On Wednesday, ASML raised its revenue forecast for the second time this year. The chip equipment manufacturer now expects annual revenue of between 43 and 45 billion euros, driven by sustained demand for production capacity for AI chips. At the same time, the company announced a milestone with its High NA EUV technology at Intel.
Things are moving fast at ASML. Second-quarter revenue came in at 9.3 billion euros, well above the 8.8 billion euros expected by LSEG. Net income of 2.9 billion euros also exceeded the consensus estimate of 2.6 billion euros. The company is now revising its gross margin forecast to 54 to 56 percent.
Whereas ASML had previously projected annual revenue of between 36 and 40 billion euros, the bar is now set significantly higher. CEO Christophe Fouquet describes the order intake in the first half of the year as “extremely strong.” This trend is not new: orders had already been nearly double what was expected due to AI demand.
Capacity expansion
To meet demand, ASML is aiming for a 30 percent increase in capacity for low NA EUV by 2026 and a similar 30 percent increase for DUV immersion. According to Fouquet, the accelerated capacity expansion among customers is translating into purchases across the entire portfolio of the Veldhoven-based chip equipment manufacturer.
One of its largest customers, TSMC, reported a 68 percent increase in revenue in June earlier this week. What’s striking is that TSMC recently opted for existing EUV machines instead of the more expensive High NA variant for its latest nodes. It’s a choice similar to the one Intel once made, with very negative consequences. It may be that the current, mature generation of EUV offers even more advantages over High-NA EUV than DUV did over EUV back when Intel was still hesitant to adopt the new technology.
High-NA EUV milestone at Intel
Beyond the numbers, ASML reports that Intel Foundry is the first in the world to mass-produce logic chips using High NA EUV. This applies to a portion of the Intel Core Ultra Series 3 processors (Panther Lake), built on the Intel 18A process. Specific layers are now dual-qualified in Oregon.
The collaboration has been ongoing for years. In fact, Intel is fulfilling the role that TSMC previously played for ASML as the largest initial customer for the very latest systems. In 2024, Intel and ASML completed the installation of the world’s first commercial High NA EUV system in Hillsboro, Oregon. Intel later also tested the second generation, the TWINSCAN EXE:5200B.
Despite strong demand, semiconductor stocks are under pressure due to doubts about the sustainability of AI investments. ASML is also facing stricter export regulations; in June, the U.S. expressed concerns about a potential EUV leak to China, which ASML firmly denied. An update on long-term goals will follow during Capital Markets Day on June 10 of next year.