ASML’s expected decline in China sales next year is not due to earlier stockpiling by Chinese customers, Chief Financial Officer Roger Dassen said on Wednesday.

The world’s largest supplier of semiconductor manufacturing equipment said in its third-quarter earnings report that it anticipates a significant drop in demand from China in 2026.

“The reason I rule out stockpiling is because systems that we ship … are actually in a chips factory,” Dassen told reporters, pushing back on speculation that Chinese buyers had hoarded equipment in anticipation of tighter U.S. export restrictions.

China has been the world’s biggest buyer of chipmaking tools since 2020, fueling analyst concerns that some of those purchases may have been precautionary.

In the third quarter, Chinese customers accounted for 42% of ASML’s total machine sales, up from earlier quarters. The Dutch firm noted that demand this year was stronger than expected, despite geopolitical headwinds and regulatory uncertainties.