ASML conference call sets the tone: Memory customers have sold out this year's capacity, long-term contracts provide a safety net, and non-EUV growth has confirmed a "cyclical turning point."

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Main Takeaways from the ASML Conference Call:

Full-Year Guidance Raised, Export Controls Included. The company has raised its full-year net sales outlook to 36-40 billion euros. Management clearly stated that this guidance range already factors in the potential impact of export control uncertainties.

Memory Customers’ 2026 Capacity Sold Out. Customers have communicated that capacity through 2026 is fully booked; tight supply will persist beyond 2026. This massive demand is underpinned by long-term commitments from downstream customers.

Non-EUV Demand Reversal. Previously, non-EUV business was expected to be flat YoY, but is now revised to growth. After a major downturn in immersion DUV demand in 2025, demand has rebounded; sales this year are expected to be close to last year’s level.

On the technology front, High NA reduces mask and process steps. Customer reports indicate that High NA can reduce the number of EUV masks from 3 to 1, compress process steps from 100 to 10, and cover 3 to 4 future technology nodes. The 1,000-watt light source ensures Low NA can be extended to 2031.

Clear Capacity Targets. At least 60 Low NA EUV machines to be shipped in 2026, at least 80 in 2027.

On April 15, ASML held its earnings call. Q1 Results Beat Across The Board: Net sales of 8.77 billion euros, net profit of 2.76 billion euros, and gross margin of 53%—all above market expectations. The company also raised its full-year net sales guidance to 36-40 billion euros.

However, Q2 guidance became a short-term drag on the stock price—guidance midpoint is about 8.7 billion euros, below the market expectation of 9.07 billion euros; gross margin is also sequentially lower. This short-term weakness led shares to briefly fall over 2% after hours.

The market is really concerned about three long-term issues: Is the non-EUV business improvement just a short-term rebound or a cyclical inflection point? Can early memory capacity expansion be sustained? How much flexibility remains after tighter export restrictions? Management provided clear answers to each on the call.

On Non-EUV Business: Previously expected to be flat YoY, now revised to growth. The core driver—immersion DUV demand—has “already reversed” after a steep drop in 2025; sales this year are expected to match last year. Management sounded upbeat, hinting at a fundamental turning point rather than a short-term rebound.

On Memory Expansion: The CEO confirmed that customer 2026 capacity is “already sold out”, supply tightness will continue beyond 2026. More importantly, the huge demand is backed by long-term commitments from downstream customers—this is not speculative inventory build, but an advance in expansion underwritten by real demand.

On Export Controls: The company said the 36-40 billion euro full-year guidance range already factors in the potential impact of export control uncertainty, and it is confident in its buffer capability.

Additionally, capacity targets and technological breakthroughs further reinforce confidence: At least 60 Low NA EUV machines shipped in 2026, at least 80 in 2027. Technologically, the 1,000W light source ensures Low NA viability through 2031; High NA can reduce masks from 3 to 1, cut process steps from 100 to 10, and cover 3-4 future nodes.

Non-EUV Business Improvement: From “Flat” to “Growth”, Cyclical Inflection Point Established

ASML significantly raised its full-year forecast for non-EUV business in this report. Earlier, the company expected this segment’s revenue to be roughly flat versus 2025, but this quarter management said demand has materially reversed. CFO Roger Dassen explained: “We now see demand in this business is actually increasing. So we expect non-EUV business revenue to grow.”

The main driver of this change is the recovery in immersion DUV demand. Roger Dassen noted that immersion DUV demand took a big dive in 2025, leading to a slow start this year, but has since reversed. “Despite the slow start, for this year, in terms of units, we still expect immersion DUV sales to be very close to last year.” Dry DUV and applications business also performed well.

Qualitatively, this improvement is not a short-term order catch-up, but a structural inflection point. Persistent capacity tightness, AI infrastructure investment boosting mature nodes, and long-term capacity buildout all support the sustainability of non-EUV demand.

Memory Expansion: High Certainty Through 2026, Duration Still to be Tested

Memory chip client demand was an important driver of this quarter’s outperformance. According to CEO Christophe Fouquet, major memory clients’ capacity is already extremely tight. He stated clearly: “Our customers told us their 2026 capacity is already sold out, and supply tightness will persist beyond 2026.” This means that clients have pulled forward capacity expansion plans, creating urgent and definite demand for ASML equipment deliveries.

In terms of demand structure, advanced memory (especially AI-related HBM, etc.) is the main force behind new capacity. Christophe Fouquet further noted that clients are not only increasing capital expenditure, but also “trying to accelerate ramp-up of their 2026 and later capacity.” More importantly, this demand is supported by long-term commitments from their downstream customers, increasing order visibility.

However, sustainability beyond 2027 still needs to be observed. ASML has not disclosed the precise timeline or coverage of long-term customer commitments. Although the medium- and long-term logic of AI infrastructure is robust, inherent cyclicality in memory chips means if end demand slows, expansion pace may be adjusted.

Capacity Plan: At Least 60 Low-NA EUV Shipments in 2026

To meet accelerating customer needs, ASML is actively expanding its own capacity. Roger Dassen said the company’s 2026 target for Low NA EUV system shipments is at least 60; looking to 2027, if customer demand holds, shipments could reach at least 80.

For non-EUV product lines, the company also plans to match business with client demand at every node. Christophe Fouquet added that the company will continue to work closely with customers through new system shipments, upgrades to installed base, and by providing base installed products to help clients expand capacity.

Technology Roadmap: Low NA EUV Extended to 2031, High NA Accelerates Toward Mass Production

On technology, Christophe Fouquet said that at the SPIE lithography conference, ASML showed a 1,000W light source, ensuring Low NA EUV’s long-term scalability—by 2031, the system can handle 330 wafers per hour, a significant improvement over today.

In the short term, ASML has already raised throughput for the NXE:3800E system from 220 wph to 230 wph; the next-generation NXE:3800F specs have been raised from 250 to 260 wph and are expected to boost capacity around 2028.

For High NA EUV, Christophe Fouquet noted that at SPIE, customers began publicly discussing High NA progress. Reports indicate High NA can reduce EUV mask numbers from 3 to 1 and process steps from 100 to 10. On the ecosystem side, resist partners demonstrated High NA stretch to 18nm pitch for logic and 28nm holes for memory, covering 3-4 process nodes. Fouquet said High NA system maturity continues to improve as customers start testing with real products, and daily output continues to rise.

Export Restriction Risk: Current Guidance Already Accounts for Buffers

With rising geopolitical uncertainty, export controls’ impact on ASML is in focus. In this report, management proactively addressed the issue. Roger Dassen stated: “Within our 36-40 billion euro guidance range, we believe we can cope with the potential results of ongoing export control discussions.”

This reflects two key messages: first, ASML is confident in its geographic and product mix, and even if restrictions tighten, can offset negatives by reallocating resources and prioritizing other markets. Roger Dassen has also emphasized the company is “completely aligned with customers, providing what they need”; this flexibility is crucial to managing geopolitical risks. Second, the company does not see export controls as a disruptive risk, and has already made prudent estimates in its guidance.

Of course, how export controls evolve remains highly uncertain. If restrictions exceed current expectations or cover more advanced models, ASML’s real flexibility would need dynamic assessment. But for now, the company clearly signals the situation is “manageable”.

Below is the full earnings video transcript (AI-assisted translation):

Hello everyone, welcome to the ASML Q1 2026 earnings video. Welcome Christophe and Roger.

Roger, could you start by summarizing our Q1 2026 results?

Total net sales this quarter were 8.8 billion euros, in line with guidance. Installed base revenue was 2.5 billion euros, slightly above guidance. Q1 gross margin was 53%, at the high end of our range. As I just mentioned, the installed base business performed above expectations and drove strong margins, so we achieved a higher 53% gross margin. Net profit this quarter was 2.8 billion euros.

Q2 2026 Guidance

Could you also give Q2 2026 guidance?

For Q2, we expect total net sales between 8.4 and 9.0 billion euros, with installed base revenue still 2.5 billion euros. Gross margin is expected to be between 51% and 52%.

Market Dynamics

Christophe, over to you: can you share your outlook and your assessment of the market?

I believe we continue to see solid growth in the semiconductor industry, still mainly driven by investment in AI infrastructure, resulting in strong demand for advanced memory and logic. We expect for the foreseeable future that supply can’t meet demand, especially in end markets from AI to mobile devices and PCs, causing a severe supply constraint. Our customers are being asked to create more capacity. For memory chips, clients have told us their 2026 capacity is sold out and supply tightness will persist after 2026. For advanced logic, we see clients ramping up several nodes and increasing 2nm capacity to meet AI demand.

So, it's fair to say that much of this capacity addition positively impacts our own outlook?

Absolutely. We see both memory and logic clients increasing capex and trying to accelerate 2026-and-beyond ramp. Notably, much of this demand is backed by long-term commitments from their own clients. Most importantly, we see memory (DRAM) and advanced logic customers increasing the adoption of EUV and immersion lithography, meaning higher lithography intensity and higher demand for ASML equipment. We will keep working closely with clients to boost our capacity in 2026 and 2027.

Roger, maybe you can add: what steps are we taking to increase capacity for the market?

I think Christophe is spot-on. We're very clear on aligning entirely with customers and delivering what they need. This includes new system shipments, maximizing performance upgrades, and installed base products. With this mix, we aim to meet client demand. Specifically, this year (2026) we believe we can deliver at least 60 Low NA EUV systems, which is our current target.

We're also looking at DUV for 2026. As I mentioned months ago, immersion DUV had a slow start, as 2025 demand dropped sharply, but this has reversed. I’d say, despite a slow beginning, on unit counts, we still expect immersion DUV sales this year to be close to last year’s. That’s the 2026 picture.

Looking to 2027, we're increasing production rates each quarter. For Low NA EUV, if customer demand sustains, we believe we can achieve at least 80 systems in 2027. For non-EUV, we’re also working to match business with client needs at every node.

Full-Year 2026 Guidance

For 2026 specifically, can you outline our latest full-year business status?

Clearly, 2026 is developing very strongly—a robust growth year. Based on all client trends Christophe mentioned, we’re narrowing and raising our range for the year to 36–40 billion euros.

Breaking down the components: as expected, EUV (including Low NA and High NA) will be strong this year. For non-EUV, earlier we expected flat YoY, but now we see demand is increasing, so revenue should grow. I already mentioned our investments in immersion DUV; dry DUV also doing well. Applications too. So versus a few months ago, we now expect growth in non-EUV. Installed base will also grow strongly, as it is the fastest way customers add capacity to meet Christophe’s demand scenario.

I’d also note, within the 36–40 billion euro guidance range, we are confident in coping with any outcome from current export control discussions.

What about gross margin in 2026?

For gross margin, we maintain our 51–53% expectation.

Technology Updates

Switching topics, Christophe, can you update us on technology and the roadmap?

We continue to execute well on our roadmap. Every year, we use the SPIE (international optics engineering society) meeting to share accomplishments. There are several key news items this year: first, we showcased a 1,000W light source, which is important because it ensures Low NA EUV scalability for years. It means that by 2031, the system will process 330 wafers per hour, a big improvement.

In the short run, EUV progress impacts near-term, too: we've raised NXE:3800E throughput from 220 to 230 wafers/hr. This helps near-term capacity. Our customers are happy with more wafers per tool. For next-gen NXE:3800F, throughput has gone from 250 to 260 wph, helping 2028 capacity.

Also at SPIE, there are some High NA updates — can you share?

At SPIE, our customers began talking about High NA. Reports highlight that High NA allows for dramatically fewer masks—DRAM and logic customers said with High NA, needed EUV masks reduced from 3 to 1. They also noted process steps cut from 100 to 10. This is highly significant, which is why we developed High NA.

There’s also huge ecosystem progress. Some of our resist partners demoed High NA’s extension to 18nm lines and pitches for logic, and 28nm holes for memory. This means High NA is ready for prime time, covering 3–4 nodes, which is very important for customers.

Finally, tool maturity matters. We see improving availability data—yielding more wafers daily, higher overall output. As customers begin testing High NA with real products, this grows more important.

Thank you both for joining the interview today. Thank you. You’re welcome.

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