ASML expects higher revenue due to AI demand

Chip machine maker ASML has raised its revenue forecast for 2026 to 44 to 45 billion euros, an increase from the previous estimate of 43 billion euros. This adjustment is a direct result of increased demand for chip machines, driven by the growth of artificial intelligence (AI). The company from Veldhoven announced this news in its quarterly results, also underscoring its status as the most valuable company in Europe.

Major customers such as TSMC and Samsung Electronics are accelerating their production to meet growing market demand. ASML anticipates that in 2027 and 2028 it will not be able to supply enough machines to meet demand, further increasing pressure on the company. CEO Christophe Fouquet emphasizes that clients are asking daily for more machines, making it essential for ASML to expand its production capacity.

ASML has already planned a capacity expansion of about 30 percent, but management sees this as insufficient to meet future demand. Chief Financial Officer Roger Dassen warns that realizing additional capacity due to constraints with their suppliers remains extremely difficult, despite potential action from ASML. Additionally, due to high demand, better pricing agreements have been made, resulting in the cost of a single chip machine sometimes soaring to 400 million dollars.

The quarterly results show a net revenue of 11.66 billion euros, which is in line with analysts' expectations. 17 EUV systems, ASML's most advanced machines, were sold in the third quarter. Revenue from service and upgrades of existing machines rose by 19 percent, while the gross margin increased to 57.5 percent. Despite export restrictions to China that keep ASML from delivering its most advanced machines to that country, the company sees growing demand from other markets such as South Korea and Taiwan.

Read the full article from AI Insider.