Strong AI chip demand continues to fuel a surge in orders, leading to a robust quarterly report for semiconductor lithography equipment giant ASML Holding NV. Multiple core metrics surpassed market expectations, prompting the company to raise its full-year outlook.

Net sales for the second quarter reached €9.33 billion, exceeding the analyst consensus estimate of €8.85 billion. Net profit was €2.92 billion, also higher than the expected €2.64 billion. The gross margin came in at 54%, outperforming the forecast of 52%.

Building on this strong performance, ASML has significantly raised its full-year 2026 net sales guidance from a previous range of €36-40 billion to €43-45 billion. The gross margin guidance has also been lifted from 51-53% to 54-56%. For the third quarter, the company anticipates net sales between €11.0 billion and €12.0 billion, with the midpoint well above the Bloomberg analyst consensus of €10.27 billion. The Q3 gross margin is projected to be in the range of 55-57%.

The company stated it plans to increase its capacity for low-NA EUV systems by approximately 30% in 2027, building on a base of around 65 units in 2026, and is exploring the possibility of another 30% increase in 2028. Concurrently, ASML disclosed that Intel has formally begun using its High NA EUV tool for the volume manufacturing of select Ultra 3 (Panther Lake) laptop processors at its Oregon facility.

Quarterly Results and Guidance Surpass Expectations

ASML's second-quarter results exceeded market forecasts across several key financial measures. Net sales of €9.33 billion were about 5.4% higher than estimates, while service and field option sales reached €2.76 billion, surpassing the projected €2.49 billion. The gross margin of 54% was 2 percentage points above expectations, and net profit of €2.92 billion beat estimates by approximately 10.6%.

For the third-quarter outlook, the company's projected net sales of €11.0-12.0 billion are significantly higher than the market consensus of €10.27 billion, with an expected gross margin between 55% and 57%.

Regarding the full-year view, ASML raised the upper end of its net sales guidance from €40 billion to €45 billion and lifted the lower end from €36 billion to €43 billion. The magnitude of this adjustment has drawn widespread attention within the industry. ASML CEO Christophe Fouquet stated in the earnings release, "Based on the current business momentum, we are planning to increase our capacity by 30% in 2027 on top of the ~65 low-NA EUV capacity in 2026, and we are studying the possibility to increase by another 30% in 2028." The company also announced that its next Capital Markets Day will be held on June 10, 2027, where it will update its long-term outlook based on market and technology developments.

AI Infrastructure Investment Wave as Key Driver

ASML had already raised its full-year guidance in the first quarter, with the core driver being customers' continued expansion of AI chip production capacity. ASML's EUV lithography machines are the only equipment in the world capable of performing the lithography processes required to manufacture the most advanced AI chips, constituting its irreplaceable core competitive advantage.

Data released earlier this week by one of ASML's largest customers, Taiwan Semiconductor Manufacturing Company (TSMC), corroborates this demand trend. TSMC's June sales surged 68% year-over-year, benefiting from robust demand for its chips. According to reports, TSMC also plans to add two advanced packaging plants at the Chiayi Science Park in southern Taiwan.

Analysts at UBS noted in a July 10 research report that capacity build-outs at semiconductor wafer fabs, coupled with AI-driven demand for advanced process chips, are expected to support ASML's continued strong performance in the second half of the year.

Intel Adopts High NA EUV, Marking Key Step in Commercialization

ASML and Intel issued a joint statement announcing that Intel is now using the ASML EXE High NA EUV tool at its Oregon facility to manufacture select Ultra 3 (Panther Lake) laptop processors. The tool is being used for specific manufacturing layers of the chips to gather data and optimize performance. Intel is utilizing both standard EUV and High NA EUV tools within its 18A manufacturing process.

The High NA EUV tool costs approximately $400 million per unit, about twice the price of a standard EUV machine, and presents greater technical implementation challenges. Intel received the world's first High NA tool at its Hillsboro R&D campus in 2024 and was the first to install a model closer to a volume production version. The current announcement marks the formal progression of this technology into volume manufacturing applications.

Keyvan Esfarjani, Intel executive vice president and general manager of Manufacturing, Supply Chain and Operations, stated in the joint release, "This milestone demonstrates the close technical collaboration between Intel and ASML and showcases how High NA EUV can be integrated at scale in advanced semiconductor manufacturing."

TSMC has previously stated publicly that the latest generation of ASML's equipment is too costly for high-volume manufacturing and would delay its transition to the technology. Intel's adoption helps alleviate some market concerns about the commercial prospects for High NA EUV and serves as a positive demonstration for ASML's promotion of this product line.

Clear Capacity Expansion Roadmap Extending to 2028

Robust demand is prompting ASML to accelerate its capacity expansion plans. The company stated it intends to increase its capacity for low-NA EUV systems by approximately 30% in 2027, based on a planned capacity of around 65 units in 2026, and is exploring the possibility of another 30% increase in 2028.

This outlined expansion path indicates ASML's optimistic view on the sustainability of semiconductor equipment demand and its preparation of supply capacity for a potentially accelerating technology upgrade cycle in the coming years.