ASML anticipates that production capacity in 2027 and 2028 will not meet customer demand. As a result, the chip equipment manufacturer is exploring options to expand capacity further. Investments in AI, in particular, are driving the continued strong demand for lithography systems.
ASML announced the expected bottlenecks during its quarterly earnings presentation. CEO Christophe Fouquet (photo) explained that customers are continually revising their forecasts for required equipment upward. This goes beyond short-term expectations; some customers are already placing orders for 2029 and 2030.
The manufacturer had previously announced plans to increase production capacity by 30 percent by 2028. However, this expansion now appears to be insufficient. ASML is therefore exploring how to further ramp up production capacity. Details about this expansion are not yet known.
Growing demand for machines is driven primarily by investments in AI infrastructure. Chip manufacturers are expanding their production capacity to meet the demand for powerful processors and memory chips. This is hardware that requires ASML’s lithography systems.
Record revenue thanks to strong demand
The rising demand is also reflected in the financial results. ASML posted record revenue of 11.7 billion euros in the third quarter, compared to 9.3 billion euros in the previous quarter. Net income rose from 2.9 billion euros to nearly 5 billion euros, while the gross margin stood at 57.5 percent.
Services provided to existing customers were also expanded. Revenue from Installed Base Management, as ASML refers to this activity, rose to 3.3 billion euros. These upgrades let customers process more wafers without buying new machines. ASML says this helps ease pressure on available production capacity.
For the fourth quarter, ASML forecasts revenue of 14.2 to 15.2 billion euros. This puts total revenue for 2026 in a range of 44 to 45 billion euros, with a gross margin of approximately 56 percent. As a result, ASML’s challenge is shifting from securing orders to delivering enough machines on time.
With the growing order backlog, the manufacturer must further expand production capacity to keep pace with demand forecasts for the coming years.