In general, I'm suspicious of anyone that dismisses China's market size by saying it is only 15% of ASML's revenue or that it can easily be replaced by some one else with little consequence for ASML or other tools makers. That shows fundamentally that they do not understand China has almost a fully supply chain for this industry including raw materials. No other country can say that. Japan has most of it, but doesn't have natural resources. America has a lot of it but also misses out on front end scanners and various raw materials.
In the end, China represents 50% of the world's market for chips. There is no getting around that. ASML clients that make up remaining 85% of their revenue are still selling heavily to China. If you ban export of your equipment to China, it will just very quickly make up with domestic products that are probably at 90% the capability. And the moment that China produces an operational EUV, ASML doesn't just lose out on the current 15% revenue to China but also 1/3 of the other 85% revenue to fabs in Taiwan/SK that produce CPUs/GPUs for Chinese customers.
Recession isn't the only reason Intel and AMD are having layoffs. All this directives in China to buy local is simply leading to less orders from China for Intel and AMD CPUs. And unlike 10 years, America can't blame China for telling its companies to buy local. It's not selling any advanced chips to China.
Anyways, SMIC/Huahong have their earnings call on Thursday. 11/11 is Friday, which will mean new products and pricing will be unveiled. I expect there to be a lot of news this week.
