ASML on Tuesday offered the first glimpse into how U.S. restrictions on exports of its advanced chip manufacturing tools to China will impact its sales in the Asian country.

A day after a profit warning that rocked the stock market, executives at ASML Holding said the slower-than-expected recovery in the microchip market will have the sharpest impact on sales to China while having a relatively minor impact on sales of its most advanced systems elsewhere in the world.

ASML predicts a decline in China sales by 2025 due to US chip export curbs, emphasising the growing impact of geopolitical tensions on the semiconductor industry.

ASML’s outlook sparked an overreaction from investors. It’s creating another buying opportunity for AI stocks.

STORY: Semiconductor stocks recovered some ground on Wednesday, after a downbeat forecast from chip equipment maker ASML sparked a global tech selloff.Europe's biggest tech company, which supplies machines that make semiconductor chips,

Chip stocks in Europe and Asia continued to fall Wednesday after Dutch semiconductor-equipment maker ASML Holding warned the recovery for some areas of the industry could extend well into next year, raising fears among investors of a prolonged downturn in demand.