ASML Holding fell 4% on February 26, 2026, leading declines across European and US semiconductor stocks after Washington's 10% global tariff went into effect three days earlier. Applied Materials dropped 4%, while AMD and Broadcom declined 3% each, despite Nvidia posting strong Q4 2025 earnings that would typically lift the sector.
The tariffs hit Europe's semiconductor manufacturers at a critical moment. ASML supplies extreme ultraviolet lithography machines essential for advanced chip production, with 40% of revenue from Asian markets now facing higher import costs. STMicroelectronics and Infineon Technologies also rely on trans-Atlantic supply chains vulnerable to tariff disruption.
Brussels has not announced countermeasures, but European Commission officials are reviewing options under the EU Chips Act. The 2023 legislation allocated €43B to boost domestic semiconductor production to 20% of global capacity by 2030, up from 9% currently. Industry groups warn tariffs could delay these timelines by raising equipment costs 8-12%.
Analyst estimates show European chip firms face €2-4B in additional annual costs if tariffs persist through 2027. ASML's machines cost €150-200M each; a 10% tariff adds €15-20M per unit. Smaller firms like Nordic Semiconductor and Dialog Semiconductor lack pricing power to pass costs to customers, threatening margins already compressed by China's economic slowdown.
The sell-off contradicts fundamentals. Nvidia reported $22.1B Q4 revenue, up 265% year-over-year, driven by AI data center demand that benefits European suppliers. Analysts expected chip stocks to rally 5-7% post-earnings. Instead, tariff concerns triggered concentrated selling.
EU trade officials meet March 15 to discuss semiconductor tariff impacts. Options include WTO dispute proceedings, reciprocal tariffs on US tech imports, or accelerated subsidies for European fabs. Germany's economy ministry proposed €8B in emergency funding for domestic chip production, pending Bundestag approval.
Investor focus now shifts to March earnings calls from ASML and STMicroelectronics, where executives will quantify tariff impacts on 2026 guidance. Semiconductor stocks remain 12% below January peaks, underperforming the Stoxx Europe 600 by 8 percentage points since tariff implementation.