ASML faces AI demand surge and China export curbs ahead of earnings

ASML goes into its earnings report with a market value around €610 billion and a share price that has climbed nearly 70% this year. The Veldhoven, Netherlands, company is Europe’s most valuable listed firm, and investors are watching whether its machine capacity can keep up with demand while Washington pushes new limits on China sales.

ASML reported net sales of €8.8 billion, gross margin of 53.0% and net income of €2.8 billion in its first-quarter 2026 results, then raised its full-year 2026 revenue guidance to €36 billion to €40 billion while keeping gross margin guidance at 51% to 53%. It also told investors to expect second-quarter sales of €8.4 billion to €9.0 billion. Christophe Fouquet said, “Demand for chips is outpacing supply,” and added that customers are accelerating capacity expansion plans for 2026 and beyond.

Its extreme ultraviolet, or EUV, lithography machines are the enormous systems used to print the tiniest circuitry on advanced semiconductors, and building them takes months, not days. ASML is speeding assembly, upgrading older tools and shortening installation times to avoid the bottleneck the industry saw during the pandemic. Demand is coming from major buyers such as TSMC, which makes Nvidia’s chips, while Intel’s turnaround and Elon Musk’s TeraFab plans add more pressure on the supply chain.

ASML made €32.7 billion in net sales in 2025, and China accounted for about 33% of revenue that year, even though the company had previously expected China to be closer to 20% of 2025 sales after export restrictions. ASML does not sell its most advanced EUV systems to China, but China can still account for as much as 20% of 2026 sales through legal purchases of less advanced DUV tools. A proposed U.S. law would require allies to align with export controls aimed at limiting China’s advanced chipmaking, and ASML is named in that legislation.

On May 16, ASML announced a strategic partnership with Tata Electronics to help advance India’s semiconductor manufacturing ecosystem.