ASML

LLM Evaluations

Transcript Summary

ASML reported a strong Q1 2026 with EUR 8.8 billion in net sales and a 53% gross margin. Driven by surging AI infrastructure demand, the company raised its full-year 2026 revenue guidance to EUR 36-40 billion. CEO Christophe Fouquet noted that both memory and advanced logic customers are facing supply constraints, leading to increased capital expenditure and lithography intensity. Memory customers are reportedly sold out through 2026. Capacity expansion is a priority; ASML aims for 60+ Low NA EUV shipments in 2026 and 80+ in 2027. The DUV segment is also seeing a recovery in demand, now expected to grow rather than stay flat. Technological milestones include a 1,000-watt source demo and improved throughput for the NXE:3800 series. The High NA EUV platform is maturing, with customers highlighting its ability to drastically reduce mask counts and process steps. High NA is expected to be extendable across multiple future nodes. Management remains confident in achieving a 51-53% gross margin for the year and believes the current guidance is resilient against potential export control changes. The overall outlook is exceptionally bullish, centered on ASML's critical role in the AI-driven semiconductor cycle.

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Full Earnings Call Transcript — Q1 • 2026-04-15

Jim Kavanagh: Hello, and welcome to ASML's Q1 2026 results video. Welcome, Christophe and Roger.
Jim Kavanagh: Roger, if I could start with you and ask you to give us a summary of our Q1 2026 results.
R.J.M. Dassen: For the quarter, total net sales came in at EUR 8.8 billion. That was within guidance. Included in the EUR 8.8 billion was EUR 2.5 billion for Installed Base revenue. That was a little bit above the guidance. If you look at the gross margin for Q1, 53%. That was at the high end of the gross margin that we guided. If you look at the Installed Base business, as I just mentioned, the Installed Base business was higher than we anticipated. But also if you look at the components in the Installed Base business, there were components in there that actually come in at quite some strong gross margins. So as a result of that, a pretty high gross margin at 53%. Net income for the quarter, EUR 2.8 billion.
Jim Kavanagh: Can you also provide us with a guide for Q2 '26 results, please?
R.J.M. Dassen: For Q2, we expect EUR 8.4 billion to EUR 9 billion of total net sales. Included in there, again, EUR 2.5 billion of Installed Base business. We expect the gross margin to be between 51% and 52%.
Jim Kavanagh: Christophe, if I can switch to you. And can I ask you to give us an outlook on the market and how you're seeing things at the moment?
Christophe Fouquet: Well, I think we see that the semiconductor industry growth continued to solidify. This is still very much driven by investment in AI infrastructure. So this translates into a lot of demand for advanced memory, for advanced logic. And we expect, in fact, that the supply will not meet the demand for the foreseeable future. So this is creating a strong constraint in the end market from AI to mobile and PC. And as a result, our customers are strongly invited to create more capacity. So if we look at memory, what our customers tell us is that they are sold out for 2026 and their supply constraint will last beyond 2026. For advanced logic, we see our customer building capacity for several nodes, while they also continue to ramp 2-nanometer in order to address the AI products.
Jim Kavanagh: So then I guess it's fair to say, a lot of those capacity additions are adding positively to our own outlook?
Christophe Fouquet: Well, absolutely, we see our memory and logic customers increasing their capital expenditure and trying to accelerate basically their capacity ramp in 2026 and beyond. What's also very interesting is that a lot of this demand is supported by long-term commitment at their customer. On top of that, we see both memory customers, DRAM customers and advanced logic customers continuing to increase their adoption of EUV but also immersion. So this translates basically into higher litho intensity and a higher litho demand for ASML. So we're going to continue to work very closely with our customers to increase our capacity. We are doing that in 2026. We'll continue to do that in 2027.
Jim Kavanagh: And then maybe Roger, just adding on to that, can you provide a little bit more color or details on what we are actually going to do in terms of adding capacity to support market demand?
R.J.M. Dassen: So I think Christophe said it right. We're very clearly working with our customers, fully aligned with customers to give them what they need, and that is in a combination of capacity in terms of new shipments, making sure that systems, that the performance of systems is upgraded as best as we can and also provide Installed Base products. So in that combination, we try to give customers what they need, specifically when it comes to our own capacity. What we're looking at for this year for 2026, we believe we can drive an output for this year of at least 60 systems for EUV Low NA. That's what we currently have. That's what we're currently driving. And added to that, we're looking at deep UV for 2026. As I mentioned a couple of months ago, when it comes to immersion deep UV, we actually had a bit of a slow start because in the course of last year, we decided to actually -- we were looking at a significantly lower demand for immersion. That has now reversed itself. And I would say in spite of that slow start, we're still for this year expecting to get pretty close to the immersion sales that we had last year in terms of unit numbers. So that's for 2026. When it comes to 2027, in terms of capability, we're increasing our move rate really quarter-on-quarter. And then when you look specifically at EUV Low NA, we expect that we're able to get to an output for 2027. Again, if customer demand really underpins that, we think that we can get to at least 80 Low NA EUV units. And we're also looking at having the non-EUV business being in line with what customers are asking for, for all of their nodes.
Jim Kavanagh: And then specifically on 2026. Can you give us an update then on our own business then for the full year?
R.J.M. Dassen: Yes. So clearly, 2026 is panning out very nicely. It's a very strong year. We're looking at a strong growth year. And based on all the customer dynamics that Christophe was talking about, we are actually narrowing the window and also increasing the window of our expectation to EUR 36 billion to EUR 40 billion for this year. If you look at the different moving parts as we already expected, EUV is strong this year. So EUV in combination of Low NA and High NA, strong year there. On the non-EUV business, previously, we were expecting that to be flat in comparison to last year. Right now, what we're looking at is, in fact, an increase of demand there as well. So increased revenue on the non-EUV business is what we're expecting. I already mentioned what we're doing on immersion, but also the dry business is doing quite nicely and also the application business. So we believe in contrast to where we were a couple of months ago, we're looking at an increase for the non-EUV business. When it comes to the Installed Base business, strong growth there because obviously, it is a very fast way for our customers to increase their capacity to cater to the demand that Christophe was talking about. And I would say that within the guidance that we provided, the EUR 36 billion to EUR 40 billion, we believe we can accommodate potential outcomes of the export control discussions that are currently ongoing.
Jim Kavanagh: And how about the gross margin then for 2026?
R.J.M. Dassen: For the gross margin, we maintain our expectation of 51% to 53%.
Jim Kavanagh: Switching gears a bit to technology. Christophe, can you give us some insights and latest updates on how we're progressing with the technology and our road map?
Christophe Fouquet: Yes, I think we continue to execute very nicely on our technology road map. I think every year, we use the SPIE conference to give a bit of an update to the entire world about what we have achieved. A few, I think, important news this year. The first one was our demonstration of the 1,000-watt source. And this is very important because it means that we can secure the extendibility of Low NA EUV for many, many years. It means, in fact, that in 2031, we'll be able to run this tool at 330 wafers per hour, which is a major step-up from what we have today. Now the progress on EUV also has a good impact on the short term. We have been able to increase the throughput of our NXE:3800E from 220 to 230 wafers per hour, which is also helping on the short term with capacity. Our customers are very happy to be able to get more wafers out on any tool. And we are also increasing the specs of our next system, the NXE:3800F to 260 wafers per hour. It used to be 250 wafers per hour, and this will help us also with capacity around 2028.
Jim Kavanagh: And I think also at SPIE, there were some updates on our High NA platform progress. Can you share a little there?
Christophe Fouquet: Yes. And I think what was good about SPIE is that our customers start to talk about High NA. And they reported a few things. The first thing is, of course, the fact that High NA can allow them to reduce the number of masks significantly. DRAM and logic customers were talking about going from 3 to 1 mask for EUV using High NA. And they also mentioned that this can reduce the number of process steps from 100 to 10, which is, of course, significant. That's, of course, the reason why we have High NA. I think we have seen also great progress on the ecosystem, some good presentation with some of our resist partners, pointing to the fact that High NA can be extended when it comes to logic to 18-nanometer line and space pitch. And when it comes to memory to 28-nanometer hole size. So it means basically that not only High NA is getting ready for prime time, but we already know that High NA can be extended mostly for 3, 4 nodes, which is, of course, very important for our customers. And finally, maturity of the tool is important. We continue to see better availability data, more wafers per day, more wafers out. And this is just, of course, becoming more and more important as we see our customers starting to test High NA on real products.
Jim Kavanagh: So I'd like to thank you both for joining us today. And yes, thanks very much.
R.J.M. Dassen: Pleasure.