Analysis-ASML’s ’sold out’ outlook forces investors to look beyond demand

ASML, the computer chip equipment maker, has recently acknowledged that its supply of chip-printing tools will not meet demand in 2027 and 2028, despite CEO Christophe Fouquet's earlier assurances that the company would avoid becoming the industry's bottleneck. This shift in focus has led investors to question whether ASML can increase capacity fast enough to capitalize on the large demand for AI-driven chips.

Han Dieperink, chief investment officer at Aureus, noted that ASML management openly acknowledges that planned 30% capacity additions in 2027 and 2028 will not suffice, with discussions now extending into 2029 and 2030. ASML is exploring various strategies to address the backlog, including shortening assembly times, upgrading existing machines, and introducing faster models.

The company aims to raise annual capacity to 110 of its $200 million EUV lithography machines by 2028, but is considering adding a dozen more. Despite these efforts, ASML's valuation has declined, as investors question the durability of the AI boom and the sustainability of the spending on AI infrastructure.

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