Investors cut ASM International 8.6% on a China scare; its Oct. 27 report tests a €1.1 billion quarter

The October selloff priced ASM International on the wrong variable. Investors sold the Dutch chip-equipment maker as if Chinese wafer capacity were its business, but its revenue rises with the number of films a chip fab stacks on each wafer. The stock fell 8.6% on October 15↗ after a hotter-than-expected US inflation reading dragged chip stocks down across Europe ¹.

The fear had a name and a date. On October 16, De Belegger, a Dutch investor newsletter, ran a headline↗ that has not traveled: "CXMT fear hits ASM, which lives off more chip layers" ⁴. On October 19 came confirmation from the fear's own subject: ChangXin Memory Technologies (CXMT), the Hefei-based maker of DRAM, the workhorse memory chip, said quarterly revenue had surged nearly 600% year on year↗ ².

That surge hands CXMT roughly a tenth of the world DRAM market ². Its own shares still fell 7.8% on the result, on margin and yield worries ². The same day ASM closed at €747.60, almost a third below its 52-week high ³.

Fewer wafers can still mean more machines

ASM sells the tools, chiefly atomic layer deposition, that lay films on a wafer one layer at a time. A fab that runs fewer wafers can still need more of these tools, because every 3D chip generation adds layers to each wafer.

The record fits the layer mechanism better than the fear. Revenue dipped with China in late 2025, rebuilt to a record quarter by mid-2026, and guidance points the September quarter higher still↗ ⁵⁸⁹.

A film that deletes process steps

A second way to sell layers went on sale on September 22↗ ⁷. XP8 Vertos Flowable Carbon is the market's first flowable carbon film made by plasma-enhanced chemical vapour deposition, or PECVD, a method for growing films out of a gas ⁷. The material flows into a trench, fills it from the bottom and levels its own surface, so the polishing and etch-back steps that followed a conventional fill can be dropped in some flows ⁷⁶.

In a manufacturing flow that can run to a thousand steps, every step removed is defect risk removed. "Given today's age of AI, output and yield are king," Tyler Sample, who runs ASM's PECVD product unit, told EE Times↗ ⁶. He says the film is already in high-volume production, with all major chipmakers engaged ⁶.

It already fills 3D NAND, the flash memory stacked in vertical layers, at aspect ratios up to 200 to one, a trench 200 times taller than it is wide ⁶. Sample says the development began roughly six or seven years ago ⁶. That work puts ASM inside a PECVD market owned by the incumbents, Applied Materials▼−1.94% — Applied Materials, down 1.94 percent today and Lam Research▼−2.78% — Lam Research, down 2.78 percent today ⁶.

October 27 prices the layer count

The quarterly report on October 27 is the first test of whether the new business shows up in money ³. Guidance stands at €1.1 billion for the September quarter, after a record second quarter ⁵. Management already expects 2027 revenue above the top of the range it set for that year ⁵.

The China risk is real and not new. A year ago ASM told investors to expect Chinese sales down by double digits this year↗, and it guides mature-logic sales below the first half ⁹⁵. The PECVD business cannot be sized from outside: ASM stopped publishing quarterly bookings this year and discloses sales by end market, not by film ⁸.

So the October 27 report turns on two lines: what ASM says about China, and whether flowable carbon or PECVD gets a mention ³. If the China line holds and PECVD appears, the gap back to the €1,092.50 high is the trade ³. If China goes quiet, UBS's target, 77% above the price, is a warning rather than a promise ³.