ASML’s €40 Billion Bet Rests on High-NA Rollout and a Stretched Supply Chain

ASML's next-gen High-NA EUV lithography systems enter commercial production in 2024, as AI demand strains global chip capacity and drives revenue targets to €40B by 2026.

The AI boom is pushing chip-making capacity to its limits, and ASML finds itself at the epicentre of both the opportunity and the constraint. Chief executive Christophe Fouquet, speaking at the Imec ITF conference in Antwerp, confirmed that the first commercial products built with the company’s next-generation High-NA EUV lithography systems will reach the market before the end of this year. The long-awaited shift from research and development into early production is now underway, with mass production of logic and memory chips using the platform expected between 2027 and 2028.

Yet the technological milestone arrives at a moment when the entire semiconductor supply chain is under siege. Fouquet described the supply situation as “very strained,” warning that demand from AI, robotics, satellite technology, and massive infrastructure projects such as the planned “TeraFab” AI factory will continue to outstrip production capacity for years. He sees the global chip market growing to $1.5 trillion by the end of the decade – a volume that makes reliable forecasting nearly impossible, according to the Dutch group’s management.

ASML has already raised its financial sights to match that ambition. The company now targets annual revenue of up to €40 billion in 2026, up from the €8.8 billion it booked in the first quarter at a gross margin of 53%. To hit that mark, ASML is ramping up its own manufacturing output and improving the efficiency of tools already in the field. In the current quarter, it expects revenue to climb to as much as €9 billion, a jump that would give fundamental backing to the stock’s recent rally.

That rally has been spectacular. The shares touched a new 52-week high of €1,401.60 on Friday, bringing the year-to-date gain to nearly 42 per cent. The market is treating ASML as the classic picks-and-shovels play in the global AI gold rush. Yet paradoxically, the relative strength index stood at 31.9 after the surge, a level that typically signals oversold conditions – highlighting the volatility that still grips the name. Analysts at UBS reiterated their “top pick” rating on the stock, noting that the tight supply environment could extend the current investment cycle into 2028. The average analyst price target of €1,483 implies roughly 10 per cent upside from the current level.

The High-NA platform’s commercial debut is a key catalyst. Fouquet stressed that ASML is bringing the technology to market jointly with its lead customers, who are testing it on product wafers to ensure the precision needed for the next generation of smaller, more efficient processors. Separately, the company is developing a second tool specifically for the advanced packaging of physically large AI chips – a recognition that the bottleneck is not just in lithography but in how chips are assembled and connected.

Geopolitics remains the wild card. The ambitious 2026 revenue forecast includes explicit buffers for potential tightening of export controls. While the order book is swelling and the technology pipeline is full, the biggest variable is whether ASML can convert industry demand into actual deliveries without hitting its own production ceiling. If it manages to hit the Q2 revenue target of €9 billion, it will go a long way toward convincing investors that the record run has more room to run.