ASML sees room to raise prices as EUV capacity fills through 2027

ASML Holding NV has room to raise prices on some chipmaking equipment as its capacity to produce extreme ultraviolet lithography tools is nearly fully booked through the end of 2027, the company's chief financial officer said.

ASML Holding NV signaled it can raise prices on some chipmaking equipment as its capacity to produce extreme ultraviolet lithography tools is nearly fully booked through 2027, extending the Dutch company's pricing power during an AI-driven semiconductor boom.

"We have room to raise prices for some of our equipment given the demand environment," Chief Financial Officer Roger Dassen said in an interview Wednesday, without specifying which products or the potential magnitude of any increase.

The comments came as ASML reported second-quarter net sales of 9.3 billion euros ($10.2 billion), beating the 8.8 billion euro consensus, and net profit of 2.9 billion euros versus 2.6 billion euros expected. The company raised its full-year 2026 guidance for the second time, now forecasting revenue of 43 billion to 45 billion euros and a gross margin of 54% to 56%, up from its prior outlook of 36 billion to 40 billion euros and 51% to 53%.

ASML is the sole supplier of EUV lithography machines, which use extreme ultraviolet light to etch the tiniest circuits on advanced semiconductors. With customers including Taiwan Semiconductor Manufacturing Co. and Samsung Electronics accelerating capacity expansion, Chief Executive Officer Christophe Fouquet said the company plans to add 30% to its 2026 low NA EUV capacity and 30% to its deep ultraviolet immersion capacity.

The order intake remained "extremely strong" in the first half of the year, Fouquet said in a statement. ASML's customers continue to "accelerate their capacity expansion plans," translating into commitments across the product portfolio and giving the company "increased visibility into longer-term demand."

Capacity Constraints and Pricing Leverage

ASML's near-term production capacity is effectively sold out for its most advanced machines. The company's ability to raise prices reflects a supply-demand imbalance that gives it unusual leverage for a capital equipment supplier — most chip gear makers face pricing pressure when their customers, the semiconductor manufacturers, hit cyclical downturns.

The pricing power is concentrated in ASML's EUV line, where it holds a monopoly. Each high NA EUV machine costs roughly 400 million euros, and the company is the only manufacturer capable of producing the systems needed to fabricate chips at 3nm and below. TSMC, which reported a 68% jump in June sales, is planning to add two advanced chip packaging plants in Taiwan's Chiayi Science Park, a sign of the scale of capacity expansion underway.

China Exposure and Export Controls

China accounted for 14% of ASML's second-quarter sales, down from 19% in the first quarter, as export restrictions continue to limit shipments of advanced equipment to Chinese customers. South Korea remained the largest market at 43% of sales, driven by Samsung and SK Hynix investments.

The company faces potential additional restrictions from a bipartisan U.S. bill that would cut off sales of DUV machines to Chinese chip companies. That legislation is still working through the U.S. Congress. Dassen said the Chinese market is "moving in sync with the overall behavior that we see globally."

Investment Angle

ASML shares have surged 115% this year, trading at roughly 50 times forward earnings — a valuation that Morningstar senior equity analyst Javier Correonero called "slightly overvalued" relative to his fair value estimate of 35 to 40 times forward earnings. The premium reflects the market's confidence that AI-driven demand for advanced chips will sustain ASML's growth trajectory beyond the current cycle. The company plans to provide an update on longer-term goals at a Capital Markets Day on June 10, 2027.

This article is for informational purposes only and does not constitute investment advice.