ASML reports record $13 billion quarter, vows to expand capacity as demand for lithography equipment soars

ASML makes lithography systems for semiconductor factories. These machines help manufacturers create the tiny patterns used in chips. The company sells several kinds, including EUV, DUV, and i-line systems. Its equipment is central to producing advanced logic and memory chips.

Lithography begins with a chip design. A pattern is placed onto a mask, and the machine projects light through it onto a light-sensitive coating on a wafer. The exposed pattern is developed, etched, and repeated many times. Each cycle builds another circuit layer. Different tools support different manufacturing needs.

The importance is clear from ASML’s results. It sold 121 lithography systems in the third quarter of 2026. Demand is rising as customers expand logic and memory production, while investments in AI infrastructure increase. ASML expects demand for its lithography systems to exceed available capacity through at least 2028.

ASML reported record third-quarter 2026 revenue of $13.06 billion, or €11.66 billion. Revenue rose 55% year over year and 25% sequentially. Its gross margin reached 57.5%, while operating income reached $5.79 billion. Net income was $5.56 billion, although about $570 million came from revaluing its Orion AI investment.

The company sold 121 lithography systems during the quarter. That total included 113 new machines and eight refurbished ones, compared with 91 systems in the second quarter. ASML generated $4.59 billion from 17 EUV systems and $4.82 billion from 85 DUV and 19 i-line tools.

The results show both strong demand and high profitability. Installed Base Management added $3.68 billion, about $450 million above guidance. ASML expects fourth-quarter revenue between $15.9 billion and $17.0 billion, with full-year revenue reaching $49.3 billion to $50.4 billion.

Chipmakers are booking ASML equipment years early because they expect demand for their own products to exceed available supply. ASML CEO Christophe Fouquet said leading-edge customers have strong visibility from long-term commitments with their customers. That confidence is encouraging faster fab construction and expansion plans.

ASML is already receiving orders scheduled for 2028. Some customers are expressing interest in equipment for 2029 and even 2030. The reason is straightforward: customers need lithography systems before factories can produce more chips. Securing machines early reduces the risk that new capacity will be delayed.

The pressure reflects AI infrastructure investment and broader demand for chips. ASML expects its lithography demand to exceed production capacity in 2027 and 2028. Customers are therefore planning beyond 2028, while ASML considers whether it must expand capacity further than previously announced.

ASML is increasing production to serve chipmakers building more logic and memory capacity. Demand for its lithography systems is expected to exceed available supply in 2027 and 2028. AI infrastructure investment is adding to the pressure. Customers are also accelerating fab construction because they expect their own products to remain in strong demand.

ASML plans to make about 65 Low-NA EUV systems in 2026, up from 44 shipped in 2025. It previously announced a possible 30% capacity increase for Low-NA EUV and immersion DUV systems in 2027, followed by another potential 30% increase in 2028. DUV production is expected to remain around last year’s level in 2026.

Those increases may still be insufficient because customers are already asking about 2028, 2029, and 2030 deliveries. ASML’s plans were based on earlier expectations, while demand visibility has continued to improve. The company is now considering additional expansion beyond its announced targets.

Taiwan and South Korea account for most of ASML’s equipment sales because their manufacturers are making major investments in advanced logic and memory capacity. These factories require large numbers of sophisticated lithography systems. The article links their spending directly to expansions that exceed those in the United States and Japan.

Taiwan represented 32% of ASML’s equipment sales in the third quarter of 2026. South Korea contributed 31%. Together, the two markets produced 63% of equipment revenue. China accounted for 23%, the United States for 13%, and the rest of Asia for 1%.

The split also reflects the balance between chip types. Overall equipment revenue came 54% from logic chipmakers and 46% from memory manufacturers. Taiwan and South Korea are therefore key locations for the capacity build-out driving ASML’s record results and its need to expand production.

EUV and DUV are lithography technologies that use different light systems to project patterns onto wafers. EUV uses much shorter-wavelength light, allowing extremely small features for leading-edge chips. DUV uses older, longer-wavelength technology and remains important for many chip layers and products. High-NA EUV is an advanced EUV approach designed to capture finer detail.

Chipmakers do not use one tool for every layer. They select systems according to the pattern size, chip design, and production requirements. ASML reported revenue from 17 EUV systems and from 85 DUV systems plus 19 i-line tools in the quarter. It also recognized revenue from one High-NA EUV system in the second quarter.

The technologies work together across chip production. EUV supports the most demanding layers, while DUV remains valuable at large scale. ASML expects EUV revenue to grow more than 45% year over year in 2026, showing the strength of demand for advanced manufacturing.

Lithography turns a digital chip design into physical circuit patterns. A machine projects light through a patterned mask onto a light-sensitive coating on a wafer. The exposed areas are developed and etched, and the process is repeated for many layers. Together, those layers form the working structures of a semiconductor.

The key mechanism is precision. Each lithography step places tiny features in carefully controlled positions, while different tools handle different pattern sizes. EUV is used for the most advanced patterns, and DUV supports other layers and production needs. ASML’s systems therefore help manufacturers build both logic and memory chips.

Advanced chips are important to AI infrastructure because AI investment requires more semiconductor capacity. The article connects rising AI infrastructure spending with accelerating demand for advanced manufacturing equipment. That demand is already pushing ASML toward record sales and prompting customers to seek equipment deliveries as far ahead as 2030.