Bookings at Europe’s most valuable technology firm were €3.6 billion ($3.8 billion) in the first quarter, compared with estimates of €4.63 billion. In the fourth quarter, the company had reported a record €9.19 billion of new orders.

ASML’s shares fell as much as 6.4% in Amsterdam on Wednesday.

ASML, the world’s sole producer of equipment needed to make the most advanced chips, saw a slump in demand for its top-end extreme ultraviolet machines, with orders plunging to €656 million in the period from €5.6 billion in the previous quarter. The company is expecting weaker-than-expected sales in the second quarter before demand starts to pick up.

“Our outlook for the full year 2024 is unchanged, with the second half of the year expected to be stronger than the first half, in line with the industry’s continued recovery from the downturn,” Chief Executive Officer Peter Wennink said in a statement Wednesday. “We see 2024 as a transition year.”

ASML sees sales in the current quarter between €5.7 billion and €6.2 billion, missing estimates of €6.5 billion before demand picks up.

“I think it’s pretty clear that the industry is in its upturn,” Chief Financial Officer Roger Dassen said in a statement. “We will see recovery for the industry in 2024 and that we are building up for a stronger year in 2025.”

While the company was hit by weakness in Taiwan and the US — ASML’s biggest market for EUV machines — its China business remained relatively resilient. Sales there were €1.9 billion in the first quarter, down from €2.2 billion in the previous period. Dutch and US export rules meant to stifle Beijing’s chip ambitions have targeted the Veldhoven-based company’s ability to sell cutting-edge equipment to China.

ASML benefited from strong demand from China last year as chipmakers there rushed to get advanced lithography machines ahead of the limits. The new measures, which fully kicked in on Jan. 1, restrict ASML from selling immersion DUV lithography machines, its second-most capable category of machinery, to China.

ASML has never been able to sell its EUV machines to China amid pressure from the US government. The company expects as much as 15% of China sales this year will be affected by the new export control measures.

Meanwhile, some of ASML’s biggest customers have been posting positive results. Earlier this month, Taiwan Semiconductor Manufacturing Co. said its quarterly revenue grew at its fastest pace in more than a year.

Christophe Fouquet, ASML’s chief business officer, will take over as chief executive officer when Wennink retires later this month. He will have to balance geopolitical pressure from the US while attempting to satisfy shareholders accustomed to growth. During a decade under Wennink, shares rose nearly 1,400%.