ASML Lifts Guidance as AI-Fueled Demand for Advanced Lithography Accelerates
Strong memory and logic demand, capacity expansion, and a High-NA milestone drive a beat-and-raise quarter
ASML.AS · Earnings Call · 2026-07-15
What Just Happened
ASML reported a beat-and-raise quarter. Q2 net sales of €9.3B came in above the high end of guidance, driven by stronger-than-expected Installed Base Management sales. Management raised full-year guidance to €43–45B, implying roughly 35% growth, and now expects memory-related net system sales to grow over 75% and advanced logic foundry net system sales over 25%. The company is shipping around 65 Low-NA EUV systems this year, with EUV net system sales up over 45%. “In the second quarter of 2026, total net sales were EUR 9.3 billion, which is above the high end of our guidance as a result of higher-than-expected Installed Base Management sales.” — Roger Dassen, Chief Financial Officer (CFO) · 2026-07-15 The upside is broad-based: DUV immersion shipments are tracking ~130 units, and non-EUV net system sales should grow ~25%.The Capacity Cycle
The core of the story is capacity. Customers are aggressively adding leading-edge capacity, and ASML is responding with its own capacity expansions. For 2027, the company plans a 30% increase in Low-NA EUV capacity and is investigating a similar increase for 2028, now expecting to ship ~85 and ~110 tools respectively. This is not just a unit story; single expose adoption and the shift to more productive tools like the 3800E are raising effective wafer capacity more than 45% year-over-year. CFO Roger Dassen emphasized the mix effect: “the tool mix that we're going to ship next year is a different tool mix from the tool mix that we shipped this year. When it comes to EUV in particular, the tool mix that we're going to ship next year will be Es and Fs.” — Roger Dassen, Chief Financial Officer (CFO) · 2026-07-15 The upgrade business is another key lever, as customers look to squeeze more capacity out of existing fabs. Christophe Fouquet noted, “The key element today is that customer wants to get more capacity on their existing fab as quickly as possible. This creates real strong condition for system upgrade.” — Christophe Fouquet, Chief Executive Officer (CEO) · 2026-07-15Pricing Power and Margin Profile
The demand environment is also giving ASML more pricing flexibility. Management reiterated its value-based pricing approach and suggested that the current scarcity of advanced lithography capacity is creating an opportunity to capture more value. “I would agree with you that the current environment provides more flexibility for pricing than what you would have had in different days.” — Roger Dassen, Chief Financial Officer (CFO) · 2026-07-15 That, plus a richer mix of EUV tools and strong installed base revenue, is driving gross margin up—Q3 guidance is 55–57%. Low NA EUV remains the workhorse, but the mix shift to E and F tools next year should be margin-accretive.High-NA: A Milestone
The most notable technology event was Intel Foundry's announcement that it is using ASML High NA EUV technology on the Intel 18A node to produce a subset of its Core Ultra Series 3 processors. This is a major validation that High-NA is moving from R&D to production. Christophe commented,While High-NA is still early, the progress on maturity is exactly what customers have been looking for. This builds on the narrative from prior quarters where management emphasized the three phases of High-NA adoption. As Christophe said in the Q4 call: “if we look at 2026, we expect ship quite a few more EUV tool.” — Christophe Fouquet, Executive (likely CEO or senior executive) · 2026-01-28 That is now being delivered. He had earlier noted, “we have seen that happening strongly with EUV in the past. And as High NA mature, as the customer validates the value you have described, I think we will see the exact same dynamic.” — Christophe D. Fouquet, Chief Executive Officer · 2025-07-16 The company continues to see both logic and DRAM as candidates for High-NA insertion, though timing remains uncertain.These milestones marks an important step in demonstrating High-NA EUV readiness in a production environment.