ASML Sales to China Jump 109% in Third Quarter, Share Reaches 23%
Key Facts
ASML’s sales to China rose 109% in the third quarter of 2026 from the previous three months, lifting China’s share of the company’s system sales to 23% from 14% in the second quarter, according to the South China Morning Post. The shift gave China a larger place in the company’s equipment sales during the quarter, despite political pressure to restrict exports of chipmaking equipment. In the same period, ASML reported total net sales of 11.7 billion euros, a quarterly record, alongside net income of 5.0 billion euros. Gross margin was 57.5%, the company said. The results present a mixed picture: strong sales growth in China alongside record quarterly performance and broader demand for the company’s equipment.
The increase in China’s quarterly share means its weight in ASML’s system sales rose 9 percentage points from the second quarter, while sales to the Chinese market more than doubled quarter on quarter. The figures reflect a shift over a short period, but on their own do not establish the direction of sales in subsequent quarters. The growth came as exports of chipmaking equipment to China faced renewed debate over U.S. restrictions. The Dutch government said it opposed a proposed U.S. bill that could tighten restrictions on exports of this equipment to China, Reuters reported. The available facts did not directly link the third-quarter growth to the Dutch government’s position or explain the motives of Chinese buyers.
Some of the potential regulatory risks center on deep ultraviolet immersion lithography equipment, known as DUV, and its maintenance services. The proposed U.S. bill could, if passed and implemented in cooperation with the Netherlands, lead to a ban on sales of the equipment and maintenance services in China, Reuters reported. Reuters described the potential measure as the first new restrictions on ASML since September 2024. But the bill remains a proposal, and the scope of its impact depends on its passage and coordination with the Dutch government. The third-quarter sales increase remains a recorded result, while the restrictions cited remain a political possibility that has not yet become an effective measure in the available facts.
At the same time, ASML said its customers were raising their expectations for demand for its equipment, driven mainly by their estimates of the scale and duration of AI investment. That demand supports the company beyond shifts in any single market, according to its interpretation of customer expectations. The company said, "AI-related investments are the main driver of their estimates for the scale and duration of demand." This coincided with record quarterly results, as ASML posted total sales of 11.7 billion euros and a gross margin of 57.5%. However, the company’s statement did not specify how much AI-related demand contributed to sales in the quarter or to sales in China.
ASML expects total sales in the fourth quarter of 2026 to range from 14.2 billion to 15.2 billion euros, with a gross margin of about 57%. For the year, the company is targeting total sales of 44 billion to 45 billion euros and a gross margin of about 56%. The guidance places its year-end expectations in the context of the strong demand cited by the company, without breaking down its forecast by geographic destination. On production capacity, ASML said in a forecast published on October 14 that its current supply plans for 2027 and 2028 would not meet all expected customer demand. It added that it was considering increasing capacity for 2028 beyond the 30% increase it had previously announced, making the balance between supply and demand a key issue in the company’s outlook.