Demand has motivated ASML’s customers to not only increase their capital spending, “but also accelerate all their plans,” Chief Executive Officer Christophe Fouquet said in a video transcript accompanying the statement. “This really creates a need for more systems basically starting this year.”
ASML is a linchpin in the semiconductor supply chain. It’s the only maker of sophisticated lithography machines that are crucial for manufacturing advanced semiconductors, including Nvidia Corp. chips that are the backbone for training and running AI models in data centres. As technology companies, including Microsoft Corp. and Alphabet Inc. lead the charge, channelling hundreds of billions into securing the infrastructure for advanced AI skills, chipmakers are rushing to add manufacturing capacity.ASML’s shares have surged 69% this year on anticipation that this demand will filter down to the Veldhoven, Netherlands-based company’s gear, and investors are watching for signs that the booming investments in AI and the infrastructure that surrounds it will continue. Taiwan Semiconductor Manufacturing Co., the biggest producer of advanced logic chips and a key ASML customer, reported a 36% increase in quarter sales this week.
“Our order intake remained extremely strong in the first half of the year,” Fouquet said.
Part of Fouquet’s challenge has been to keep up with demand for the intricate machines. The company is targeting a capacity of about 65 units for its second-most advanced tool, known as the low NA EUV, this year, higher than prior projections. It also outlined plans to increase that by 30% for 2027, and said ASML is “investigating” increasing capacity with another 30% the following year.
Trillionaire Elon Musk is touting plans to manufacture cutting-edge chips to serve his robotics, artificial intelligence and space data center ambitions. ASML, which also counts Samsung Electronics Co. and Intel Corp. among customers, said last month it will collaborate on Musk’s so-called Terafab project.ASML on Monday also announced that Intel Corp. has begun to use its most advanced machine for chip production. The new equipment — known as high numerical aperture extreme ultraviolet lithography, or High NA — provides more precise patterning to make advanced chips.
“This is the proof of the maturity of the tool,” Fouquet said in the transcript.
Net sales for the second quarter came in at €9.33 billion, according to the statement. Analysts had anticipated revenue of €8.85 billion in the period, according to the average of estimates compiled by Bloomberg.
South Korea, followed by Taiwan, were ASML’s largest markets in the three months through June. China’s contribution to the company’s net system sales fell to 14% from 19% in the first quarter.
The machines ASML ships to China are eight generations behind the most sophisticated model, a fallout of the US administration’s curbs designed to hinder the progress of the Asian nation’s semiconductor industry.
In recent meetings, US Commerce Secretary Howard Lutnick raised concerns to the company’s senior management that one of ASML’s EUV machines may have made its way into China, in violation of US-led export restrictions, Bloomberg has reported. ASML said it has never shipped an EUV machine , or any component, module or equipment specially designed to be used in an EUV machine, to China.
ASML is also contending with additional risk to its sales to China as US lawmakers have proposed legislation to further crack down on exports of chip-making equipment to the country.
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