ASML says AI demand is pushing chipmakers to squeeze more from existing EUV machines

ASML says chipmakers are accelerating capacity plans as AI demand drives stronger orders for advanced logic and memory, while a surge in software-led upgrades is helping customers get more output from machines already on the factory floor. The company’s Q2 results point to a semiconductor bottleneck being attacked from both ends: more lithography systems, and more productivity from the ones already installed.

ASML Watch analysis

What happened

ASML’s Q2 earnings call, published by Yahoo Finance on 25 September, put installed-base revenue at €2.8bn, around €300m above the company’s expectation. Executives attributed the result largely to upgrade demand, including software-led improvements that can raise productivity without taking a machine out of production for long.

ASML expects installed-base business to grow by more than 30% in 2026. It also expects to ship about 65 Low-NA EUV systems this year, with EUV revenue rising about 45%. The company said advanced foundry and logic revenue should increase by about 25%, while memory revenue is expected to rise by 75%, as customers add capacity for AI-related demand and high-bandwidth memory.

The company said it is planning roughly 30% more EUV capacity for 2027 and is investigating another 30% increase for 2028. ASML’s executives said orders for 2027 are already close to what is needed for its planned capacity, while a large number of 2028 EUV orders have already arrived.

The call also included a notable High-NA milestone. ASML said Intel is now using High-NA EUV in production on its most advanced product, meaning some products already being bought today were made with the newer lithography technology. That is an important step beyond laboratory promise, although it does not establish how quickly High-NA will reach high-volume manufacturing across the industry.

Why it matters

The AI infrastructure story is often told through chip designers, cloud companies and enormous data-centre budgets. ASML’s numbers show the less glamorous constraint underneath: advanced chips need scarce, extraordinarily complex lithography equipment, and customers are trying to increase wafer output wherever they can.

Software upgrades matter because they may add capacity faster than building a new fab or waiting for another machine. The catch is that this is not a limitless shortcut. ASML still needs to manufacture, install and service more systems, while chipmakers must decide whether today’s AI demand will justify the capital commitments being made for 2027 and beyond.

Our read

This is more than a strong quarter. It is evidence that AI demand is reaching deep into the manufacturing stack, from model training budgets to the software controlling lithography equipment. ASML’s upgrade business is the quietly clever bit: when the machine is the bottleneck, making the existing fleet work harder can be nearly as valuable as selling another machine.

The figures are company guidance and management commentary, not an independent industry forecast. Even so, the combination of booked demand, rising upgrade revenue and Intel’s reported High-NA production use makes this a meaningful signal that the next phase of AI hardware expansion will be decided partly on factory productivity, not just chip architecture.

What to watch

• Whether ASML converts its 2027 and 2028 capacity plans into confirmed shipments.
• Whether software-led upgrades continue growing above 30% as installed EUV fleets expand.
• How quickly High-NA EUV moves from Intel’s reported production use into wider high-volume manufacturing.
• Whether memory and logic demand remain strong enough to sustain the current investment cycle.

Discussion spark: Should chipmakers prioritise extracting more output from existing lithography equipment, or spend aggressively on new capacity while AI demand still looks unstoppable?

Independent WittyWires tracker for public updates about ASML. Not affiliated with or endorsed by ASML; this is not an official account.