ASML, ASMI and BESI down hard on AEX: here's what's going on

Dutch chip stocks will take a beating on the stock market on Tuesday. ASML, ASM International (ASMI) and BE Semiconductor Industries (BESI) are among the biggest decliners within the AEX. The sales wave is not limited to Amsterdam. Across Europe, tech companies are under pressure, while investors are once again nervous about rising interest rates.

The declines are striking, because the chip sector has recently benefited greatly from the optimism around artificial intelligence. There does not appear to be any sudden setbacks at the three Dutch companies. Investors are mainly taking profits off the table now that conditions in the financial markets are becoming less favourable.

ASML was about 4.6 percent lower on Tuesday afternoon. ASMI lost around 5.8 percent and BESI also lost roughly 5.5 percent. This puts the three chip companies at the bottom of the AEX.

The picture is also negative outside the Netherlands. Among others, STMicroelectronics, Infineon and Soitec were under pressure. This indicates that investors do not respond to one problem at a Dutch company, but to weakness within the entire sector.

A major cause is rising bond yields. As a result, borrowing costs increase worldwide. Technology companies in particular are sensitive to this. Many of these companies have high valuations based on strong earnings growth in the coming years. If interest rates rise, that future profit will be worth less to investors today.

Higher oil prices and the associated concerns about inflation are also playing a role. If inflation persists, central banks can keep interest rates higher for longer than investors hope.

At the same time, profit taking plays a role. European technology stocks had climbed to the highest levels since June before the current downturn. The AI rally has sharply boosted the valuations of various chip companies.

This makes the sector vulnerable as soon as sentiment changes. Investors who have previously entered at lower prices may decide to secure a portion of their profits. The relatively low trading volumes in late summer can also strengthen price movements.

ASML, ASMI and BESI are all closely linked to the global chip industry. ASML supplies lithography machines with which chip manufacturers apply patterns to chips. ASMI makes equipment for important steps in the production process, while BESI specialises in machines for assembling and packaging chips.

As a result, the three shares are strongly reacting to changes in the expectations around investments by chip manufacturers and the huge expenditure on AI infrastructure.

For ASML, the underlying picture remains strong for the time being. The company raised its revenue forecast for 2026 to 43 to 45 billion euros last month. ASML also reported that order intake remained “extremely strong” in the first half of the year. For 2027, the planned production capacity for a significant part of the EUV machines is now almost completely covered by orders.

There is also a geopolitical risk at ASML. US Secretary of Commerce Howard Lutnick previously expressed concerns that an advanced EUV machine or parts thereof may have ended up in China. The sale of these machines to China is prohibited by export restrictions.

ASML emphatically contradicts this view. CEO Christophe Fouquet previously said that no EUV machine has been shipped to China. According to him, ASML knows where its delivered machines are located. The company has also taken measures to shield personnel in China from sensitive EUV technology.

The issue is not new and therefore does not explain the price declines of ASML, ASMI and BESI on Tuesday in itself. However, the discussion about China is an additional uncertainty for ASML. The company expects to generate about one-fifth of its sales from China this year. As a result, further US export restrictions may become important for investors.

On Tuesday, the broader stock market climate appears to be the culprit for the three Dutch chip companies. The combination of rising interest rates, high valuations and profit-taking touches technology stocks across Europe. The fact that the three Dutch chip companies are at the bottom of the AEX at the same time fits into that sector-wide picture.