ASML says it will generate interest in orders through 2030 thanks to AI demand

ASML said Wednesday that some of its customers are expressing interest in placing orders for its critical semiconductor tools for 2029 and 2030, as the company reported third-quarter profit that beat expectations.

These comments will likely provide comfort to investors who were looking to gauge the long-term demand outlook for ASML’s lithography machines.

“Our customers continue to increase their short- and medium-term equipment demand forecasts with us, driven primarily by their views on the size and duration of AI-related investments,” CEO Christophe Fouquet said in a statement.

“Given the visibility of their demand, some customers are expressing interest in placing orders with us for 2029, or even 2030.”

ASML is the only company in the world to produce extreme ultraviolet lithography machines, a key tool used notably by TSMC to manufacture the most advanced semiconductors in the world.

Investors are closely watching the Dutch company’s earnings for signs of demand for AI-related chips.

Fouquet said the current supply planned for 2027 and 2028 will not fully meet the demand of its customers. The company is “exploring ways” to increase its capacity by 2028 beyond the 30% increase it had previously planned.

During the quarter, Samsung and TSMC, the world’s two largest chipmakers, committed to using ASML’s High NA extreme ultraviolet (EUV) lithography machines. High NA EUV is ASML’s next-generation tool, which analysts see as key to the Dutch company’s future growth.

In July, ASML raised its sales and gross margin guidance for the year as it continues to see strong demand for its tools. The company’s shares are up 56% this year.

On Wednesday, ASML cut its full-year revenue forecast and said it now expects net revenue of between €44 billion and €45 billion ($49.3 billion to $50.4 billion). The previous lower range of the forecast was 43 billion euros.

ASML also said it expects fourth-quarter net sales of between €14.2 billion and €15.2 billion. The upper limit of the range is above the LSEG consensus estimate of €14.2 billion.

For the third quarter, here are ASML’s results compared to LSEG consensus estimates:

• Net turnover: 11.66 billion euros versus 11.72 billion euros expected
• Net profit: 4.96 billion euros versus 4.1 billion euros expected

The semiconductor equipment maker said it expects sales in China to account for 20% of its total business, in line with its earlier forecast.

While ASML has an effective monopoly on EUV machines, a July report from The Information suggests that an unnamed Chinese company has begun manufacturing a deep ultraviolet (DUV) immersion lithography machine, citing people familiar with the matter.

ASML dominates the manufacturing of DUV machines, which are less advanced than EUV. China has been ramping up its domestic semiconductor supply chain, with some investors concerned it could challenge European and American dominance. However, analysts have raised questions about China’s ability to develop its own DUV technology.

ASML, for its part, has faced challenges in China in recent years. The company is prohibited from selling EUV tools and certain DUV tools to China.