ASML, the Dutch supplier whose lithography machines sit at the base of the global chip industry, delivered its strongest quarter on record on Wednesday while conceding that even an aggressive expansion of production will not satisfy customers riding the artificial intelligence boom.
Third-quarter sales reached €11.66bn, a 55% jump from a year earlier and near the top of the company's own €11–12bn guidance. Net income more than doubled to €5bn, flattered by a €510m gain on stakes ASML holds in other firms. Gross margin came in at 57.5%, above forecast, helped by €3.3bn in revenue from servicing and upgrading machines already installed at customer sites.
The Veldhoven-based group lifted the lower end of its 2026 sales outlook to €44–45bn, from €43–45bn, and guided to fourth-quarter revenue of €14.2–15.2bn with a gross margin of around 56%.
Capacity cannot keep pace
The headline numbers were accompanied by an unusually blunt admission. ASML said its current plans will not fully cover customer demand in 2027 and 2028, as chipmakers keep raising their own forecasts on the assumption that AI investment will be both large and long-lasting. Some clients are already seeking to reserve machines for 2029 or 2030.
In July the company said it would expand capacity by 30% in 2027 for both its low-NA extreme ultraviolet (EUV) and deep ultraviolet (DUV) immersion systems, and was weighing a further 30% increase in 2028. ASML is the only manufacturer of EUV machines, which are required for the most advanced chips.
"We are investigating ways to increase capacity for 2028 beyond the 30% increase we previously communicated," chief executive Christophe Fouquet said in a statement.
"Customers are asking us every single day to get more tools," Fouquet added in a video interview released alongside the results.
A bellwether under scrutiny
Because chipmakers order ASML's systems well in advance, its order book and guidance are treated as a leading indicator of whether AI spending plans are holding up. That makes this quarter a test of sentiment as much as of execution.
The results landed after a volatile week for AI-linked equities. Chip stocks fell last Thursday following a Financial Times report suggesting that OpenAI's annualised revenue was running roughly $20bn below figures circulated late last month, a gap largely attributable to how the numbers were counted. On Tuesday, Asian semiconductor shares slid after Hock Tan, chief executive of the US chipmaker Broadcom, said many AI investors did not understand what they were buying. Reports of progress by the Chinese memory maker CXMT towards denser chips added to concerns about future competition and pricing pressure.
ASML's Amsterdam-listed shares were up more than 3% by mid-morning on Wednesday.
Analysts were measured. "ASML delivered a strong set of numbers, but realistically, they have only caught up to where the market already was with its expectations," said Ben Barringer, head of technology research at the UK wealth manager Quilter Cheviot.
Barringer added that while growth should remain durable through 2027 and 2028, attention will shift to what comes after: "The market will begin asking the question of whether or not there will be any sign of a downturn from 2029 and what impact that has for ASML."
The company's warning also carries weight beyond the semiconductor supply chain. ASML is one of Europe's most valuable technology firms and a rare continental champion in a sector dominated by US and Asian players, making its capacity constraints a matter for EU industrial policy as much as for its shareholders. The wider macroeconomic picture remains mixed, with the IMF's upgraded 2026 outlook flagging persistent divides over energy and AI investment.
For now, the demand signal from ASML's customers is unambiguous. The question is whether the company can build fast enough to capture it — and whether the AI spending cycle that underpins it will still be running when the machines are finally delivered.
