ASML Lifts 2026 Outlook to EUR 44-45 Billion and Signals It Cannot Meet 2028 Demand, While Pushing Through Its First Broad Price Increase
Third-quarter results call, October 14, 2026
ASML reported record third-quarter net sales of EUR 11.7 billion, toward the high end of guidance, and used the call to make two points that matter more than the quarter itself. First, management now believes planned output for 2027 and 2028 will not fully satisfy customer demand, and it is studying a 2028 expansion above the 30% year-on-year growth target it floated last quarter. Second, it has completed price negotiations with customers that will raise prices on its most critical products, with the benefit arriving gradually in 2027 and in full from 2028.
Capacity: management concedes it will be short of demand through 2028
CEO Christophe Fouquet said leading-edge customers now see demand outpacing supply through at least 2028, backed by a growing number of long-term commitments from their own customers. Orders are arriving for 2028, and customers are asking to place orders for 2029 and even 2030. CFO Roger Dassen said that "given the dynamics of this quarter, we now anticipate that our current plant levels of output in '27 and '28 will not fully meet the demand of our customers."
The groundwork is already visible. ASML expects to ship roughly 65 low NA EUV systems in 2026, nearly 50% more than the 44 shipped last year. Immersion DUV output, originally planned well below 2025 levels, should now match them. The company previously signaled 30% capacity growth in 2027 for both low NA EUV and DUV immersion, with a further 30% under study for 2028. Management declined to give new numbers, with Fouquet calling it "far too early," and it did not answer directly when asked whether 140 to 150 EUV units in 2028 are feasible.
Fouquet identified three levers: better use of existing factory footprint, shorter cycle times as the NXE-3800E matures and certain qualification steps are dropped with customer agreement, and continued supplier work. He said the cycle-time lever can be taken "pretty far." Management does not see the key optics supplier as a bottleneck, even for expansion beyond 30% in 2028, though Fouquet acknowledged that "every time you add capacity, of course, we create more challenges there." The core supply chain risk is whether suppliers can sustain 30% annual growth. In response to a question from JPMorgan, Dassen added that some of the ramp cost is spread across suppliers, which in places need "some help" to get there.
ASML is deliberately not accepting 2029 and 2030 orders yet. Dassen said the company wants to compare total customer requests against realistic capacity first, so that it does not commit to customers A, B and C and then tell customer D it is sold out. He described the existing order process as a real commitment, with a down payment "enough to hurt" and cancellation that "comes at a price." Fouquet said ASML can cross-check demand against customers' fab construction and release plans and believes it is "real and not inflated" by order-slot hoarding. Interest in the 2029-2030 period is broad rather than tied to one customer, and ASML is also seeing new low NA EUV customers, particularly in DRAM, and a similar trend for High NA.
Morgan Stanley's Lee Simpson pointed to a roughly $5 billion quarter-on-quarter jump in non-current liabilities, which include down payments. Dassen agreed it is a useful gauge of order intake, though a lagging one, and ASML does not disclose bookings. Free cash flow of EUR 11.4 billion in the quarter reflects those customer prepayments.
Pricing: a first-of-its-kind increase, but not an annual one
Dassen said the price talks that began in the summer are finished and have produced increases on what ASML calls its most critical products, meaning high-volume, leading-edge projects. Upgrade prices will follow tool prices. There is no 2026 impact, a partial effect in 2027 and the full effect from 2028. He declined to say how the increase is structured or whether it touches the existing backlog.
Management was candid that part of the increase offsets ramp costs at ASML and its suppliers, but said "a significant part of it is directly accretive to the gross margin." Dassen was also clear that this is not meant to repeat annually, saying "that wasn't the plan." Fouquet noted ASML had never held such a discussion before, and that customers accepted that "the overall value in the ecosystem is shifting," triggered in part by AI. Dassen framed the goal as protecting the value-based pricing principle so that ASML is never forced into price cuts if the cycle turns.
Financials and guidance
Net system sales were EUR 8.4 billion, including EUR 4.1 billion of EUV with one High NA system, and EUR 4.3 billion of non-EUV. The mix was 54% logic and 46% memory. Installed base sales reached EUR 3.3 billion, almost EUR 0.4 billion above guidance, driven by productivity upgrades in EUV and DUV. Those high-margin upgrades lifted gross margin to 57.5%, above guidance. Net income was EUR 5 billion, including about EUR 0.5 billion from a revaluation of the initial investment in an AI company, and EPS was EUR 12.95. ASML bought back about EUR 4.1 billion of shares in the quarter and ended with EUR 12.7 billion in cash and short-term investments.
For the fourth quarter, ASML guided net sales of EUR 14.2 billion to EUR 15.2 billion, installed base sales of about EUR 3.7 billion and a gross margin of around 57%. The sequential margin dip despite higher volume reflects ramp costs outweighing fixed-cost absorption. Full-year 2026 sales are guided to EUR 44 billion to EUR 45 billion, up about 36%, with a gross margin of around 56%. EUV should grow more than 45%, non-EUV systems about 20% and installed base about 50%. Logic system sales should rise about 10% and memory about 75%, with advanced logic growing over 25%. China remains about 20% of sales.
The upgrade business is the main swing factor for 2027 margins. Dassen said much of the installed base remains unupgraded and new upgrade products are coming, but he acknowledged that its durability is the open question. Offsetting positives for 2027 are volume leverage, richer EUV mix as older models roll off, and pricing. Management will give 2027 margin guidance in January.
Products: faster tools and the High NA inflection
ASML plans to introduce the NXE-3800F in small quantities in early 2027, specified at 260 wafers per hour versus 230 for the NXE-3800E. A next-generation critical immersion tool at 330 wafers per hour is also coming, which Dassen said should support pricing as well as capacity, since "the value scales with the throughput." A new Yieldstar 550B overlay metrology system has shipped, with over 60% higher productivity than its predecessor, and demand is expected to more than double versus 2025.
High NA is progressing from development toward production. Intel has exposed more than 1 million wafers on High NA with results that meet or exceed low NA EUV on comparable layers. Samsung and TSMC plan High NA in high-volume manufacturing in 2028 and 2030, respectively, and fleet availability is approaching 90%. ASML and TSMC have launched an industry initiative for larger-format EUV photomasks, targeting a 12-inch mask pilot line by 2031 and production in 2033. Fouquet read the mask effort as evidence that customers expect broader High NA use. He declined to forecast the shipment ramp, and said capacity pressure could either accelerate adoption or slow it if customers prefer proven low NA tools. ASML shipped only one High NA system this quarter.
Demand mix, clean rooms and China
Memory, primarily DRAM, is closing the gap with logic. Dassen still expects logic to outweigh memory in next year's book. Fouquet said interest for 2029-2030 is roughly equal across both, since AI chips need both, though DRAM makers are currently more aggressive. Those discussions are mostly about EUV and therefore exclude China.
On customer clean-room space, Fouquet described only "tactical" constraints that can push a system across a quarter boundary. ASML checks that space is ready before allocating tools. Dassen cautioned that the scale of 2027-2028 construction demands "very diligent" execution by customers.
China demand is expected to stay strong into 2027 on domestic mainstream logic and memory needs. Asked about a Chinese immersion competitor around 2029, Dassen said ASML's immersion share there is "extremely high" and that the facts on Chinese tool development are no different from five or 25 years ago. He cautioned that restricted market access would raise local motivation.