ASML gave a first glimpse Tuesday of how U.S. restrictions on exports of its advanced chip-making tools to China will affect its sales in the Asian country.

The Netherlands-based chip equipment maker said in its earnings report on Tuesday, released a day early due to a “technical error,” that it expected net sales of between 30 billion euros and 35 billion euros ($32.7 billion) in 2025 38.1 billion US dollars). This is in the lower half of the range previously specified by ASML.

ASML is an important part of the global chip supply chain. The company’s extreme ultraviolet lithography machines are used by many of the world’s largest chipmakers – from Nvidia To Taiwan semiconductor manufacturing – to produce advanced chips.

While the company’s net sales reached 7.5 billion euros in the third quarter, beating expectations, net bookings were 2.6 billion euros ($2.83 billion), the company said. This was well below the LSEG’s consensus estimate of 5.6 billion euros.

In response, ASML shares plunged as much as 16% on Tuesday, causing the company to lose more than $50 billion in market capitalization in a single day, CNBC calculations using LSEG data show .

Apart from the disappointment in bookings, which analysts said was due to weakness in a select number of customers, including Intel and Samsung – AMSL also hinted at how geopolitical tensions are putting pressure on its 2025 outlook.

Roger Dassen, ASML’s chief financial officer, said Tuesday he expects the company’s China business to report a “more normal percentage in our order book and also in our business.”

UBS analysts said the change in ASML’s 2025 forecast was mainly due to delays in the development of new logic factories by Intel and Samsung. The new forecast implies that sales to China would decline by 25 to 30 percent in 2025.

ASML’s China-based customers have been stockpiling the company’s less advanced machines to avoid U.S. export restrictions on the Dutch company and maintain access to its crucial technology that allows them to make chips for the electronics industry.

Due to previous restrictions, ASML has never sold its most advanced extreme ultraviolet lithography, or EUV, machines to Chinese customers.

Instead, chip companies in the country have opted to order ASML’s deep ultraviolet lithography, or DUV, machines. DUV machines are ASML’s second-tier lithography systems that are critical to manufacturing the circuitry of chips.

Last year, ASML generated 29% of its sales in China. It is now expected that China’s contribution will fall to around 20% of its total sales in 2025.

Sales to China rose dramatically in the first three quarters of 2024 as customers rushed to purchase ASML’s DUV machines amid export restrictions in the United States and the Netherlands.

In the company’s second-quarter 2024 earnings presentation, ASML said it generates up to 49% of its revenue in China.

In September, the Netherlands expanded export restrictions on advanced chip manufacturing equipment by bringing licensing requirements for ASML machines under its jurisdiction, taking control from the United States of the machines ASML is allowed to export to other countries.

The move meant the Dutch government could effectively block ASML from servicing the DUV machines it has so far sold to China.

“China is a very important market for China,” Chris Miller, assistant professor of international history at the Fletcher School of Law and Diplomacy at Tufts University and author of the book “Chip War,” told CNBC by email. “Most of this revenue comes from older generation chip manufacturing tools.”

Ironically, restrictions on the export of DUV machines to China “probably helped ASML on the Internet because it accelerated China’s purchase of older generation DUV tools,” Miller added.

Now ASML expects sales to China to decline due to US trade restrictions. The company expects China to again account for a smaller share of its total global sales in 2025, CFO Dassen said in a transcript of a video interview on Tuesday.

“We are seeing a trend in China toward historically normal percentages in our business,” Dassen said. “We therefore expect China to account for around 20% of our total sales next year. That would also correspond to its share in our order backlog.”

Analysts at Bank of America said the company faces a “sharp decline in China revenue.” They added that ASML’s forecast that China will account for about 20% of its sales in 2025 implies a 48% year-on-year decline in sales – more severe than the 3% expected.

Abishur Prakash, founder of Toronto-based consultancy The Geopolitical Business, said Chinese demand for ASML machines is likely to decline significantly because the company is “severely constrained by export controls.”

“Like Intel, for which China is the largest market, ASML is heavily dependent on China,” Prakash told CNBC via email. “ASML views developments with China as a possible constraint on business.”

“With the chip world cut off from China, ASML could see a decline in demand for its devices – from China and elsewhere,” Prakash added.