ASML earnings drag semiconductor stocks lower

Core Insights - ASML reported a 61% sequential decline in bookings during the first quarter, exceeding investor expectations for a downturn in the semiconductor equipment market [1] - The drop in bookings has negatively impacted major chip stocks, with AMD, Nvidia, Intel, Qualcomm, and Arm experiencing significant declines [1][2] - ASML's CEO, Peter Wennink, anticipates a stronger second half of 2024 as the semiconductor industry begins to recover from the current downturn [2][3] Company Performance - ASML's total bookings for machines fell by 4% year-over-year, indicating a potential slowdown in the semiconductor industry [2] - The company shipped 449 lithography machines in 2023, with its top two customers accounting for over half of its sales [1][2] - ASML's stock fell over 8% on a day when the S&P 500 index was down less than 1%, highlighting the market's reaction to the company's performance [1] Industry Implications - The decline in orders from foundries like TSMC and Samsung suggests a potential downturn in chip production, which could affect sales for companies like Nvidia and Apple [2] - Licensing companies such as Arm may see reduced revenue as fewer chips are produced due to the decline in manufacturing equipment sales [2] - Government subsidies, such as the CHIPS Act in the U.S., are expected to boost ASML's sales as companies like Intel and TSMC plan to increase orders for lithography machines later this year [3]