City of Hollywood Firefighters’ Pension Fund v. ASML Holding N.V.

Case Summary:

BLB&G represents co-lead plaintiffs City of Hollywood Firefighters’ Pension Fund, City of Hollywood Police Officers’ Retirement System, and Police & Fire Retirement System of the City of Detroit in this securities class action brought on behalf of investors that purchased ASML ordinary shares on the Nasdaq Stock Market during the Class Period.  The action asserts claims against ASML and certain of its current and former senior executives for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

ASML manufactures photolithography machinery that is an essential component in the fabrication of semiconductor chips.  These machines, which ASML sells to chip manufacturers around the world, use powerful lasers to create the tiny integrated circuitry embedded on computer chips.

In November 2022, ASML told investors that by 2025 it would generate sales between €30 billion and €40 billion, and a gross margin between 54% and 56%.  In March 2023, the Dutch government announced plans to implement new regulations further restricting the export of certain semiconductor technology to China.  Following this announcement, ASML benefitted from strong demand from customers in China as chipmakers rushed to order the company’s products before the export restrictions became effective.

The action alleges that, throughout the Class Period, ASML and its executives misrepresented ASML’s growth prospects and the strength of demand for its chip-building machinery, as well as the expected impact of new regulations restricting the export of semiconductor technology.  Specifically, defendants repeatedly claimed that ASML was poised to deliver on its optimistic financial targets for 2025 due to several factors, including the increased proliferation of artificial intelligence and the significant number of chip manufacturing plants being built around the world.  Defendants also downplayed concerns about the impact that tighter export regulations would have on ASML’s business, assuring investors that “we continue to see strong demand . . . in China” and “one thing is for sure, China will remain very strong in our numbers also in 2024.”  As a result of these misrepresentations, ASML ordinary shares traded at artificially inflated prices during the Class Period.

The truth began to emerge on October 15, 2024, when ASML announced financial results for the third quarter of 2024, a day earlier than previously scheduled, purportedly due to a “technical error.”  ASML disclosed net bookings of just €2.6 billion, representing a 53% decline from the prior quarter and missing analysts’ estimates by €3 billion.  As a result, ASML cut its 2025 guidance.  The company now expected 2025 net sales of between €30 billion and €35 billion, at the bottom half of its previous range of €30 billion to €40 billion.  ASML also reduced its gross margin target to between 51% and 53%, down from its prior guidance of 54% to 56%.

The next day, ASML attributed its “low order intake” to a “slow recovery” of the semiconductor industry, which will “extend well into 2025.”  ASML also revealed that its sales in China had declined to “a more normalized” level and it expected those sales to be around 20% of total revenue in 2025, implying a significant decline compared to the prior year.  ASML further disclosed that the decline in China sales would negatively impact the company’s gross margins.  These disclosures caused the price of ASML ordinary shares to decline precipitously.

Case Status:

On November 14, 2024, BLB&G filed a securities class action against ASML and certain of its current and former senior executives in federal court in New York on behalf of City of Hollywood Firefighters’ Pension Fund.  On March 6, 2025, the court granted a motion for appointment of Hollywood Firefighters, City of Hollywood Police Officers’ Retirement System, Police & Fire Retirement System of the City of Detroit, City Pension Fund for Firefighters and Police Officers in the City of Miami Beach, and City Pension Fund for Firefighters and Police Officers in the City of Pembroke Pines as lead plaintiffs and BLB&G as co-lead counsel.  Lead plaintiffs filed their amended complaint on May 13, 2025.