The Dutch lithography giant has laid out an unusually detailed roadmap stretching three years into the future, and the market is still deciding whether to believe it.
ASML shares traded at €1,583.00 on Thursday, up 0.41 percent on the day and 3.69 percent over the past week. That modest advance masks a deeper tension. The stock sits nearly 10 percent below its all-time high of €1,748.00, set on June 30, 2026 — a retreat that coincides directly with Washington’s renewed scrutiny of chip-technology exports to China.
The company’s revised 2026 guidance is unambiguous: revenue between €43 billion and €45 billion, with a gross margin of 54 to 56 percent. For the third quarter, ASML expects €11.0 billion to €12.0 billion in sales. CEO Christophe Fouquet described the first-half order intake as “extraordinarily strong.” The numbers support that characterization — memory-chip business grew roughly 75 percent, EUV business about 45 percent.
But the real story lies further out. ASML has sketched a capacity expansion plan that extends well beyond the current year. For 2027, the company intends to boost production capacity for low-NA EUV tools by 30 percent from roughly 65 units in 2026. DUV immersion systems are slated for the same proportional increase from about 130 units. For 2028, ASML is evaluating an additional 30 percent capacity step — still non-binding, and that ambiguity is precisely what makes the coming quarters decisive.
The Visibility Gap
Management stated during the earnings call that virtually all required orders for 2027 have already been booked. For 2028, they cited a “large number” of orders. The gap between those two characterizations is where the investment thesis lives.
Since the first quarter of 2026, ASML has stopped publishing quarterly order figures, arguing that large deals arrive too irregularly to be meaningful on a three-month basis. The Q1 report omitted the order number entirely, with management offering only general references to “very strong” intake. This opacity forces investors to take the 2028 order commentary largely on faith. Any softening in tone — even without a concrete number attached — could trigger a reassessment.
The capacity plan itself provides some structure. For 2027, the 30 percent expansion is firm. For 2028, it remains under review. If order momentum holds, the evaluated expansion becomes a fixed plan. If it stalls, ASML could delay or cancel the step entirely.
Two Forces, One Outcome
The bull case rests on a straightforward supply-demand argument: customers are expanding their own capacity faster than ASML can deliver tools. Industry data supports this. SEMI, the semiconductor equipment trade group, projected in April 2026 that global spending on 300-mm front-end equipment would reach $133 billion in 2026, up 18 percent year-over-year. For 2027, SEMI expects fab equipment spending to grow another 14 percent.
In June 2026, SEMI revised its memory forecast upward. Global investment in 300-mm memory equipment is expected to cross the $50 billion threshold for the first time in 2026, reaching $52 billion — a 29 percent increase. For 2027, SEMI projects a further rise to $57 billion.
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UBS analysts see additional tailwinds. The broad build-out of fabrication plants and AI-driven demand for cutting-edge chips should deliver a stronger second half for ASML, they argue. The product mix is also shifting favorably: 2027 will see greater weighting toward E- and F-model tools, which carry better selling prices and higher productivity. The current market environment gives ASML more room for value-based pricing.
The bear case has a name: China. The country accounts for roughly 20 percent of ASML’s total revenue, concentrated in mainstream logic chips. That share is already under pressure — it fell to about 19 percent in the first quarter of 2026.
In Washington, the MATCH Act could restrict exports of ASML’s DUV machines to China — precisely the market segment generating that 20 percent contribution. The Dutch government has signaled diplomatic resistance. Crucially, the legislation has not passed; it remains mired in political debate.
A separate regulatory threat carries a hard deadline. A US rule that would have placed ASML business partners on the Entity List was suspended for one year as part of a trade agreement — until November 10, 2026. Suspended is not repealed. If the “Affiliates Rule” is reactivated or expanded after that date, ASML faces uncertainty not just on new shipments but on servicing already-installed equipment in China. Analysts previously estimated a low single-digit revenue impact and an earnings-per-share hit of up to 10 percent under such a scenario.
The Calendar That Matters
The next fixed milestone is November 10, 2026, when the Affiliates Rule suspension expires. Whether Washington extends, weakens, or enforces that rule will shape sentiment around ASML well before the next quarterly report.
Beyond that, the Capital Markets Day on June 10, 2027, will see ASML update its long-term targets. Between now and then, two variables dominate: the quarterly commentary on 2028 order coverage, and the legislative path of the MATCH Act through the US Congress.
For now, the stock trades 3.91 percent above its 50-day moving average of €1,523.50, with a relative strength index of 52.3 — suggesting the market has fully priced in neither the optimistic nor the pessimistic scenario. The annualized volatility of 55.60 percent leaves room for sharp moves in either direction.
ASML has placed a large bet on 2028. The next few quarters will reveal whether its customers are placing the same bet alongside it.
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