ASML posts record €11.7 billion in sales but warns it can’t keep up with AI demand

ASML said its current production plans will fall short of customer demand for semiconductor equipment in 2027 and 2028. The warning matters because chipmakers need ASML machines to expand production for AI-related chips, and they order these systems well ahead of time.

The company had already announced a 30% capacity increase in 2027 for low-NA EUV and DUV immersion machines. It was also considering another 30% increase in 2028. Chief executive Christophe Fouquet said ASML is investigating ways to increase 2028 capacity beyond that earlier plan.

The shortfall reflects customers’ rising expectations for the size and duration of AI investment. Some customers want to reserve machines for 2029 or 2030. ASML therefore faces pressure to expand output, while investors will watch whether strong AI-related demand continues beyond 2028.

ASML reported record third-quarter sales of €11.66 billion, or around €11.7 billion. The figure was near the top of its €11 billion to €12 billion forecast and broadly matched analysts’ average estimate. It shows how strongly demand for semiconductor equipment has grown.

Sales rose 55% from a year earlier. Net income more than doubled to €5 billion, helped partly by a €510 million gain on stakes ASML holds in other companies. Gross margin reached 57.5%, beating the company’s forecast.

Services contributed significantly to the margin. ASML recorded €3.3 billion in sales from servicing and upgrading customers’ existing machines. The company also raised the lower end of its 2026 sales forecast, now expecting €44 billion to €45 billion, with a gross margin of around 56%.

An EUV machine is semiconductor equipment that uses extreme ultraviolet light to transfer circuit patterns onto silicon wafers. This process, called lithography, helps define the tiny features that become parts of a chip. The article identifies EUV systems as tools for the most advanced chips.

In chipmaking, a wafer is coated with a light-sensitive material called photoresist. EUV light passes through a patterned mask and projects the design onto that coating. After development, the exposed pattern guides later etching and material-deposition steps. These repeated patterns form the chip’s circuitry.

EUV matters because advanced designs require extremely small, precisely controlled features. ASML is the only company that makes EUV systems, giving its equipment a central role in leading-edge chip production. The company’s planned capacity increases therefore matter to chipmakers expanding for AI demand.

Chipmakers order ASML equipment years in advance because the machines are complex, limited in supply, and needed to expand semiconductor production. The long lead time means early orders help manufacturers plan future factories and chip output. It also gives ASML visibility into expected demand.

The article says customers are increasing their forecasts based largely on how large and long-lasting they expect AI investment to be. Some are asking to book machines for 2029 or 2030. ASML’s current plans are already expected to fall short of demand in 2027 and 2028.

These orders reveal that customers anticipate strong AI-related chip demand well beyond the immediate term. They do not prove that spending will remain high indefinitely. Investors are already considering whether there could be a downturn from 2029 and what that would mean for ASML.

ASML machines are essential equipment for producing advanced semiconductors, especially EUV systems used for the most advanced chips. If supply falls below demand, chipmakers could face delays expanding factories or increasing wafer production. The article directly reports the equipment shortfall, while these production effects are a general consequence of constrained manufacturing capacity.

For example, a customer planning more AI chips might have factory space and orders ready but still need ASML tools to pattern wafers. Without enough equipment, the customer could postpone some production or stretch its expansion timetable. That would limit how quickly new chips become available.

Less chip supply could make it harder for AI companies to add computing capacity quickly. AI services might then grow more slowly, face higher costs, or experience delays in new deployments. The article does not quantify these effects, so their size remains uncertain.

ASML’s stated alternative is to find ways to increase equipment capacity in 2028 beyond the 30% rise previously communicated. This matters because customers’ forecasts are still climbing, and current production plans are expected to fall short of demand in 2027 and 2028.

The company had already planned a 30% capacity expansion in 2027 for low-NA EUV and DUV immersion machines. It was also looking at a further 30% increase in 2028. Chief executive Christophe Fouquet said ASML is investigating how to go beyond that 2028 plan, but he did not describe a specific technical or operational solution.

ASML therefore appears to be assessing additional production capacity rather than announcing a completed expansion. Customers are asking for more tools every day, including machines for 2029 and 2030. The next details would need to come from ASML’s capacity plans or investor discussions.

Semiconductor lithography turns a digital circuit design into physical features on a silicon wafer. The wafer receives a light-sensitive coating called photoresist. A lithography machine shines light through a patterned mask, exposing selected areas. Chemical development then reveals the pattern, which guides etching or other processing steps.

This sequence is repeated many times to build layers of circuitry. Smaller light wavelengths and highly controlled optics can help print smaller features, while precise alignment keeps each layer connected correctly. These mechanisms explain why advanced chips require increasingly specialized machines. The article itself does not explain the process, so this description uses established semiconductor knowledge.

ASML’s EUV systems are important because the company says they are used for the most advanced chips. Its DUV immersion machines also form part of planned capacity expansion. Rising AI demand is pushing customers to seek more of these tools, while ASML warns current plans may not be enough.