ASML lifts annual sales forecast again as AI chip demand fuels orders

ASML raised its full-year outlook again on Wednesday, a sign that the AI chip buildout is still feeding demand for the equipment needed to make the most advanced semiconductors. For everyday investors, the update matters because ASML sits near the start of the AI supply chain: chipmakers need its machines before they can expand production.

The Dutch semiconductor-equipment company said it now expects annual sales of 43 billion euros, about $49 billion, to 45 billion euros. ASML also guided for a gross margin of 54% to 56%, a profitability measure that shows how much revenue remains after the direct cost of making and delivering products.

That is a clear step up from ASML’s prior forecast. The company had previously expected annual net sales of 36 billion euros to 40 billion euros and a gross margin of 51% to 53%.

ASML had already lifted its guidance in the previous quarter, according to CNBC, as demand continued for its most advanced extreme ultraviolet, or EUV, machines. EUV lithography is a chipmaking process that uses light to print tiny circuit patterns onto silicon wafers. ASML’s EUV tools are the only machines in the world capable of the lithography needed to produce the most advanced chips used in artificial intelligence, CNBC reported.

The mechanism is straightforward. AI models require powerful chips. Chipmakers need more factory capacity to produce those chips. Building that capacity requires specialized equipment, and ASML supplies some of the hardest-to-replace tools in the process.

Demand from major chip manufacturers remains a key part of the story. Taiwan Semiconductor Manufacturing Co., one of ASML’s largest customers, reported a 68% increase in June sales earlier this week, which CNBC linked to strong demand for its chips.

TSMC is also preparing to expand advanced chip packaging capacity in southern Taiwan. Reuters reported that the company plans to add two advanced chip packaging plants at Chiayi Science Park, citing comments made Sunday by Wu Cheng-wen, Taiwan’s National Science and Technology Council minister.

Packaging is the stage where chips are assembled and connected so they can work inside larger systems. It has become more central for AI hardware because advanced processors often need fast connections between multiple components.

Analysts at UBS said in a July 10 note that semiconductor fabrication facility construction, along with AI-led demand for leading-edge chip output, should support a stronger second half of the year for ASML. A fabrication facility, often called a fab, is the factory where semiconductors are manufactured.

The outlook is stronger, but the market backdrop remains complicated. CNBC reported that semiconductor stocks have been under pressure as investors question whether the heavy capital spending tied to AI can last. ASML also faces tighter export controls on advanced chip equipment, a policy risk for a company whose machines are central to high-end semiconductor manufacturing.

ASML’s updated forecast gives investors another data point showing that the AI infrastructure cycle is still translating into real orders for parts of the chip supply chain. It also keeps attention on whether chipmakers can sustain the pace of spending that has supported suppliers like ASML this year.

This story draws on original reporting from CNBC.