ASML Earnings Report Analysis: A Frenzied Order Bonanza—The Super Cycle Has Arrived
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ASML Earnings Report Analysis: A Frenzied Order Bonanza—The Super Cycle Has Arrived
The overlap of two cycles could extend ASML’s “super cycle” to 2030—or even beyond. The €13.2 billion single-quarter order record is only the beginning.
Navigating Web3 tides with focused insightsBy Niu Sik, TechFlow
€13.2 billion.
This is the total order value ASML booked in Q4 2025—more than double the market expectation of €6.3 billion—and the highest quarterly order intake in ASML’s history.
On January 28, lithography giant ASML released financial results so strong that Wall Street couldn’t stay seated: its pre-market share price surged 5%.
This earnings report serves as a clear signal that the AI boom has finally reached the upstream end of the semiconductor supply chain.
Overnight, Orders Exploded
In Q4 2025, ASML posted revenue of €9.7 billion and net profit of €2.8 billion, with a gross margin of 52.2%. These figures fell within expectations—and were even somewhat unremarkable.
But orders? That’s where the market truly went wild.
Of the €13.2 billion in orders, €7.4 billion came from EUV lithography systems—machines costing up to €200 million apiece, which serve as the sole key for TSMC, Samsung, and SK Hynix to advance into 3nm, 2nm, and beyond.
Even more telling is the structural shift in orders—a critical signal: memory manufacturers have entered full “frenzy mode.”
Logic-related orders totaled €5.8 billion—up €3 billion quarter-on-quarter, in line with seasonal trends.
Memory-related orders hit €7.4 billion—up €4.9 billion quarter-on-quarter, far exceeding historical norms for this period.
Major DRAM makers—including SK Hynix, Samsung, and Micron—are placing orders well beyond seasonal demand. The capacity arms race for HBM (High Bandwidth Memory) has reached white-hot intensity.
CFO Roger D’Arcy stated it plainly: “Customers have become markedly more optimistic about medium-term market prospects, primarily because they see AI-related demand as more durable.”
This optimism has translated directly into hard cash orders. ASML’s order backlog now stands at €38.8 billion, of which €25.5 billion consists of EUV orders. Put simply: ASML’s work for the next two years is already fully booked.
Who’s Placing the Crazy Orders? Korea’s “Revenge”
An interesting detail emerges when examining regional revenue breakdowns.
In Q4 2025, mainland China remained ASML’s largest revenue source, accounting for 36%—or €3.5 billion—well above the company’s prior expectation of 25%. This surge was driven mainly by sustained Chinese customer demand for ArFi (immersion DUV) tools.
But what’s truly noteworthy is Korea: its revenue share rebounded to 22% in Q4—around €2.1 billion.
This figure reflects SK Hynix’s and Samsung’s aggressive capacity expansions. SK Hynix has explicitly announced plans to procure 12 EUV systems in 2026 to ramp HBM3e output, as NVIDIA’s H100, H200, and B200 chips are desperately awaiting supply.
Samsung is even more urgent. Having been thoroughly outmaneuvered by SK Hynix in the HBM market—with persistently low yields—it sees the AI wave as its final window of opportunity. Without aggressive expansion now, it risks complete marginalization.
Barclays analysts called it outright: SK Hynix will secure 12 EUV systems in 2026—a single-system price tag of €260 million means a total of €3.1 billion.
More critically, this memory-makers’ order surge has only just begun.
Micron recently announced its 2026 capital expenditure will exceed $20 billion—an increase of nearly 40% year-on-year. TSMC raised its 2026 capex guidance to $52–56 billion, over $10 billion higher than originally planned. Ultimately, much of this money flows straight to ASML.
2026: From “Cautious” to “Aggressive”
Just months ago, ASML was still forecasting “flat or even declining revenue in 2026.”
Now? It has issued a new revenue guidance range of €34–39 billion, with a midpoint of €36.5 billion—representing 12% growth over 2025’s €32.7 billion.
Yet even this guidance remains conservative.
Why? Because after TSMC and Micron raised their capex forecasts, mainstream institutions have already lifted their 2026 ASML growth expectations to over 20%.
ASML’s own guidance—“growth of 4–19%,” with a midpoint of 12%—is notably below market consensus. Such “under-promising” is rare among equipment stocks, where companies typically set ambitious but attainable targets, then deliver upside surprises to drive share-price gains.
So why is ASML being so cautious? Two possible reasons:
First, uncertainty surrounding the Chinese market. ASML expects China’s revenue contribution to fall to 20% in 2026—down from nearly 30% in 2024–2025. What does 20% mean? If ASML hits its €36.5 billion 2026 revenue target, China would contribute €7.3 billion—more than double the €3.5 billion it generated in Q4 2025 alone. But given export controls and fading stockpiling demand, whether this level is achievable remains uncertain.
Second, the ramp-up timeline for High-NA EUV. In Q4 2025, ASML delivered two High-NA systems (EXE:5200B) and recognized revenue. Priced at €380 million each, these “monsters” could easily lift revenue if more units ship in 2026. Yet the issue is client readiness: aside from Intel, other customers remain hesitant. TSMC believes current Low-NA EUV plus multi-patterning suffices through sub-1nm nodes, making High-NA adoption non-urgent.
Hence ASML’s “conservative with room to spare” guidance—actually a positive sign in equipment stocks, implying confidence in beating expectations without overcommitting publicly.
Subtle Shifts in Product Mix
Digging deeper into product data reveals some intriguing insights.
EUV: 14 units shipped in Q4, average selling price (ASP) €260 million, generating €3.64 billion in revenue—a 22% YoY increase.
ArFi (immersion DUV): 37 units shipped in Q4, ASP €82 million, generating €3.03 billion in revenue—a 4% YoY increase.
Together, EUV and ArFi accounted for nearly 88% of ASML’s revenue—the undisputed cash cows.
But here’s the nuance: EUV revenue growth stemmed largely from ASP increases—not unit volume. While 14 EUV systems shipped in Q4 isn’t particularly high, ASP rose from roughly €240 million to €260 million.
Why the ASP bump? Because product mix is upgrading.
ASML’s current flagship is the NXE:3800E Low-NA EUV system, which has achieved its target throughput of 220 wafers/hour—and even reaches 230 wph in select customer settings. This is a “mature-to-perfection” cash-printing machine.
Meanwhile, High-NA EUV systems (EXE series) command €380 million per unit—nearly double the price of Low-NA models. Revenue recognition for two High-NA systems in Q4 2025 directly lifted EUV’s average selling price.
If High-NA shipments climb from two to ten units in 2026, ASML’s revenue growth could easily surpass 20%.
That hinges on when TSMC and Samsung place firm orders. Currently, Intel is the most aggressive buyer, having accepted its first high-volume-manufacturing EXE:5200 system for use in its 14A process node.
TSMC is watching. Samsung is hesitating. Whoever adopts High-NA first gains a decisive edge in the sub-2nm process race—but no one wants to be the first to bear the costs and time required to ramp yields.
The AI Bottom Line: Compute = Money, Memory = Bottleneck
The root cause of this order explosion is simple: AI is consuming everything.
But unlike a year ago, the transmission path of AI demand has shifted.
A year ago, attention focused on “How many GPUs did NVIDIA sell?” or “Is TSMC’s CoWoS capacity sufficient?” Now, the bottleneck has moved squarely to memory.
Large language models like ChatGPT, Gemini, and Claude demand infinite compute. But raw compute power alone isn’t enough—you need ultra-fast memory to feed those compute “monsters.”
HBM3e is memory purpose-built for AI. Its bandwidth exceeds standard DDR5 by over six times, ensuring GPUs aren’t held back by memory I/O during training and inference.
The problem? HBM capacity is extremely tight.
SK Hynix dominates the HBM market with ~80% share. Samsung’s yields remain stubbornly low, giving it only ~15% share. Micron has just entered the space, with mass production slated for 2026.
NVIDIA, AMD, Google, Microsoft, and Amazon are all scrambling for HBM. The supply-demand gap is expected to persist at least through 2027.
So memory makers aren’t merely expanding—they’re “desperately expanding.”
Micron’s 2026 capex: $20 billion, up ~40% YoY. SK Hynix’s 12 EUV orders. Samsung raising memory business capex by over 50%.
All this money ultimately becomes ASML orders.
By application, ASML’s current system revenue breaks down as ~70% logic chips and ~30% memory chips. Yet in orders, memory already accounts for nearly 60%.
This implies memory will be ASML’s primary growth engine over the next 12–18 months.
The Chinese Market: From “Stockpiling Frenzy” to “Normalization”
If there’s any less-optimistic news, it’s regarding the Chinese market.
ASML projects China’s 2026 revenue share will fall to 20%, down from nearly 30% in 2024–2025—and as high as 36% in Q4 2025 alone.
Why the decline? Because 2024–2025 Chinese orders were essentially “panic-buying.”
U.S. chip restrictions on China have tightened relentlessly; export licenses for certain high-end DUV tools—especially immersion ArFi—have become increasingly difficult to obtain. Chinese foundries knew: “Buy while you still can—and stockpile as much as possible.”
But such stockpiling cannot last indefinitely.
In 2026, Chinese manufacturers’ inventories will likely be sufficient, causing new procurement demand to naturally decline. A 20% share is still substantial—equivalent to €7–8 billion annually.
Yet for ASML—accustomed to China’s “over-contribution”—this shift requires adjustment.
Even more concerning is gross margin pressure.
The Chinese market primarily purchases high-margin immersion DUV tools (ArFi), whose margins actually exceed those of Low-NA EUV. A decline in such orders will inevitably weigh on overall profitability.
Hence ASML’s 2026 gross margin guidance of 51–53%, slightly below 2025’s full-year 52.8%.
Here’s another detail: Q4 gross margin was 52.2%, while the 2026 full-year guidance is 51–53%. This suggests ASML expects H1 2026 gross margin to dip below 52.2%, likely due to reduced high-margin orders from China.
High-NA: A Decade-Defining Bet—or an Expensive “Option”?
Beyond conventional EUV, ASML is developing its next big bet: High-NA EUV.
This next-generation lithography technology commands a staggering €380 million per unit. In Q4 2025, ASML delivered two High-NA systems and recognized revenue.
Currently, Intel is the most aggressive buyer, having accepted its first high-volume-manufacturing EXE:5200 system for deployment in its 14A process.
ASML expresses strong confidence in High-NA performance: “Imaging, performance, and overlay results are all excellent.”
Yet broad commercial adoption may not arrive until 2027–2028.
Why? Because both TSMC and Samsung are still watching.
TSMC’s logic is straightforward: “We’re already in volume production at 2nm using Low-NA EUV plus multi-patterning. Yields are solid, costs controllable. Our 1.4nm node is also progressing well—still using Low-NA. Only sub-1nm will require High-NA.”
In other words, TSMC believes Low-NA EUV still has three more years of runway.
Samsung’s stance is more nuanced. Having suffered major yield setbacks at 3nm—due to slow GAA architecture ramp—it trails TSMC by two generations. Its top priority now is boosting 3nm yields and winning back lost customers.
High-NA? Let Intel test the waters first.
But if Intel successfully achieves high-yield, cost-effective High-NA manufacturing with its 14A node, TSMC and Samsung will instantly follow suit—and High-NA orders will cascade like an avalanche.
That’s why ASML dares to project €44–60 billion in 2030 revenue.
Because High-NA isn’t just an equipment upgrade—it lifts ASP from €200 million to €400 million. As long as shipment volumes hold steady, revenue doubles effortlessly.
Laying Off 1,700 Employees: Optimization—or Anxiety?
Buried within this stellar earnings report lies a less-positive development: ASML plans to cut 1,700 jobs, mostly in the Netherlands and partly in the U.S.
The rationale offered: “Our ways of working have become less agile in certain areas.”
This explanation is subtle. ASML isn’t short on cash or orders—it perceives organizational bloat.
The layoffs focus primarily on technical and IT departments, aiming to “strengthen engineering and innovation capabilities in key areas.”
In plain terms: prune peripheral functions and concentrate resources on core R&D.
Actually, this is a positive signal—ASML is preparing for larger-scale growth and needs a more flexible, efficient organizational structure.
Yet another interpretation exists: ASML may be anxious about High-NA EUV’s R&D progress and yield ramp. Cutting 1,700 jobs frees up funds for more critical technology breakthroughs.
After all, Intel has already taken delivery of its first High-NA system—if its 14A process achieves smooth high-volume manufacturing, TSMC and Samsung will immediately follow. At that point, ASML must be ready with sufficient production capacity and technical reserves to absorb the incoming order flood.
€12 Billion Share Buyback: Confidence—or “Stabilization”?
ASML announced a new €12 billion share buyback program, to be completed by end-2028.
The previous program (2022–2025) was also €12 billion—but only €7.6 billion was executed.
Why the shortfall? Because share prices rose too quickly, making buybacks prohibitively expensive—and the company deemed them uneconomical.
Launching a new buyback program signals two things:
First, strong confidence in future cash flow. €12 billion is no small sum—ASML’s willingness to commit this amount reflects deep conviction in its 2026–2028 earnings power.
Second, current valuation appears attractive. Had ASML viewed its shares as overvalued, it wouldn’t rush to repurchase. Launching a buyback signals management believes the current valuation is fair—or even undervalued.
Dividends also increased by 17%, to €7.50 per share. This is consistent with ASML’s long-standing practice: earn profits, then return them to shareholders.
One Company, Defining an Era
ASML’s earnings report has never been just about one company’s performance.
It’s the barometer for the entire semiconductor supply chain—the thermometer measuring how deeply the AI wave has penetrated the manufacturing layer—the fuel gauge determining whether TSMC, Samsung, NVIDIA, and others can continue their breakneck pace.
In 2025, ASML achieved €32.7 billion in revenue and €9.6 billion in net profit—up 16% YoY. Gross margin stood at 52.8%; net margin, 29.4%.
For 2026, ASML forecasts 12% revenue growth (conservative estimate), while market consensus leans toward >20% (aggressive estimate).
By 2030, ASML targets €44–60 billion in revenue and gross margins of 56–60%.
This is not a conservative company. It is one utterly convinced that AI will rewrite the semiconductor industry’s landscape—and fully prepared to capture the lion’s share of the resulting opportunity.
Current market cap: $563.5 billion. Expected 2026 P/E: ~39x—centered within its historical 30–45x valuation band.
Yet this valuation may underestimate ASML’s true worth.
Why? Because two cycles are converging:
Short-term cycle (2026–2027): AI and memory demand explode. TSMC, SK Hynix, Samsung, and Micron expand aggressively—ASML order books overflow, driving robust revenue growth.
Medium-to-long-term cycle (2027–2030): High-NA EUV ramps meaningfully, lifting ASP from €200 million to €400 million—and pushing revenue to a new plateau.
With both cycles overlapping, ASML’s “super-cycle” could extend through 2030—or even longer.
The €13.2 billion quarterly order record is merely the beginning.
This feast has just commenced.
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