ASML’s Capacity Choke Point Draws UBS Upgrade as Memory Makers and AI Drive Orders
Published on 05/21/2026 at 08:31 | Redaktion boerse-global.de
The lithography giant is caught between surging demand and its own production limits — a dynamic that has prompted UBS to lift its price target on ASML to €1,900 from €1,600, making the Dutch company its top pick in European semiconductors. The upgrade reflects a conviction that the market underestimates ASML’s earnings power, even as chief executive Christophe Fouquet warns that the chip industry remains “supply-constrained” for the foreseeable future.
UBS now expects earnings per share of €48.42 in 2027 and €59.73 in 2028, both well above the current consensus. The analyst team points to a structural shift in memory chips, predicting they will account for 30% to 35% of ASML’s revenue by 2026. Memory manufacturers are racing to install new capacity for high-bandwidth chips needed alongside AI processors, and ASML’s extreme ultraviolet (EUV) tools are indispensable for the most advanced nodes.
The market rewarded the optimism. ASML shares climbed more than 6% on Wednesday to close at €1,332 in Amsterdam, with some platforms showing an intraday gain of as much as 6.7%. The stock has risen roughly 35% since the start of the year and has more than doubled over the past twelve months.
Fouquet, speaking in Antwerp, sketched out a long-term horizon that reinforces the bullish case: the global semiconductor market could expand to $1.5 trillion by 2030, up from around $792 billion last year. Demand is being fuelled by AI data centres, satellite networks such as Starlink, and robotics. ASML’s core advantage lies in its monopoly on EUV lithography, the technology required to etch the tiniest circuits onto wafers.
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That monopoly is now being tested by the very tightness of supply. UBS estimates that ASML’s production toolset could support wafer output growth of more than 50% in 2027, but customer demand is likely to expand even faster. In the first quarter, ASML booked revenue of €8.77 billion and net profit of €2.76 billion, while its order backlog stood at roughly $45 billion. For the full year, management guides for €36 billion to €40 billion in sales.
A dramatic shift in the order book underscores the changing market. Memory chipmakers accounted for 51% of ASML’s first-quarter orders, up from 30% in the previous quarter. SK Hynix and Samsung are competing for EUV tools, and South Korea has become ASML’s largest single market, representing 45% of quarterly activity. The pivot to memory reflects the voracious appetite for high-bandwidth storage that sits close to AI processors.
On the technology front, ASML’s next-generation High-NA EUV machines — priced at roughly $400 million each — are entering the commercial phase. Fouquet expects the first chips produced on these tools to emerge in the coming months. Intel and SK Hynix are preparing to integrate the equipment, while TSMC appears to be sticking with standard EUV for now. Volume production is likely still two to three years away, but the transition is a key catalyst for future earnings.
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ASML is also planting flags in new geographies. The company is supporting Tata Electronics’ $11 billion chip fab in Dholera, Gujarat, which will produce 300-millimetre wafers targeting automotive and mobile markets with nodes ranging from 28 to 110 nanometres. A second Tata facility in Assam is also nearing production. India is emerging as a serious semiconductor manufacturing destination, and ASML is positioning itself at the centre of that buildout.
Not everything is running smoothly. Fouquet has criticised the European Union’s AI Act, calling for its reform or even abolition, warning that overly simplistic rules could disrupt complex supply chains. Export controls remain a sore point: ASML wants clearer, uniform guidelines, especially regarding China, which accounted for 19% of first-quarter revenue after previous restrictions reshaped its sales patterns. The interplay between regulatory friction and the relentless demand for AI and memory will determine whether ASML’s stretched valuation can hold as the technology cycle progresses.
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