ASML orders beat expectations as AI arms race boosts demand

[AMSTERDAM] ASML Holding posted stronger-than-expected orders in the third quarter and said sales next year would be at least on par with 2025, as artificial intelligence fuelled demand for its chip-making machines. 

The Dutch semiconductor equipment maker reported 5.4 billion euros (S$8.4 billion) in bookings in the period, it said in a statement on Wednesday (Oct 15). That compares to 4.9 billion euros expected by analysts, according to data compiled by Bloomberg.

Shares rose as much as 3.8 per cent on Wednesday. ASML has rallied 28 per cent this year, making it Europe’s biggest company by market capitalisation. 

ASML, which is the only company that makes extreme ultraviolet lithography machines needed to produce the most sophisticated chips, is benefiting from a boom in AI infrastructure spending. OpenAI, the world’s most valuable startup, has already struck deals for data centres and chips that top US$1 trillion. 

“We have seen continued positive momentum around investments in AI, and have also seen this extending to more customers,” chief executive officer Christophe Fouquet said in the statement. The company’s sales will favour its cutting-edge machines, while business in China will be “significantly lower,” he said in a video accompanying the results. 

Third quarter sales were 7.5 billion euros, compared to 7.7 billion euros forecast by analysts. 

“For 2026 we expect our net sales to not be below 2025,” Fouquet said in the video. In July, he said the company couldn’t confirm growth next year, sending shares sharply lower. 

The guidance is “a bit more enthusiastic” than previous commentary, according to Degroof Petercam analyst Michael Roeg. 

“The outlook is still cautious, which must be because they expect sales to China to decrease significantly in 2026,” Roeg said by email. “That must be compensated by higher sales in 2026 to customers in leading-edge logic and memory.”

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Some of ASML’s biggest clients, including Taiwan Semiconductor Manufacturing and Samsung Electronics, recently reported robust AI chip demand.

The chip toolmaker plans to ride the AI boom in the coming years, and reaffirmed a target to grow annual revenue to as much as 60 billion euros in 2030 from 28.3 billion euros last year. It is developing a project that has the potential to double its workforce based near its Veldhoven, Netherlands headquarters. 

The strategic importance of ASML’s machines has caught the company up in geopolitical fights as trade tensions surge around the globe. It faces restrictions on what it can sell to China, one of its largest markets, stemming from US attempts to rein in Beijing’s chip industry.

Last week, a US House committee said ASML along with other toolmakers were boosting China’s semiconductor industry and supporting its military. The panel called for tighter controls on sales. 

ASML said its China net sales were 42 per cent of its total in the third quarter, up from 27 per cent in the previous three months, making it the company’s biggest market in the period. 

ASML is also bracing for disruptions due to restrictions China imposed on exports of rare earth, which is necessary for its production, Bloomberg News reported last week, citing a person familiar with the company. The company declined to comment.

On Wednesday, ASML said it doesn’t expect to complete a 12 billion euro share buyback programme in full within the 2022–2025 time frame and plans to announce a new buyback programme in January. BLOOMBERG