Core Insights - ASML has warned of a significant decline in its China business for 2026, despite reporting stable net profits for Q3 2025 [3][4] - The company reported net profits of 2.13 billion euros ($2.5 billion) for Q3 2025, slightly up from 2.08 billion euros in the same quarter last year, with net sales of 7.5 billion euros [3][6] - ASML's shares rose over 3% in Amsterdam, driven by solid sales and orders for its semiconductor production machines [2] Financial Performance - Net sales for Q3 2025 were in line with guidance, reflecting a good quarter for ASML, with expectations for Q4 sales between 9.2 billion and 9.8 billion euros [4][5] - For the full year 2025, ASML predicts a 15% increase in total net sales, with net bookings at 5.4 billion euros, slightly down from 5.5 billion euros in Q2 [7] Market Dynamics - Sales to China accounted for 42% of ASML's overall business in Q3 2025, up from 27% in Q2 [7] - The geopolitical landscape is affecting ASML, with US and Dutch export restrictions on advanced chipmaking tools to China amid rising tensions [2][8] - The company anticipates that the expanding AI market will drive annual sales to between 44 billion and 60 billion euros by 2030 [8] Geopolitical Context - A recent US Congressional report indicated that ASML and four other companies sold $38 billion worth of critical technology to China in 2024, raising national security concerns [9] - Tensions have escalated between China and the Netherlands, particularly after the Dutch government took control of the Chinese-owned chipmaker Nexperia due to national security issues [10]