ASML looks to add more capacity as chip boom continues

Executives at the semiconductor equipment giant ASML say that they will investigate ways to further boost the firm’s lithography tool production capacity, with demand continuing to outstrip supply at leading chip manufacturers.

The Netherlands-headquartered firm - which currently holds the title of Europe’s most valuable company - has just posted record sales revenues of €11.7 billion for the three months ending September 27, up more than 50 per cent on the €7.5 billion figure for the same period last year.

That record-breaking total will be eclipsed easily in the closing quarter of 2026, with CEO Christophe Fouquet and CFO Roger Dassen expecting to report somewhere between €14.2 billion and €15.2 billion for the quarter and €44 billion-€45 billion for the full year.

Those figures compare with full-year sales of €11.8 billion as recently as 2019, and €28.3 billion in 2024. The main reason behind the sharp upturn is demand for laser-driven extreme ultraviolet (EUV) tools, where ASML has created a monopoly position.

Demand drives profit margins

“With such strong visibility and an order book momentum that continues to increase quarter on quarter this year, we now expect that our supply as currently planned for both 2027 and 2028 will not fully meet the demand of our customers,” commented Fouquet.

“Given this, we are investigating ways to increase capacity for 2028 beyond the 30 per cent increase we previously communicated. In addition, we continue to provide significant wafer capacity to our customers through our productivity upgrade portfolio.”

Such is the level of demand that ASML has been able to increase its profit margins beyond expectations this year, in particular through the tool upgrades needed to boost wafer manufacturing capacity.

As a result, the company posted a pre-tax profit of €5.7 billion in the latest quarter, more than double the figure recorded this time last year, and is handing shareholders an increased dividend of €1.88 per share.

In an in-house interview Dassen said: “The EUV business has grown [more than] 45 per cent this year. We expect the non-EUV business to be around 20 per cent growth in comparison to last year and the installed base business around 50% [up].”

High-NA momentum

Fouquet outlined the market dynamics behind the additional capacity expansion, saying: “Last quarter, we talked about 30 per cent more capacity next year, and also the aspiration to have another 30 per cent increase in 2028.

“But to be honest, it's becoming very clear that 30 per cent in 2027, [and] 30 per cent in 2028 will not allow us to meet our customer demand. So we have to do more and we are looking at ways, especially in 2028 and beyond, to further extend our capacity.”

The increased capacity demand will be met partly through next year’s introduction of a new EUV tool known as the NXE:3800F, which will offer a productivity boost from 230 wafers per hour to 260 wafers per hour.

Fouquet also highlighted recent progress on high-numerical aperture (high-NA) EUV tools, which key customers Samsung and TSMC are expected to introduce in volume wafer production in 2028 and 2030 respectively.

At last month’s SPIE Photomask Technology + Extreme Ultraviolet Lithography conference in Monterey, California, Intel’s foundry business reported that it had now processed more than one million silicon wafers using ASML's high-NA equipment, partly for research and certification purposes but also to pattern select layers for a subset of Intel’s new “Panther Lake” processor chips.

“[It’s] great news on high-NA,” Fouquet said. “This is the set of milestones we've been working on very hard for quite a few years.”

• Following the latest update ASML’s stock price held steady at around $1700 on the Nasdaq, up 60 per cent in the year to date and equivalent to a market capitalization in the region of $660 billion.