ASML’s €1,700 Price Target Holds as Samsung and SK Hynix Rush to Fill TSMC’s High-NA Gap

ASML raises 2026 revenue guidance to €36-40B as memory makers offset TSMC delays, with South Korea driving nearly half of Q1 sales amid AI demand surge.

The semiconductor equipment giant has delivered a clear message to markets: the artificial intelligence boom is reshaping demand patterns faster than any single customer can dictate. ASML’s first-quarter results and revised full-year guidance paint a picture of an industry in flux, where delays from one logic giant are being more than offset by a stampede of memory-chip makers.

A Guidance Bump That Tells a Bigger Story

ASML now expects full-year 2026 revenue of €36 billion to €40 billion, up from the previous range of €34 billion to €39 billion. The upgrade follows a first quarter that saw sales hit €8.8 billion, roughly €110 million ahead of the analyst consensus. Earnings per share on a GAAP basis came in at €7.15, beating expectations by €0.54, while gross margins improved by a full percentage point to 53% — a lift powered by high-margin upgrades and service contracts on the installed base.

The numbers are solid, but the real narrative lies in who is buying what — and why they are buying it now.

Memory Makers Step Into the Breach

TSMC’s decision to push deployment of High-NA EUV machines out to at least 2029 initially looked like a headwind. But the order book tells a different story. SK Hynix took delivery of its first High-NA EUV system late last year, integrating it to strengthen its position in high-bandwidth memory and 1c DRAM production. Samsung has also been actively securing capacity for the most advanced lithography tools.

The shift is dramatic. In the first quarter of 2026, South Korean customers accounted for nearly half of ASML’s total revenue, up sharply from a year ago. This comes as China’s share of sales fell to 19% from roughly one-third in 2025 — a rebalancing that helps insulate the company from escalating export controls. The Dutch government has signaled resistance to the MATCH Act, a proposed multilateral restriction that could affect DUV lithography shipments, but for now the structural demand from AI infrastructure buildout is drowning out the geopolitical noise.

Supply Chain Constraints Cap Near-Term Upside

The surge in orders is running into production bottlenecks. Industry group SEMI reports that lead times for advanced wafer fabrication equipment are lengthening, and ASML has acknowledged that component shortages are limiting output. While customers are queuing up, the company cannot ship machines as fast as it would like — a constraint that tempers near-term revenue potential even as the long-term outlook brightens.

Analysts Push Targets Higher

The combination of strong execution and a shifting customer base has prompted fresh upgrades. Erste Group raised its earnings estimate for the current year to $37.21 per share, well above the consensus, while forecasting another sharp jump in 2027. Royal Bank of Canada lifted its price target to $1,700, maintaining an “Outperform” rating.

The shares closed at €1,218 on Thursday, up roughly 23% since the start of the year and just shy of their all-time high. The stock trades at a price-to-earnings multiple of around 51.6 — a premium that the market has so far accepted given the growth trajectory. The analyst consensus stands at “Moderate Buy.”

Dividend Growth and Balance Sheet Strength

ASML has announced a total dividend of €7.50 per share for the current year, a 17% increase from 2025. The company holds €8.4 billion in cash and carries minimal debt, giving it ample firepower to navigate any downturn. Shareholders can expect the next payout on May 5.

The Bigger Picture

What emerges from the quarter is a company riding a wave of demand that is both broad and deep. The AI investment cycle is forcing chipmakers to lock in capacity years ahead of normal schedules, and ASML’s lithography tools are the bottleneck in that chain. The delay from TSMC is a tactical shift, not a strategic retreat — and the memory sector is more than filling the gap. For now, the structural tailwinds are strong enough to keep the stock near its highs, even as supply chain and geopolitical risks linger in the background.