ASML (NASDAQ:ASML) reported record third-quarter revenue and gross margin as demand for semiconductor manufacturing equipment strengthened amid continued investment in artificial intelligence-related logic and memory capacity.
Total net sales reached €11.7 billion in the third quarter of 2026, near the high end of the company’s guidance. Net system sales were €8.4 billion, including €4.1 billion from EUV systems and €4.3 billion from non-EUV systems. The EUV total included one High-NA EUV system sale. Logic accounted for 54% of net system sales, while memory represented 46%.
Gross margin was 57.5%, above guidance, helped by high-margin components within the installed-base management business. Net income was €5 billion, including approximately €500 million from an increase in the valuation of ASML’s initial investment in Mistral AI. Earnings per share were €12.95.
Fourth-Quarter and Full-Year Outlook
ASML forecast fourth-quarter sales of between €14.2 billion and €15.2 billion, with gross margin of around 57%. Installed base management sales are expected to reach about €3.7 billion in the quarter.
For the full year, the company expects total net sales of €44 billion to €45 billion and gross margin of around 56%. The outlook implies roughly 36% year-over-year sales growth, driven by expected growth of more than 45% in EUV sales, around 20% in non-EUV-related system sales, and about 50% in installed base management sales.
- Logic net system sales are expected to rise about 10% for the year.
- Memory net system sales are expected to increase about 75%, driven by customer capacity expansion and growing EUV adoption on advanced DRAM nodes.
- China is expected to account for roughly 20% of ASML’s total sales in 2026.
ASML ended the third quarter with €12.7 billion in cash equivalents and short-term investments. Free cash flow was €11.4 billion, which Dassen said reflected customer order momentum and associated down payments. During the quarter, the company repurchased approximately €4.1 billion of shares under its 2026-2028 buyback program and paid a first interim dividend of €1.88 per ordinary share. A second €1.88 interim dividend is scheduled to be payable Nov. 4.
Capacity Expansion Amid Strong Demand
Chief Executive Officer Christophe Fouquet said the pace of AI infrastructure build-outs remains robust, while shortages in advanced logic and memory nodes have widened and extended further into the future. He said customers expect demand for their products to exceed supply through at least 2028, leading them to accelerate capacity plans and consider expansion beyond that period.
ASML said it is increasingly receiving orders for 2028, while customers have also expressed interest in placing orders for 2029 and 2030. Management said it has not yet accepted those later orders because it is assessing total demand and its expected capacity in those years before allocating production among customers.
The company expects to produce roughly 65 low-NA EUV systems in 2026, up nearly 50% from 44 systems shipped in 2025. It also now expects to deliver a similar number of DUV immersion systems in 2026 as it did last year, despite an initially lower output target.
ASML previously targeted 30% capacity growth for both low-NA EUV and DUV immersion systems in 2027 and had been evaluating a further 30% increase for 2028. Dassen said current plans for 2027 and 2028 would not fully meet customer demand, and the company is now exploring expansion above that previously considered 2028 growth level.
Fouquet said the company does not currently view Carl Zeiss or other suppliers as bottlenecks to the planned capacity expansion, though ASML continues to work closely with its supply chain. Management cited improvements in factory footprint utilization and production cycle times as important levers for expanding output.
Productivity Upgrades and Technology Roadmap
ASML plans to begin introducing its next-generation low-NA EUV system, the NXE:3800F, in small quantities in early 2027. The system is specified for throughput of 260 wafers per hour, compared with 230 wafers per hour for the NXE:3800E. The company also plans to introduce a next-generation critical DUV immersion system capable of 330 wafers per hour.
Fouquet said higher-throughput tools provide customers with more wafer capacity and create additional value that ASML expects to capture through pricing. Dassen said pricing discussions completed with customers resulted in increases for the company’s most critical high-volume manufacturing products. The changes are not expected to affect 2026 results materially, should begin to contribute in 2027, and are expected to have their full effect from 2028 onward.
Dassen said a significant part of the pricing increase should support gross margin, although some of the benefit will help cover costs associated with ASML’s production ramp and supply-chain expansion.
High-NA EUV Progress
Management highlighted growing momentum for High-NA EUV, ASML’s next-generation lithography technology. Fouquet noted that Intel has exposed more than 1 million wafers using High-NA EUV systems, with performance that meets or exceeds comparable layers patterned with low-NA EUV.
Samsung and TSMC have announced plans to introduce High-NA EUV into high-volume manufacturing in 2028 and 2030, respectively, according to ASML. With availability across the existing High-NA fleet approaching 90%, Fouquet said adoption should increase “node and node” over time.
ASML and TSMC also began an industry initiative to develop larger-format EUV photomasks. The effort targets a 12-inch mask pilot line by 2031 and production in 2033. Fouquet said broad customer backing for the initiative signals expectations for increasing High-NA EUV usage over time.
The company also shipped its first YieldStar 550 metrology system during the quarter. ASML said the overlay measurement system is designed to support tighter process-control requirements for the 14-angstrom logic node and 1D DRAM node, while offering more than 60% higher productivity than the previous YieldStar generation.
About ASML (NASDAQ:ASML)
ASML Holding N.V. is a Netherlands-based technology company that develops and manufactures advanced lithography systems used by semiconductor manufacturers to produce integrated circuits. Its equipment projects patterns onto silicon wafers, enabling the creation of increasingly smaller and more powerful semiconductor features.
ASML’s product portfolio includes extreme ultraviolet (EUV) lithography systems, deep ultraviolet (DUV) lithography systems, and related metrology and inspection solutions.
