ASML: 3 Key Takeaways for Long-Term Investors
Capacity expansion targets are climbing faster than planned, signaling management's confidence in years of sustained demand ahead.
ASML, a leading semiconductor equipment manufacturer, announced record total net sales of €11.7 billion during its third quarter of 2026 earnings call on October 14, 2026. The surge in sales can be attributed to a rise in investments by chip manufacturers in artificial intelligence infrastructure. ASML's chip-printing tools are crucial for the expansion of global technology as semiconductor manufacturers grapple with prolonged product shortages.
Three aspects of management's statements stand out. Firstly, the semiconductor industry is facing supply deficits across advanced memory and processing microchips, leading customers to extend their purchasing windows to 2030 to ensure equipment deliveries for their long-term factory expansions. This extended visibility has led management to conclude that demand for their product will outstrip supply through at least 2028.
Secondly, to meet this heightened customer demand, management is ramping up production targets for extreme ultraviolet (EUV) systems and deep ultraviolet (DUV) immersion tools beyond their previous growth expectations. In light of this objective, they are now investigating expanding their 2028 capacity even beyond the 30% year-on-year growth target that was under consideration in the previous quarter, for both low-NA EUV and immersion systems.
Lastly, ASML has successfully negotiated price increases for its most critical chipmaking machinery, which are set to commence in 2027 and reach full impact in 2028. These price adjustments will expand revenue and gross margin, which signifies the percentage of revenue remaining after direct output costs, by catering to the needs of high-value customers.
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