ASML struggling to keep up with demand for chipmaking equipment as AI spending continues to boom
ASML has said that the unprecedented spending and investment brought about by the artificial intelligence (AI) boom is not slowing down at all, as customers are already lining up to place orders for its advanced chipmaking tools for 2029 and 2030, according to a Reuters report citing ASML's Q3 2026 earnings published today, October 14. ASML CEO Christophe Fouquet said that the company would struggle to meet the demand despite plans announced in July to raise capacity by 30% in 2027 and another 30% in 2028. The company also confirmed on Wednesday that it will raise prices starting in 2027, with the full effect showing in 2028.
Go deeper with TH Premium: Chipmaking
- Analyzing TSMC's fab expansion roadmap - multi-fab N2 ramp, CoWoS, SoIC, and uncorking bottlenecks
- Leading-edge foundry roadmaps for TSMC, Intel, and Samsung
- ASML's roadmap for chipmaking lithography tools examined
- Chinese chipmaking tool roadmaps examined
The Dutch company's comments follow its Q3 2026 earnings report, which detailed a net profit of 4.96 billion on net sales of 11.7 billion. It projects Q4 sales of 14.2 billion to 15.2 billion ($15.9 billion to $17 billion), boosting its full-year sales projections from at least 43 billion to 44-45 billion. ASML's shares rose 2% on Wednesday, up almost 70% so far this year, with its 586 billion market valuation making it Europe's largest firm by market cap.
According to Reuters, there had been concerns that the AI investment boom was losing steam. However, positive projections from the largest manufacturer of the tools for making AI chips and advanced semiconductors signal that chipmakers will keep expanding, sustaining demand across the AI industry well into the foreseeable future. "There were concerns that the AI trade was running out of steam," Gordon Kerr, European macro strategist at KBRA, said. "Demand for chips remains strong, and infrastructure spending is likely to continue well into 2027."
ASML's customers include logic chip manufacturers such as Samsung, Intel, and TSMC, which manufactures chips for Nvidia, all of whom are heavily investing in increasing chip production. Memory chip makers SK Hynix and Micron have also announced expansion plans that involve ASML machines. Meanwhile, the company's CFO Roger Dassen said it is "still kicking the tires on the exact size of that (Terafab) opportunity," referring to Elon Musk's 100 million square feet semiconductor manufacturing facility that aims to output millions of logic and memory chips. Terafab will reportedly receive its first EUV chipmaking tool from ASML in mid-2027.
ASML's order book reflects a wave of spending across the AI industry. As of April this year, Google, Amazon, Microsoft, and Meta reportedly collectively planned to spend $725 billion on capex in 2026, up 77% from last year's record $410 billion. Since then, Alphabet has raised its 2026 capex guidance from $180-190 billion to $195-205 billion, Amazon from $200 billion to $220 billion, and Meta has raised the floor of its range from $125 billion to $130 billion, keeping its $145 billion ceiling. Some of the spending reflects rising chip prices, with Microsoft CFO Amy Hood attributing $25 billion of the company's record capex budget to higher prices for memory chips and other components. Still, analysts such as Gartner expect global AI spending to rise 49.5% in 2026 to $2.7 trillion and another 36.2% in 2027.