ASML wants to build significantly more lithography systems

ASML has announced plans to significantly increase its production of lithography systems over the next two and a half years. The Dutch company aims to manufacture more than double the current output, reinforcing earlier statements that it will not become a bottleneck in the global semiconductor industry. Major chip and memory manufacturers such as TSMC, Samsung, Intel, SK Hynix, Micron, and many others rely heavily on ASML’s technology. ASML is the sole manufacturer worldwide of lithography systems using extreme ultraviolet (EUV) light with a wavelength of 13.5 nanometers. These systems are essential for creating the finest structures within chips. TSMC and Samsung have been utilizing them since their 7-nanometer generation, while Intel has done so since its 4-nanometer process. In contrast, a look at China highlights the impact of lacking EUV systems: Chinese chip foundry SMIC and tech giant Huawei face challenges producing high-yield 7-nanometer chips, which could worsen as finer structures become necessary. Currently, ASML can produce approximately 65 EUV systems per year. By 2027, the company expects to increase this number by 30 percent, reaching around 85 units annually. This refers to the current generation of EUV systems with lower numerical aperture. Each system costs between 170 million and 200 million euros. To achieve this level of production, the company's annual revenue would need to rise by at least three billion euros. As of now, ASML is assessing whether another 30 percent increase might be possible in 2028. In addition, ASML plans to boost production of deep ultraviolet (DUV) lithography systems by 30 percent in the coming year. Based on the current figure of 130 units, this would bring the total to 169. A further 30 percent increase is under consideration for 2028. DUV light operates at a wavelength of 193 nanometers and is used in modern chips for connecting transistors through metal layers. ASML focuses on immersion DUV systems, which employ a liquid medium between the exposure mask and wafer to enhance exposure quality. These machines start at around 60 million euros each. Adding 39 additional units would translate into a minimum additional revenue of 2.3 billion euros. To meet these production targets, ASML must collaborate with German companies such as Zeiss for lenses and mirrors, and Trumpf for lasers. This cooperation complicates scaling efforts. Already, ASML’s financial performance has exceeded expectations. Revenue for the second quarter of 2026 reached nearly 9.3 billion euros, surpassing initial forecasts. Consequently, the company revised its annual revenue outlook upward from 36 to 40 billion euros to a range of 43 to 45 billion euros. In 2025, the company recorded 32.7 billion euros in revenue. ASML reported a net profit of approximately 2.9 billion euros for the second quarter, representing a slight increase of about six percent compared to the previous quarter. Research and development expenses continue to climb, hitting a new record of nearly 1.3 billion euros. The company’s stock price has risen slightly following the announcement of these results, showing a small gain of just over three percent.