ASML Raises 2026 Sales Outlook, but 2027 EUV Expansion Is Nearly Booked

• ASML raised its 2026 net-sales forecast to €43–45 billion, its second increase this year.
• Higher-than-expected service and field-option sales primarily drove sales and margin above ASML's guidance.
• Low-NA EUV and DUV immersion capacity is planned to rise 30% in 2027, but most expanded EUV output is already booked and the 2028 step remains under study.

ASML says chipmakers are committing earlier to equipment needed for advanced logic and memory production. Its new forecast does not show that the lithography constraint around the AI infrastructure build-out has been resolved: the quarter's sales and margin beat came primarily from machines already in the field, while much of the planned new EUV capacity already has customers.

The quarter's beat came from installed equipment

ASML expects 2026 net sales of €43 billion to €45 billion and a gross margin of 54% to 56%, the company said in its results announcement. The sales range is up from an earlier €36 billion to €40 billion forecast. At the midpoint, that is a 16% increase, and it is the company's second forecast raise this year.

Second-quarter sales were €9.326 billion, gross margin was 54.0% and net income was €2.918 billion. Sales and net income exceeded analyst estimates of €8.80 billion and €2.62 billion, respectively, according to the report.

The source of the upside limits what the quarter says about new manufacturing capacity. Installed Base Management revenue—service and field-option sales for equipment already deployed—rose to €2.762 billion from €2.488 billion in the first quarter. ASML said higher-than-expected sales in that business were the primary reason total sales and gross margin beat its guidance. New lithography systems sold rose to 86 from 67 in the first quarter, while used-system sales fell to five from 12.

The third-quarter guidance implies another sharp sequential increase: €11 billion to €12 billion in sales at a gross margin of 55% to 57%. Delivering both ranges is the first near-term test of the stronger outlook.

More capacity will not create much open supply in 2027

ASML is the only producer of extreme-ultraviolet lithography systems, which are required to create the nanometre-scale circuitry in advanced logic and memory chips. That makes its production ceiling consequential for customers including TSMC, Samsung, SK Hynix and Micron, all of which are expanding capacity.

The company plans to add 30% to its 2026 low-NA EUV capacity of about 65 systems in 2027. It plans the same increase from a 2026 base of about 130 DUV immersion systems. A further 30% step for each line in 2028 is being investigated, not committed.

This is a production plan for two established system categories, not a blanket expansion of every advanced tool. ASML also said it was significantly expanding its upgrade portfolio. Its newest High-NA EUV machine is a separate product: Intel has begun deploying it in production for some Panther Lake chips, a milestone for a system that can sell for as much as $400 million.

The 2027 increase may ease a production constraint, but it does not leave much unallocated EUV supply. Chief executive Christophe Fouquet said nearly all expanded EUV capacity through 2027 was already booked. He said ASML was also close to receiving the EUV orders it needs for that year and already had many orders for 2028.

Those commitments are evidence of customer demand, but the explanation for their duration comes from ASML's management. Fouquet said customers were receiving long-term agreements from their own customers, prompting them to commit further ahead. Finance chief Roger Dassen said orders had not arrived this far in advance since the semiconductor supply crunch early in the Covid-19 pandemic, according to the analysis.

ASML has also tied the plan to prospective demand. Dassen said the capacity expansion takes account of Terafab, Elon Musk's Texas chip project for SpaceX and Tesla; the company has described itself as being in discussions with Musk. Neither account specifies a system order or its value.

Scarcity may change pricing, but no new terms are set

The long order horizon gives ASML a possible route to capture more of the value created by scarce equipment. Dassen said ASML had more pricing flexibility because its products and services were delivering greater value to customers, and that the company was discussing compensation for that value.

Those comments signal negotiations, not an announced price increase. ASML has historically resisted using scarcity to raise prices, and its customers include major chipmakers such as TSMC, Samsung, SK Hynix and Micron. The available reporting does not disclose proposed prices, contract terms or how much of a potential increase would flow through to margins.

The demand signal is broader than leading-edge logic. ASML projected that revenue from memory-chip customers would rise 75% this year. Yet the quarter's installed-base contribution also shows that upgrades and service can lift revenue before added new-system capacity becomes available.

Separately, ASML bought about €1.1 billion of shares in the quarter under its 2026–2028 repurchase program. It set an interim dividend of €1.88 per ordinary share, payable August 5. The announcement does not provide a comparable figure for the cost of the planned capacity expansion, so the scale of that manufacturing commitment cannot be measured against those cash returns from the disclosed figures.

China makes the capacity story uneven

Chinese customers are expected to account for about 20% of ASML's 2026 sales, Dassen said. That would be a lower share than in the past several years but a higher absolute amount as company revenue rises.

Export controls bar ASML from selling EUV and its most capable DUV tools in China. It can sell less capable DUV systems there, and Dassen said demand remained strong among Chinese logic-chip producers serving domestic uses including power grids, computers, smartphones and AI.

That distinction matters because the capacity plan covers both low-NA EUV and DUV immersion equipment, while the addressable market for each is shaped differently by policy. Proposed US legislation could further restrict ASML's China sales. Extra production capacity therefore cannot be treated as equally available across products or geographies.

Delivery, pricing and policy are the next tests

The raised forecast establishes a stronger revenue outlook and longer customer commitments. The next evidence must show whether ASML can convert that visibility into €11 billion to €12 billion of third-quarter sales at a 55% to 57% gross margin, then deliver the planned 30% capacity additions in 2027.

Three unresolved decisions will determine whether the announcement marks a durable easing of the constraint or mainly an earlier allocation of scarce output: whether ASML approves the additional 2028 capacity, whether pricing discussions become signed terms, and whether export rules further reduce the systems it can sell in China.

ASML says it will update its longer-term view at a Capital Markets Day on June 10, 2027. Until deliveries, prices and policy catch up with the order book, stronger visibility should not be confused with broadly available lithography supply.