ASML: Chip Equipment Demand Exceeds Planned Supply for 2027 and 2028
Key Facts
ASML reported on October 14 that net sales reached €11.7 billion in the third quarter of 2026, with net income of €5.0 billion and a gross margin of 57.5%. The company said currently planned supply for 2027 and 2028 would not meet all customer demand. It is considering increasing 2028 production capacity beyond the 30% increase it had previously announced for that year. The company is therefore putting the supply gap at the center of its outlook, while customer comments point to demand extending beyond the near term. The CEO said customers are raising their short- and medium-term demand expectations, driven mainly by their estimates of the scale and duration of AI investment.
Results improved from the previous quarter: sales rose from €9.326 billion in the second quarter to €11.662 billion in the third, while net income climbed from €2.918 billion to €4.960 billion. Sales from installed base management, which includes service revenue and field support options, also increased from €2.762 billion to €3.289 billion. The figures show that service and field support activity also grew during the period, alongside equipment sales. For the fourth quarter, the company set a sales range of €14.2 billion to €15.2 billion, with a gross margin of about 57%. For 2026, it expects sales of €44 billion to €45 billion and a gross margin of about 56%.
ASML said some customers had expressed interest in placing orders for its equipment in 2029 and 2030, extending the sector's planning horizon beyond the supply the company is discussing for the next two years. Interest in future orders does not mean those orders have become confirmed contracts. Reuters reported that the company's customers, including TSMC, Samsung and Intel, are investing to increase chip production, and that the AI boom has fueled demand for its equipment. In July, ASML said AI investment and advances in the technology were driving demand for advanced logic and memory chips, and that customers were accelerating capacity expansion plans. The company also said in July that it planned to increase production capacity for Low-NA EUV and DUV immersion systems by 30% in 2027, and was considering an additional 30% increase in 2028.
The expansion plans the company outlined in July mean the announced increase for 2028 was under consideration before it said in October that planned supply for that year would not cover all demand and that it was considering a capacity increase beyond the level previously communicated. Meanwhile, Reuters reported that the first phase of the company's Eindhoven expansion is not expected to begin operating before 2029. It said the company would also address the supply shortfall by upgrading machines in operation and introducing faster models, adding other ways to increase output alongside new capacity. Reuters also reported that ASML would begin raising prices in 2027, with the full effect to be seen in 2028. These plans highlight the company's multiple responses to demand, from expanding capacity to improving the productivity of existing equipment and raising prices.
On shareholder returns, ASML repurchased about €4.1 billion of shares in the third quarter under its 2026–2028 buyback program. It also declared an interim dividend for 2026 of €1.88 per ordinary share, payable on November 4, 2026. In trading, Reuters reported that the stock rose 1.2% on October 14 after the results, while the European STOXX 600 index gained 0.43% to 637.75 points that day. Reuters also reported that the stock rose about 2% in the October 14 session and had gained nearly 70% since the start of the year through that date. EL7 data showed ASML shares closed at $1599.96 on October 26, 2026.