ASML Scales Back Job Cuts as Geopolitical and Technology Headwinds Gather Pace

ASML reduces Dutch job cuts to 650, delays High-NA EUV rollout to 2029, and faces potential DUV export ban to China, while posting strong profits and a 30% stock gain.

The Dutch lithography giant has reached a labour truce that sharply reduces planned job losses in its home market, even as the company faces a delayed rollout of its most advanced machines and a tightening noose on China sales. ASML struck a framework agreement with major Dutch unions on 12 May after eight rounds of talks, paring forced redundancies in the Netherlands from an initially feared 1,400 to around 650.

The deal, which still requires member approval, is more than a personnel matter. By halving management layers and granting development teams more autonomy, ASML aims to accelerate decision-making at a time when chipmakers demand ever-shorter innovation cycles. The social plan is due to start on 1 June 2026 and run for two years, featuring a nine-month window in which affected employees can find internal or external roles. Severance will exceed the legal minimum, with one gross monthly salary per year of service capped at €400,000 or 24 months. Workers aged 50 and over qualify for top-up payments, and those who sign a voluntary departure agreement early can receive a bonus of between €5,000 and €10,000. The restructuring is expected to cost more than €200 million.

Yet the relief on the labour front comes as two structural headwinds test ASML’s growth narrative. Its biggest customer, Taiwan Semiconductor Manufacturing Company (TSMC), plans to deploy ASML’s next-generation High-NA EUV systems only from 2029, citing the machines’ price tag of over €350 million apiece. That pushes the expected broad rollout from the 2027/2028 target ASML had previously signalled. Bernstein analysts, however, view the delay as neutral to slightly positive, arguing that High-NA adoption was always likely to wait for chip generations around 2030.

On the geopolitical front, the MATCH Act under discussion in the US threatens to ban exports of older DUV lithography tools to China completely. The impact is already visible: China’s share of ASML’s revenue fell to 19% in the first quarter of 2026, roughly half the level seen earlier. Analysts estimate a full DUV prohibition could clip about 5% from the group’s total sales.

Despite these clouds, ASML’s financials remain robust. The company posted a quarterly profit of €2.8 billion and is targeting full-year revenue of up to €40 billion. Its order book covers nearly a full year of sales, providing a thick cushion. The stock closed Tuesday at €1,292.80 (or €1,293 according to another reading), posting a 30.81% gain since the start of the year and an 89.28% advance over twelve months. The valuation, however, is stretched: the price-to-earnings ratio stands at 48.7, well above the five-year median of 39.1. US inflation running at 3.8% in April has dimmed hopes for rate cuts, putting pressure on capital-intensive technology names.

To steer through the technology cycle, ASML has appointed Marco Pieters as its new head of technology. A 25-year veteran of the company, Pieters will oversee the lithography roadmap as customers pivot to complex 3D chip architectures. His task is complicated by cost and timing questions around High-NA EUV tools.

On the demand side, a potential Apple-Intel chipmaking partnership could offset some of the TSMC slowdown. Bank of America estimates that iPhone processor orders could generate €4.6 billion in EUV tool revenue for Intel, a key ASML customer. Meanwhile, the union vote on the social plan is the next near-term hurdle. Approval would give ASML operational breathing room. But the bigger drivers of the share price remain the interplay of interest rates, the valuation premium, and the pace at which High-NA adoption—and China policy—crystallise.