ASML reported record quarterly profit Wednesday. Customers already discuss locking in machines for 2029 and 2030. The Dutch monopoly supplier of extreme ultraviolet lithography systems cannot build enough tools fast enough to match artificial intelligence demand.
Net sales hit €11.7 billion in the third quarter. Net profit reached €4.96 billion. Both figures beat expectations. The company raised the low end of its 2026 sales forecast to between €44 billion and €45 billion. Shares rose about 3 percent in early Amsterdam trading.
But the numbers only tell part of the story. Executives described a market where chipmakers scramble for capacity years out. CEO Christophe Fouquet said customers keep increasing short- and medium-term equipment forecasts. The driver remains clear. “Our customers continue to increase their short- and medium-term equipment demand forecasts with us, driven primarily by their views on the size and duration of AI-related investments,” Fouquet stated in the earnings release, as reported by CNBC.
Some clients now express interest in placing orders for delivery in 2029 or even 2030. Discussions once centered on 2027 have shifted further forward. “A lot of our discussions with our customers now are shifting, in fact, beyond 2027. A lot of order intake for 2028. But also some strong interest to already place orders for 2029 and sometimes even 2030,” Fouquet told analysts on the call, quoted by The Next Web.
Capacity plans already outdated
Last July ASML announced plans to lift output 30 percent in 2027 and another 30 percent in 2028. Those targets no longer suffice. Fouquet made the admission explicit. Current supply plans will not fully meet demand in either year. The company now studies ways to expand further, particularly for 2028 and beyond. It has begun construction on a second major campus in the Netherlands’ Brainport region to add manufacturing space, according to Silicon Republic.
This scramble reflects the extraordinary pressure from AI infrastructure buildout. TSMC, Samsung, Intel and others pour billions into new fabs. They need more of ASML’s machines to print ever smaller features on silicon wafers. The tools cost hundreds of millions of dollars each. Lead times stretch long. Yet chipmakers want guarantees now.
And the demand shows no sign of easing. ASML confirmed its long-term 2030 targets weeks earlier. The company sees potential annual revenue between €44 billion and €60 billion with gross margins of 56 to 60 percent. Semiconductor industry sales could exceed $1 trillion by decade’s end. AI servers, data centers and storage drive much of that expansion, per ASML’s November 2024 investor day materials.
Installed base management and upgrades also contribute. These higher-margin services generated strong results this quarter. They help offset any softness elsewhere. Pricing power has improved too. ASML completed price talks with key customers. Increases will flow through partially in 2027 and fully from 2028.
China still represents roughly one-fifth of revenue. Export restrictions limit what ASML can ship there. The company maintains compliance. Yet overall momentum stays firmly positive. Fouquet noted customers ask for more tools every single day.
The situation carries risks. Supply chains for these sophisticated systems prove complex. Even with new factories, adding meaningful output before 2028 or 2029 presents challenges. ASML works on shortening lead times and upgrading existing tools to squeeze more productivity from the installed base. Those efforts delivered upside this quarter. Service and field operations sales exceeded internal forecasts by €400 million.
High-NA EUV systems, the next generation, add another layer. Early adoption progresses. Intel has processed over a million wafers. Samsung targets production use in 2028. TSMC eyes around 2030. These machines cost roughly double the current EUV models but promise greater efficiency for future nodes.
Yet the immediate story centers on today’s Low-NA EUV and supporting tools. Demand for them outruns even aggressive capacity ramps. Fouquet’s predecessor and current team have steadily raised expectations throughout 2026. This marks the third upward revision to full-year guidance.
Investors appear to like what they hear. The stock has climbed nearly 70 percent so far this year despite periodic semiconductor sector volatility. Visibility this far out quiets some fears of an AI investment pause. It suggests the boom possesses real staying power.
Of course, nothing stays linear forever. Geopolitical tensions, potential overcapacity in certain chip segments, or a sharper economic slowdown could alter trajectories. For now the data points one direction. Chipmakers bet heavily on continued AI growth. ASML stands as the indispensable partner. Its order book stretches deep into the decade.
The coming quarters will test execution. Can ASML and its own suppliers expand output fast enough? Will upgrades and pricing offset any delivery delays? The company returns substantial cash to shareholders via dividends and buybacks. That policy remains intact.
One thing looks certain. The lithography bottleneck will shape semiconductor industry growth for years. Customers booking capacity years ahead signals confidence. It also reveals anxiety about missing the next wave of AI advancement. ASML sits at the center of that tension. Its ability to scale will help determine how quickly the industry can deliver faster, more efficient chips.
Fouquet struck a pragmatic tone. The company will investigate every avenue to increase production. It continues to prepare for new fabs worldwide. Those fabs, many driven by AI and strategic considerations, will take its systems. The long-term outlook holds firm. So does the near-term reality of constrained supply.