ASML struggling to keep up with demand for chipmaking equipment as AI spending continues to boom

ASML, a leading Dutch company in chipmaking equipment, is grappling with an overwhelming demand for its devices due to the ongoing boom in artificial intelligence (AI). Despite announcing plans to increase its production capacity by 30% in 2027 and another 30% in 2028, the company is struggling to keep up with the orders it receives. ASML's CEO, Christophe Fouquet, stated that the company will face challenges in meeting the demand, even after raising prices starting in 2027, with the full impact expected in 2028.

The company's earnings report for Q3 2026 revealed a net profit of €4.96 billion on net sales of €11.7 billion, projecting sales for Q4 between €14.2 billion and €15.2 billion. This has led to a boost in its full-year sales projections from €43 billion to €44-45 billion. Consequently, ASML's shares have risen by 2% as of Wednesday, following a remarkable 70% increase so far in the year, making it Europe's most valuable firm by market capitalization.

There were initial concerns that the AI investment boom might be slowing down. However, positive projections from ASML indicate that chipmakers will continue expanding, thus sustaining demand across the AI industry for years to come. Gordon Kerr, European macro strategist at KBRA, noted that while some were worried about the potential decline in AI investment, strong demand for chips and infrastructure spending suggest that the industry will continue to grow well into the foreseeable future.

ASML's customers include major logic chip manufacturers such as Samsung, Intel, and TSMC, all of which are heavily investing in increasing chip production. Additionally, memory chip makers like SK Hynix and Micron have also announced expansion plans that involve ASML equipment. The company's CFO, Roger Dassen, mentioned that they are still assessing the exact size of the Terafab opportunity, which refers to Elon Musk's planned 100 million square feet semiconductor manufacturing facility.

The order book of ASML reflects a surge in spending across the AI industry. As of April 2026, Google, Amazon, Microsoft, and Meta collectively planned to spend $725 billion on capex in 2026, a 77% increase from the previous year's record $410 billion. Since then, these companies have further increased their capex guidance, with Microsoft allocating $25 billion of its record capex budget to higher prices for memory chips and other components.

Analysts such as Gartner predict that global AI spending will rise by 49.5% in 2026 to $2.7 trillion and an additional 36.2% in 2027.