ASML outlook beats as AI-driven demand set to exceed supply through 2028

ASML (ASML) reported a mixed third-quarter earnings and forecast fourth-quarter revenue above analyst estimates, saying demand for chipmaking equipment driven by AI investments is set to exceed its planned supply in 2027 and 2028. Stock was slightly up in Wednesday premarket trading.

The Dutch semiconductor equipment maker reported earnings per share of €12.93, beating estimates by €2.14. Revenue rose 55.1% from a year earlier to €11.66B, missing expectations by €70M.

ASML expects fourth-quarter net sales of €14.2B to €15.2B, above the consensus estimate of €14.11B, with a gross margin of about 57%. For 2026, it forecasts net sales of €44B to €45B and a gross margin of about 56%.

The company is exploring ways to expand production capacity beyond its previously planned 30% increases for both 2027 and 2028, CEO Christophe Fouquet said on the earnings call, citing rising customer demand.

“It is becoming very clear that 30% in 2027, 30% in 2028 will not allow us to meet our customer demand,” Fouquet said. Some customers are already discussing orders for 2029 and 2030, he added.

ASML said third-quarter gross margin reached 57.5%, above its guidance, as installed-base management sales rose to €3.3B on demand for productivity upgrades.

The company’s CFO in a conference call said demand from Elon Musk’s planned Terafab chip project is included in its forecasts for 2027 and beyond. The CFO also said the impact of ASML’s price increases would become visible from 2027.

Reports have said ASML plans to raise prices by 10% for replacement parts used in its extreme ultraviolet and deep ultraviolet lithography systems supplied to South Korea, with the increases applying to deliveries from January 2027.