can only paper over so much risk.