ASML's $47 Billion Revenue Target Hinges on Low-NA as TSMC and China Create Crosscurrents

ASML lifts 2026 revenue forecast to $47.19B on record backlog, but key customer TSMC delays High-NA EUV adoption to 2029, causing stock volatility before recovery.

Investors in ASML had to weigh two sharply different signals in recent days: the chip-equipment giant raised its 2026 revenue forecast to as much as $47.19 billion, while its most important customer, TSMC, confirmed it would not deploy the company’s newest generation of extreme ultraviolet (EUV) lithography tools until 2029. The stock initially dropped 4.5% on May 12 before rebounding 3.06% the following day to close in New York at $1,520.94, as analysts rushed to point out that the delay does not undermine ASML’s core earnings driver.

The revenue upgrade, which the management unveiled on the back of an order backlog that had swelled to roughly $45 billion, reflects what Chief Executive Christophe Fouquet described as a “clear imbalance” between semiconductor demand and global production capacity. The company’s EUV systems remain essential for making the most advanced chips used in high-performance computing and artificial intelligence. To hit the upper end of the new target, ASML will have to accelerate production of its current, non-High-NA EUV platforms.

TSMC’s decision to push High-NA EUV adoption back to 2029 flies in the face of earlier market expectations that the world’s largest contract chipmaker would start using the $350 million-plus tools much sooner. Kevin Zhang, the company’s deputy co-COO, said TSMC’s research and development has been “extraordinarily effective” in squeezing more performance out of existing EUV equipment. The chipmaker plans multiple variants in the 1-nm to 2-nm range—including nodes labeled A12 and A13—that will rely on conventional Low-NA technology through 2028-2029.

Bernstein analysts viewed the postponement as no surprise, noting TSMC had previously signalled it would skip High-NA for its A14 node. That leaves ASML’s Low-NA generation as the workhorse for the foreseeable future. Chief Financial Officer Roger Dassen is aiming to ship at least 60 Low-NA systems in 2026, rising to approximately 80 in 2027. The company still expects High-NA to enter high-volume production in 2027-2028 and targets total revenue of up to €60 billion by 2030.

Meanwhile, ASML continues to navigate a tightening geopolitical environment. The proposed MATCH Act under discussion in Washington could further restrict the sale and maintenance of older DUV machines to Chinese customers. ASML has already adjusted its expectations for China: the region’s share of net system sales dropped from 36% in the fourth quarter of 2025 to 19% in the first quarter of 2026. For the full year, the company projects that China will account for roughly 20% of revenue, down from about one-third in 2025.

The stock’s recovery after the TSMC news was aided by a positive note from a major investment bank that raised its price target and maintained a buy rating. In Amsterdam, the shares closed at €1,350.20 on Wednesday, matching their 52-week high. Since the start of the year, ASML has gained 36.62%, and over the past twelve months the advance stands at 96.31%. The company has also been active in the market with ongoing share buybacks.

Fundamental performance remains solid. In the first quarter, ASML posted net revenue of €8.8 billion and a gross margin of 53.0%, with net profit reaching €2.8 billion. For the full year 2026, management expects net sales between €36 billion and €40 billion and a gross margin in the range of 51% to 53%. The next quarterly report in July will be closely watched for order intake figures and any hints about the buying patterns of other chipmakers beyond TSMC.