ASML Expands into India as Major Investors Increase Stakes

ASML USN070592100

The Dutch semiconductor equipment manufacturer ASML is making strategic moves to establish a presence in India's growing chip market, attracting significant attention from institutional investors. This development comes as Morgan Stanley names the company its top selection in the European semiconductor sector.

Morgan Stanley has raised its price target for ASML from €975 to €1,000 while designating the company as its preferred investment in the European semiconductor space. Analyst Lee Simpson points to increasing demand for both memory and logic chips as a key driver. The adoption of extreme ultraviolet (EUV) systems is being particularly accelerated by DRAM technology, with expectations that five to six EUV layers will be required for future 1c manufacturing nodes.

The financial institution projects a gross margin of 52.3% for 2026, an impressive figure even considering anticipated softening in the older deep ultraviolet (DUV) systems business.

Other analytical firms have expressed similar optimism, with the consensus rating standing at "Moderate Buy" and an average price target of $1,076.33. Citigroup and JPMorgan have reaffirmed their buy recommendations, while HSBC upgraded to "Strong Buy" and Erste Group Bank moved from "Hold" to "Buy."

Institutional Investors Build Significant Positions

Hedge funds and major asset managers are substantially increasing their exposure to ASML shares. American Century Companies expanded its position by 27.8% during the second quarter, acquiring 78,183 shares valued at approximately $62.7 million. This represents just one component of a broader institutional accumulation:

• T. Rowe Price established a completely new position worth $360 million
• Invesco nearly doubled its holdings with a 101% increase to 731,271 shares valued at $484.6 million
• Amundi grew its position by 91.6%, now holding 642,498 shares worth $403.2 million
• Goldman Sachs increased its stake by 26.5% to 952,385 shares valued at $631 million

Institutional investors now control more than one-quarter of all outstanding shares, indicating strong confidence in the company's prospects.

Strategic Expansion into India's Semiconductor Market

ASML executives have visited GIFT City in Gujarat and expressed intentions to establish a customer support office in the region. The company has officially confirmed that it is "in the process of setting up a customer support office in India."

This strategic move coincides with Tata Electronics' development of a massive semiconductor fabrication plant in Dholera. The 91,000-crore rupee project (equivalent to approximately $11 billion), developed in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), is scheduled to begin production in December 2026. The facility is expected to create over 20,000 highly skilled jobs.

Industry observers suggest the support office could evolve into a full-scale operation once the Tata facility ramps up production. While the plant won't require ASML's latest EUV technology, the company's older lithography machines remain significant revenue generators.

The Indian expansion represents a strategic positioning within an emerging semiconductor market that could potentially become ASML's next growth driver.