Dutch semiconductor equipment maker ASML (ASML) recently raised its 2026 sales outlook for the second time this year. 

It now expects revenue of €43 billion to €45 billion, well above the €39.3 billion average analyst estimate and above the high end of its previous guidance.

Then ASML went further. The company expects to produce roughly 65 of its most advanced chipmaking machines this year. It plans to increase that capacity by about 30% in 2027 and is investigating another 30% increase in 2028.

These machines are used to print extremely small patterns onto computer chips, and they are one of the biggest bottlenecks in the semiconductor supply chain today. 

Leading chipmakers depend on ASML’s equipment to manufacture the advanced chips used in AI models and data centers. 

ASML CEO Christophe Fouquet says its customers, which include major chipmakers like Taiwan Semiconductor (TSMC), memory giant Samsung (005930.KS), and Intel (INTC) are increasing their spending plans. 

And that is creating demand for more machines starting this year.

The company already has a large number of orders lined up for 2028. That explains why management is willing to provide unusually detailed production guidance several years in advance.

Citi analysts highlighted how that in itself is a powerful signal. Nobody expects that level of detail or long-term guidance, so ASML has to be confident to be that specific. 

That signal extends down the semiconductor supply chain.

Taiwan Semiconductor, one of ASML’s biggest customers and the world’s leading producer of advanced chips, recently reported a 36% increase in quarterly sales. Chipmakers are adding factory capacity as demand for AI computing continues to grow.

ASML says chipmakers are signing long-term agreements with their own customers that include minimum prices and minimum volumes. Chief Financial Officer Roger Dassen said arrangements like these have rarely appeared in the past.

Those commitments matter because they give semiconductor manufacturers more confidence to invest years ahead. 

The most important signal is not simply that ASML expects stronger sales this year. It is that customers are committing to capacity years before they need the machines.

ASML is making production decisions today for machines customers expect to need in 2027 and 2028. 

All of this helps explain where the market is in the AI buildout, and it’s nowhere near the end. Big orders for chipmaking equipment today will create a chain reaction across the industry. 

Demand for AI computing increases orders for advanced chips. Those orders require new fabrication capacity, and new fabrication capacity requires specialized equipment, much of which takes years to produce and install.

The result is that the bottleneck can appear with the equipment makers long before the final demand appears in quarterly chip sales.

Said simply, the AI bottleneck starts upstream.

Investors naturally watch Nvidia (NVDA), the hyperscalers, and major chip manufacturers for clues about AI spending, but ASML offers an earlier signal. Its machines are required before many of those companies can expand advanced chip production. 

When ASML raises guidance and adds to its manufacturing capacity that spending is already spreading through the rest of the AI economy.

The industry is still adding capacity to meet demand. Customers are planning further ahead, and suppliers are responding with multi-year investments of their own.

That makes ASML’s latest guidance more meaningful than a single strong quarter.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research

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