ASML Lifts Guidance to €40 Billion, but a Tech Conference Sparks Employee Backlash

Dutch chip equipment giant ASML raises 2026 outlook, reports €8.8B Q1 revenue, and sees record EUV demand, but faces internal debate over Elon Musk's conference invitation.

The Dutch lithography titan finds itself navigating an unusual tension this week: a floor full of engineers bristling over the choice of keynote speaker, even as the company’s order books swell to record levels. A technology conference that ASML has run since 1999 has suddenly become a flashpoint for internal discontent after the invitation of Elon Musk, a figure whose public persona divides opinion.

Internal company platforms have lit up with debate over whether the virtual appearance by the Tesla and SpaceX chief aligns with ASML’s commitment to an inclusive workplace. Several employees are reportedly considering boycotting the session. ASML has defended the move as a routine exchange of ideas between engineering and R&D partners, a key ingredient in its development of EUV lithography and the next-generation High-NA systems. Yet the controversy arrives at a delicate moment: the shares have more than doubled since their August 2025 trough, and the company has just raised its full-year outlook for 2026.

A Structural Boom Beneath the Noise

ASML reported first-quarter 2026 revenue of €8.8 billion, a gross margin of 53.0%, and net profit of €2.8 billion. The second-quarter revenue forecast stands between €8.4 billion and €9.0 billion. More telling, the annual guidance now lands at €36 billion to €40 billion, up from an earlier range of €34 billion to €39 billion, with gross margin expected between 51% and 53%.

Chief executive Christophe Fouquet said chip demand continues to outstrip supply, with customers accelerating capacity plans for 2026 and beyond under long-term agreements. That is not a cyclical tick but a structural reality. ASML is the sole manufacturer of EUV lithography machines, the indispensable tools for producing advanced semiconductors, particularly the chips that power artificial intelligence.

The scale of the ramp-up is immense. ASML plans to ship roughly 60 of its most popular Low-NA EUV systems this year, a 25% increase from 2025, and target 80 units for 2027. Capacity is expanding, but not fast enough to close the gap with surging demand from hyperscalers and memory makers. That imbalance gives ASML pricing power.

A notable shift is underway in the product mix. For the first time, memory chips accounted for 51% of system sales in Q1, overtaking logic chips at 49%. Samsung and other memory manufacturers are buying aggressively amid a global shortage of high-performance memory.

High-NA and the China Question

The longer-term trajectory hinges on High-NA EUV, ASML's next-generation platform. Intel and SK Hynix are preparing for adoption from 2027, with each unit costing about $400 million — roughly double current EUV machines. TSMC, the world’s largest contract chipmaker, remains cautious, preferring to extract more value from existing Low-NA tools. ASML has set a 2030 revenue target of €44 billion to €60 billion, with High-NA as a contributor but not the sole driver.

China is the most visible risk. It was ASML’s largest single market in 2025, representing 33% of total revenue, rising to 36% in the fourth quarter. For 2026, the company expects that share to drop to around 20% as existing export restrictions take effect. The proposed MATCH Act in the United States would go further, banning not only exports of older DUV immersion systems but also maintenance of already-installed equipment. That maintenance ban carries larger economic implications than the export curb itself.

South Korea is partly filling the gap, accounting for 45% of system sales in the first quarter of 2026, underscoring the flexibility of ASML’s customer base.

Stock Volatility and the Cultural Wildcard

The shares closed at €1,479.80, roughly 38% above their 200-day moving average, after touching a fresh 52-week high of €1,580.60 intraday before pulling back 2.3%. The annualised 30-day volatility sits above 50%, reflecting sharp reactions to macro news and regulatory signals from Washington.

For now, the Musk controversy remains a soft issue — no orders have been lost, no guidance changed. But it adds a human dimension to a company that normally dominates headlines through order numbers and export controls. ASML’s internal culture, long a source of its engineering edge, is under a public microscope at the exact moment when its market power has never been greater. How management handles the discord could determine whether this remains a passing spat or becomes a longer-term distraction.