Lithography Systems

UBS analyst Francois-Xavier Bouvignies maintained a constructive outlook on European semiconductor stocks heading into third-quarter 2026 earnings, naming ASML Holding NV, ASM International NV and STMicroelectronics NV as his top three picks in a September 29 research note. The investment bank raised its wafer-fab equipment forecast for 2026 through 2028, projecting total WFE reaching approximately $225 billion in 2027, up 43% year-over-year, with potential to climb toward $275 billion to $300 billion by 2028, and it keeps 2027-2028 earnings estimates more than 10% above consensus across the sector. ASML remains the top pick with a Buy rating and a €2,350 price target, and UBS expects the company to guide fiscal 2027 revenue growth above 30% year-over-year when it reports third-quarter results on October 14, with its third-quarter revenue estimate of €12.1 billion sitting 3% above consensus. ASM International is second, with UBS forecasting 36% revenue growth in fiscal 2027 versus consensus at 29% and 33% growth in 2028 versus consensus at 19%, translating to EPS estimates 10% above consensus in 2027 and 20% above in 2028 ahead of results due October 27. STMicroelectronics completes the top three with a Buy rating and €80 price target, as UBS sees 2027 EPS roughly 20% above consensus, silicon photonics revenues reaching about $2.0 billion in 2027 and $2.5 billion in 2028, and total datacenter revenues of approximately $2.5 billion, or about 14% of group sales, in 2027 rising to roughly $3.8 billion, or 19% of group sales, by 2028, with fourth-quarter revenue guidance expected up approximately 10% quarter-over-quarter when it reports on October 29.

Wells Fargo says semiconductor capital-equipment companies could be the biggest near-term beneficiaries of a potential TSMC expansion of 2-nanometer production. Analyst Joe Quatrochi wrote that reports of the possible capacity increase should be viewed as a potentially incremental positive opportunity for semi cap companies, though timing, size and node details are still unconfirmed. Building additional 2nm capacity would require significant spending on lithography, deposition, etching and inspection equipment, adding a layer of demand for suppliers supporting TSMC's fabs. Quatrochi pointed to the so-called Silicon Prairie as a logical location for a potential second U.S. campus, citing existing semiconductor operations in Texas from Texas Instruments, Samsung, Coherent and Terafab, plus TSMC's design service center in Austin. TSMC's major 2nm customers include Apple, Nvidia, AMD and Qualcomm, with Google, Broadcom, Marvell, Amazon and OpenAI also expected to use the advanced process.

Taiwan Semiconductor Manufacturing Co is accelerating its 2-nanometre capacity expansion, with monthly output projected to reach about 120,000 wafers by the end of 2026, ahead of earlier expectations of 90,000 to 100,000 wafers, according to Taiwanese publication EDN. Customers including Apple, Nvidia, AMD, Qualcomm and MediaTek have recently raised orders for TSMC's 2nm family capacity by 10% to 20%, the report said, citing industry sources. TSMC is bringing five 2nm fabs online this year, two in Hsinchu and three in Kaohsiung, according to senior vice president Hou Yung-ching. Hou said first-year 2nm wafer output would be 45% higher than the first-year output of 3nm in 2023, while 2nm capacity is expected to grow at a compound annual rate of 70% from 2026 to 2028.

Taiwan Semiconductor Manufacturing Company and ASML Holding announced a collaborative industry initiative on September 8 to transition the semiconductor sector to a 12-inch Extreme Ultraviolet photomask format, replacing the 6-inch masks chipmakers currently use for High NA EUV systems. The shift aims to boost scanner productivity, eliminate stitching constraints on ultra-large chips, and lower long-term advanced node manufacturing costs, with the initiative targeting a pilot line by 2031 and 12-inch High-NA production by 2033. TSMC plans to adopt High-NA EUV starting in 2030, with the 12-inch masks providing a multi-year roadmap for scaling complex AI architectures. For ASML, establishing a 12-inch standard locks in the long-term economic case for its High-NA scanner line, supporting its 15% revenue expansion outlook, while for TSMC the larger format helps defend its leading-edge and AI/HPC manufacturing dominance. The decade-long roadmap carries execution risk, as the entire global supply chain, from mask blanks and inspection equipment to automated handling, must retool from scratch, and TSMC faces near-term gross margin dilution from its N2 ramp and overseas fab expansions while ASML contends with gross margin pressure in late 2025 and geopolitical growth uncertainties through 2026.

ASML Holding won broader customer commitments for its roughly $400 million High-NA EUV machines, even as its U.S. shares fell about 1.8% to $1,713.41 in Thursday morning trading. Intel is already using High-NA in volume production on selected chip layers, Samsung plans to bring the technology into DRAM production in 2028, and TSMC targets advanced chip production from 2030. ASML says its EXE:5200B can print features 1.7 times smaller than its current NXE systems in a single exposure, potentially sparing customers costly manufacturing steps. The catch is price: chipmakers need enough output and yield gains to earn back the cost of each machine, and ASML needs those gains to turn early commitments into lasting demand. At $1,713.41, the shares sit 35.5% above the roughly $1,260 GF Value estimate, a premium that puts pressure on High-NA to deliver on the factory floor.

TSMC spent $15.59 billion on capital expenditure in its June 2026 quarter, its largest quarterly outlay in the past eight quarters and about 42% above the $10.98 billion spent in the prior quarter, as the company raised its 2026 capital budget for a third time this year, from $52 billion to $56 billion in January, to the high end of that range in April, and to $60 billion to $64 billion in July. On the Q2 2026 earnings call, CFO Wendell Huang guided third quarter gross margin down 170 basis points to 66%, citing 3 to 4 percentage points of dilution from the steep ramp of TSMC's 2 nanometer process, even as the June 2026 quarter's gross margin reached 67.72%, its highest in two years and consistent with the 67.7% figure cited by CEO C.C. Wei. Huang said TSMC generated about $24.5 billion in operating cash flow that quarter, enough to cover the $15.59 billion in CapEx and roughly $4.9 billion in dividends without new borrowing. TSMC is trading at 22.46 times forward normalized earnings, close to its 22.41 times two year average and well below the 29.65 times high in that range, after a mid September selloff tied to AI safety warnings from Anthropic's Dario Amodei and OpenAI's Sam Altman rather than anything specific to TSMC. Institutional 13F filings dated June 30, 2026 show a split Street, with Coatue raising its TSMC stake 7.6% to 9.3 million ADRs and Situational Awareness lifting its position to 2.6 million shares, while Lone Pine cut its stake 92.7%, SoftBank cut 71.5%, and Viking Global cut 29%.

Asset Plus Fund Management assesses that the rally in technology stocks and the massive investment in AI infrastructure still show no clear sign of entering bubble territory. Kamolyot Sukhumsuwan, Chief Investment Officer, said such concerns are reasonable given the rapid rise in share prices and the accelerating investment by hyperscalers in data centers, semiconductors, and artificial intelligence infrastructure, pushing capital expenditure budgets to record highs. However, any assessment should look at demand across the entire supply chain rather than share prices or the size of CapEx alone. Upstream, ASML reported sales of 9.3 billion euros, beating market expectations, and raised its full-year revenue target, with nearly all of its order book already secured for 2027. TSMC, meanwhile, posted revenue of 40.2 billion US dollars, up 33% from a year earlier, with its High Performance Computing business accounting for 66% of total revenue, and raised its 2026 capital expenditure budget to 60 to 64 billion US dollars. In memory, Micron said its HBM production capacity for 2026 is fully booked under long-term contracts, while SK Hynix has begun mass shipments of HBM4 and has long-term agreements with several customers. On the conversion of orders into revenue, NVIDIA reported revenue of 96.2 billion US dollars in its latest quarter, up 106% from a year earlier, with Data Center revenue at 89.0 billion US dollars, while Broadcom posted revenue of 29.6 billion US dollars, up 86%, with AI chip revenue up 221% to 16.7 billion US dollars. The key issue to watch next is how well this enormous wave of investment will generate adequate returns, since CapEx is starting to pressure cash flow and financing costs remain high. AI Infrastructure and AI Labs, which rely heavily on external funding, carry more risk than hyperscalers with strong financial positions. Asset Plus Fund Management still sees AI as a key long-term investment trend, but investors should focus on the quality of growth and choose companies that can sustainably turn AI opportunities into earnings.

ASML Holding shares gained approximately 1.0% to $1,696.12 as investors weighed the company's potential to assemble more than 110 EUV systems in 2028. Reuters reported that ASML is nearly sold out for 2027, when manufacturing capacity stands at at least 80 EUV machines, meaning pushing production beyond 110 systems in 2028 would require increasing annual output by at least 37.5% from that stated floor. The advanced-lithography equipment leader's second-quarter results included 9.33 billion of revenue, a 54% gross margin and 2.92 billion of net income, giving it room to invest in that expansion. At $1,696.12, ASML trades 33.98% above its GF Value estimate of roughly $1,270, showing how much future execution is already embedded in the stock. Every additional EUV machine can unlock more semiconductor-fab capacity for customers chasing advanced AI chips, but installation timing, customer acceptance and manufacturing precision all matter if ASML is to lift output without sacrificing margins or delivery quality.

MetaOptics Ltd has secured an investment facility of up to US$10 million from White Lion Capital LLC, its first U.S. institutional investor, under a warrant deed that allows the company to raise the funds through the issuance of up to 40,000,000 new ordinary shares upon exercise of the warrants at the holder's discretion. The Los Angeles-based private investment firm's participation extends MetaOptics' investor base beyond Asia into the U.S., its largest end market, one year after the company's listing on the Catalist board of the Singapore Exchange. Proceeds from the facility will fund the establishment of the Group's maiden front-end semiconductor fabrication line with 12-inch DUV immersion photolithography equipment in the U.S. for mass production of metalenses and modules, onshoring key design, manufacturing and testing capabilities closer to U.S. customers. MetaOptics is currently working with several U.S. foundries to integrate its metalenses into co-packaged optics designs, and its smallest CPO metalens measures 0.1 mm, a design that can be scaled to a 12-inch semiconductor photolithography process on glass substrates. Executive Chairman Thng Chong Kim said the funding allows the company to move faster on U.S. customer projects, while White Lion Senior Associate Gabriel Gumbiner said MetaOptics is one of the few companies in the world that can design, mass-produce and test glass-based metalenses at scale.

ASML Holding N.V. plans to work with major customers including Taiwan Semiconductor Manufacturing Company Limited, Nvidia, Intel, Samsung, and SK Hynix to adapt its next-generation High NA extreme ultraviolet lithography tools so they can print larger data-center chips, addressing a current limitation where the newer machines use a smaller mask than ASML's widely deployed standard EUV tools. ASML targets a pilot production line using the larger masks by 2031 and high-volume manufacturing readiness by 2033, with Chief technology officer Marco Pieters saying the changes could lift system productivity by roughly 40%. TSMC plans to introduce High NA EUV into advanced-node high-volume production from 2030, giving ASML greater visibility into future equipment demand. The larger-mask transition carries execution risks, as ASML must develop and qualify larger masks while TSMC must integrate the technology into high-volume manufacturing, and the benefits remain several years away from contributing to either company's financial results. Hedge fund ownership of ASML grew to 140 funds in the second quarter from 133 in the first, with combined position value rising to $21.77 billion from $16.38 billion, while TSMC's hedge fund ownership grew to 249 funds from 234.

KLA Corporation is benefiting from accelerating artificial intelligence infrastructure spending, which is driving higher investments in leading-edge foundry and logic technologies and boosting demand for its process-control solutions. In fiscal 2026, the Semiconductor Process Control segment's revenues increased 12% year over year, and overall fiscal 2026 revenues rose 12% year over year to $13.58 billion. During the fourth quarter of fiscal 2026, management raised its calendar 2026 wafer-fabrication equipment market estimate, including advanced packaging, to the low-$150 billion range, up from its previous $140 billion-plus view and approximately $120 billion in calendar 2025. KLAC expects second-half 2026 revenues to be approximately 20% higher than the first half, aided by high-performance computing, high-bandwidth memory, increasing extreme ultraviolet adoption in DRAM and advanced packaging technologies such as hybrid bonding, and said backlog was expected to reach about $12.5 billion. The company faces intensifying competition from Applied Materials, which expects its process diagnostics and control business to grow more than 50% in calendar 2026, and from ASML, which expects advanced foundry and logic revenues to rise about 25% in 2026 and extreme ultraviolet revenues to increase roughly 45%.

ASML Holding N.V. is riding strong momentum in its Installed Base Management business, which generated 2.8 billion euros in sales in the second quarter, up 31.8% year over year and about €300 million above management's expectations. The business benefits from the large and expanding fleet of ASML systems already operating at semiconductor manufacturers, and continued expansion of the EUV installed base is increasing the company's overall service opportunity. Demand is being driven not only by fleet expansion but also by software-led upgrades that improve productivity without significant machine time or production disruption. ASML expects to ship about 65 Low-NA EUV systems in 2026, with EUV revenue projected to rise roughly 45%, and management expects the combination of upgrade and service revenue to drive more than 30% growth in Installed Base Management sales in 2026. Sustaining that pace will depend on continued semiconductor investment and customer demand. Elsewhere in the semiconductor space, Monolithic Power Systems is gaining content across AI infrastructure and has extended its capacity goal beyond $6 billion, while Applied Materials delivered a record third quarter on the rapid global build-out of AI infrastructure.

Taiwan Semiconductor Manufacturing has moved its 2nm process into commercial production and raised its capital expenditure targets to support the rollout. The chipmaker said the higher spending is preparation for an intensifying global semiconductor arms race among leading foundries and chip designers. The accelerated 2nm commercialization keeps TSMC aligned with chip designers that need leading-edge capacity for AI and high-performance computing, and the bigger budget gives it more room to secure large multi-year supply commitments from major customers. One early indicator to watch is how quickly 2nm and related advanced nodes contribute a rising share of wafer revenue as new lines ramp up, including whether customer wins such as the MediaTek 2nm decision broaden into multiple large-volume programs that keep those advanced fabs near targeted utilization levels from 2026 onward.

Samsung Electronics agreed a new collaboration with Mistral AI to deploy advanced on-premises AI models in chip manufacturing, and expanded its partnership with ASML to include High NA EUV lithography for future memory and logic production lines. The company plans to use these AI and High NA EUV tools to support precision, security and efficiency in its semiconductor operations. Samsung runs a broad hardware and components portfolio across consumer devices, IT and mobile, and chipmaking, so tighter links with specialist AI model developers and lithography equipment suppliers speak directly to how its device solutions arm positions itself within global semiconductor supply chains. The move strengthens the Samsung Electronics Narrative catalyst around tight memory supply and HBM4E demand, while closer cooperation with ASML on High NA EUV and 12 inch photomasks leans into the heavy R&D and capex risk already flagged, since each new generation of tools can lift capital intensity and execution pressure in fabs. Investors should watch how Samsung describes AI enabled yield, defect detection and High NA EUV deployment progress in its next few quarterly disclosures, especially any 2027 to 2028 updates tied to planned High NA introduction in DRAM high volume manufacturing.

ASML and Taiwan Semiconductor Manufacturing both reported Q2 2026 results in mid-July, with ASML raising its full-year outlook on AI-driven lithography demand and TSMC lifting its capex plan while pushing 2nm into commercial production. ASML delivered $10.65 billion in revenue, up 21.3% year over year, with operating margin expanding to 37.1%, and memory-related system sales now expected to grow over 75% this year. TSMC's revenue hit $40.20 billion, up 36.0%, with gross margin at 67.7%, as HPC drove 66% of revenue and advanced nodes at 7nm and below made up 77% of wafer revenue. TSMC raised its 2026 capital budget to $60 billion to $64 billion and announced another $100 billion Arizona investment, capital that ASML will help spend. ASML is close to being fully covered with low-NA EUV orders for 2027 and is studying a further 30% capacity expansion for 2028, with CEO Christophe Fouquet saying, "We're not waiting. We're preempting."

ASML Holding N.V. is examining ways to produce more than 110 EUV lithography systems in 2028, according to JPMorgan analysts following a meeting with CFO Roger Dassen. The company is already nearly sold out for 2027 and expects to produce at least 80 EUV systems that year, so output above 110 in 2028 would represent at least a 37.5% increase from the 2027 level. JPMorgan said the main constraint has shifted toward assembly speed rather than the availability of critical components, suggesting ASML believes additional capacity can be unlocked through manufacturing and assembly improvements. The potential increase is being driven primarily by AI-related demand, with ASML's existing EUV machines, which cost roughly $200 million each, essential for manufacturing leading-edge AI processors, while customers including TSMC, Samsung, SK Hynix and Intel are expanding advanced-chip capacity. Reuters reported separately that virtually all of ASML's EUV production capacity is booked through 2027, while the company has begun construction of a new Eindhoven facility designed to accelerate tool assembly and eventually accommodate up to 20,000 workers.

Bank of America raised its growth forecast for the US semiconductor industry, projecting an 18% compound annual growth rate between 2026 and 2030, up from its previous estimate of 14%. The bank attributed the revision primarily to higher expectations for memory chips and server-related components, and now forecasts the industry's total addressable market will reach $3.2 trillion by 2030, up from its previous estimate of $2.7 trillion. BofA said the industry took approximately 50 years to reach $1 trillion in sales but could double its current estimated market size of $1.7 trillion within four years, citing customer orders and capacity commitments across the data-centre and AI sectors. Separately, the bank raised its forecasts for the wafer fabrication equipment market, expecting spending to reach $156 billion in 2026, a 33% increase from the prior year, and $210 billion in 2027, representing projected annual growth of 34%, with the revisions reflecting higher expected spending on memory manufacturing equipment, particularly for DRAM production. BofA forecasts DRAM equipment spending of $61 billion in 2026 and $85 billion in 2027, and estimates the overall wafer fabrication equipment market could reach $360 billion by 2030, a compound annual growth rate of approximately 23% between 2026 and 2030.

Bernstein analyst Stacy Rasgon reiterated a Buy rating on ASML and raised his price target from $2,623 to $2,859, a Street high implying roughly 70% upside from the stock's current $1,698.30, after shares fell 6.17% over the past month. The consensus target across 43 covering analysts sits at $2,157.87, about 27% above spot, with ratings of 6 Strong Buy, 32 Buy, 4 Hold and 1 Sell. The decline came despite Q2 revenue of $10.65 billion, up 21.3% year over year, and a raised full-year 2026 guidance of €43 billion to €45 billion, with selling attributed to US and Dutch export controls that have China guided to about 20% of 2026 revenue and to a rotation out of semiconductor equipment names. Rasgon's thesis rests on ASML's EUV and High-NA EUV monopoly, tools running over $350 million per unit, an AI capex supercycle that has management planning to add 30% to 2026 low-NA EUV capacity for 2027, and a 2026 gross margin guided to 54% to 56%. Memory-related net system sales are guided to grow over 75% in 2026, and the 2027 EPS consensus has climbed from $41.49 to $51.72 over ninety days on 28 upward revisions and none down. Among peers, Applied Materials fell 16.63% over the past month to $456.49 against a consensus target of $640.89, Lam Research slipped 8.55% to $298.22 against $373.13, and KLA dropped 13.16% to $180.64 against $233.77.

Piper Sandler initiated coverage on Intel Corporation with a Neutral rating and a $110 price target on September 9, with analyst David O'Connor arguing that Agentic AI workloads are driving demand for Intel's server CPUs while supply remains limited. O'Connor expects that supply-demand imbalance to persist until around 2029-2030, a favorable backdrop for whoever holds capacity, and Piper estimates Intel's Data Center Group could deliver a high-teens revenue CAGR through 2030, enough to more than offset softness in PC and memory. Intel's Data Center and AI Segment posted $6.3 billion in revenue in the second quarter of 2026, up 59% year-over-year. Piper said Intel's current share price already discounts roughly 15% of the foundry gains, a level representing an estimated one full fab module known as Fab-62 and accounting for 45% of the share price, meaning investors are already paying for a meaningful manufacturing recovery. The firm also noted upside in customer evaluations for 14A manufacturing and a recent milestone in which Intel Foundry became the first to run high-volume production using ASML's newest High-NA EUV lithography tools, while 138 hedge funds held the stock at the end of the quarter, up from 112 in the prior quarter, and short interest stood at 2.9% of the public float as of August 31, 2026.

Taiwan Semiconductor Manufacturing is trading at $428.29 against a 24/7 Wall St. price target of $492.37, implying 14.96% upside on a buy rating with 90% confidence. The call rests on record August 2026 revenue that surged 53.3% year over year, with January-through-August revenue up 39.3%, prompting management to raise full-year 2026 revenue guidance to slightly above 40% USD growth. Q2 2026 delivered EPS of $4.31 against a $3.8866 estimate, revenue of $40.20 billion, up 36.05% year over year, and a 67.7% gross margin, while Q3 revenue is guided to $44.6 billion to $45.8 billion and the 2026 capital budget was raised to $60 billion to $64 billion. The bull case leans on demand from Nvidia, whose Q3 guide of $108 billion, and Broadcom, whose Q3 FY26 AI semiconductor revenue reached $16.7 billion, up 221% year over year, effectively lock in TSMC's advanced-node order book, while Intel Foundry lost $2.1 billion in its latest quarter. The main near-term risk is gross-margin compression, with the 2nm ramp expected to dilute gross margin by 3 to 4 percentage points and overseas fabs adding another 2 to 3 points of drag, alongside Taiwan-Strait geopolitics as an unpriced tail risk; the bear-case one-year price is $413.79 against a bull case of $525.08 and a sell-side consensus target of $552.38.

Applied Materials CEO Gary Dickerson told David Faber at Goldman's Copia Conference that the company is approaching 40% growth this year, driven entirely by AI compute demand, and he expects strong growth in 2026, 2027 and beyond, backed by rolling eight-quarter customer forecasts and longer tool-shipment commitments. The August quarter delivered revenue of $9.12 billion, up 24.8% year over year, with non-GAAP EPS of $3.50, and guidance for the October quarter calls for revenue near $10.25 billion; CFO Brice Hill said customer visibility extends in some conversations to 2030 and the company is preparing to double its quarterly system output by 2028. Dickerson said DRAM revenue grew from 22% to 26% of semiconductor systems revenue, with DRAM including HBM packaging up 52% year over year to record levels, while advanced packaging is expected to grow more than 70% in calendar 2026. Peer results corroborate the order book: Lam Research reported June-quarter revenue of $6.72 billion, up 30.0% year over year, and raised its calendar 2026 WFE view to the low $150 billion range from $140 billion; KLA posted record revenue of $3.66 billion with remaining performance obligations around $12.5 billion; and ASML plans to add 30% to its 2026 low NA EUV capacity of around 65 for 2027, with another 30% under investigation for 2028. Applied trades at a trailing P/E of 41x and forward P/E of 26x at a current price of $468.85, up 188.38% over the past year but down 10.11% over the past month and below its 52-week high of $738.88, with the 200-day moving average at $407.06.

Global wafer-fabrication-equipment spending is projected to rise 16.9% to a record $135.2 billion in 2026, up from $115.7 billion in 2025, with memory equipment growing faster than the broader market. Within that total, 300mm DRAM equipment spending is projected to rise 29% to $37 billion and 300mm 3D NAND equipment spending is expected to increase 28% to $14 billion, while logic, foundry and other equipment spending remains the largest category at approximately $84.2 billion but grows just 10.6%. The combined $51 billion of DRAM and NAND equipment spending is being driven by Samsung Electronics, Micron Technology and SK hynix simultaneously expanding investment in advanced DRAM, high-bandwidth memory, NAND, cleanrooms and advanced packaging. Lam Research, the most direct beneficiary, reported record June-quarter revenue of $6.72 billion and fiscal 2026 revenue of approximately $23.23 billion, up from $18.44 billion in fiscal 2025, and recently raised its quarterly dividend 27% from $0.26 to $0.33 per share. KLA reported fiscal fourth-quarter revenue of $3.66 billion, up approximately 15% year over year, with fiscal 2026 revenue of $13.58 billion and GAAP net income of $4.83 billion, while ASML reported second-quarter 2026 net sales of €9.3 billion, a 54% gross margin and net income of €2.9 billion, and raised its expected 2026 net sales range to between €43 billion and €45 billion. The principal industry risk remains eventual memory overinvestment, though current investment is concentrated on advanced products, cleanrooms and process migrations.

ASML Holding NV is expanding its High-NA EUV customer collaborations with Samsung Electronics and Intel as AI-related chip demand raises manufacturing complexity. On Tuesday, ASML expanded its long-standing partnership with Samsung around High-NA EUV and advanced semiconductor manufacturing, and that same day extended its collaboration with Intel on future scaling needs, including larger-format masks. Intel has already moved High-NA into production, helping Intel Foundry in Panther Lake production and qualifying the technology on select 18A product layers, which ASML's second-quarter presentation described as a new readiness milestone. Samsung is joining an industry initiative to develop a 12-inch photomask platform for High-NA EUV and plans to introduce ASML's High-NA technology into future DRAM high-volume manufacturing by 2028. In the first quarter of 2026, the High-NA platform had processed more than 0.5 million wafers and achieved availability above 80%, while ASML expects advanced foundry Logic revenue to rise about 25% in 2026, Memory revenue to increase 75% and EUV revenue to grow about 45%. Management still expects discussions with all customers on exactly how and when High-NA will enter high-volume manufacturing, leaving the pace of wider adoption dependent on customer qualification and manufacturing decisions.

ASML Holding NV raised its 2026 net sales guidance to €43-€45 billion and gross margin guidance to 54-56%, citing accelerating AI-related spending across advanced Logic and Memory manufacturing. Management expects advanced foundry Logic revenue to increase about 25% in 2026, Memory revenue to rise 75% and extreme ultraviolet revenue to grow about 45%. By the second quarter, ASML was close to receiving all EUV orders needed for 2027 and had already received many for 2028, and it plans to increase 2027 low numerical aperture EUV capacity about 30% from roughly 65 systems in 2026, with deep ultraviolet immersion capacity following the same 30% expansion path from about 130 systems. Second-quarter operating cash flow reached €1.70 billion and free cash flow was €1.32 billion, while ASML repurchased about €1.1 billion of shares. The stock trades at 31.5X forward 12-month earnings versus 23.7X for its industry, 20.7X for the sector and 20.0X for the S&P 500, and ASML carries a Zacks Rank #3 (Hold).

Taiwan Semiconductor Manufacturing Company, or TSMC, is teaming up with ASML Holding N.V. to advance the semiconductor industry's shift toward larger-format extreme ultraviolet photomasks. The companies established the industrywide initiative on Sept. 7, ahead of the annual SPIE BACUS Conference in Monterey, CA, aiming to establish a 12-inch mask pilot line by 2031 and pave the way for 12-inch High-NA lithography systems to enter advanced-node production by 2033. While High Numerical Aperture EUV will initially be adopted for production using the current 6-inch masks, the transition to larger 12-inch masks is expected to boost fab productivity, lower chipmaking costs and eliminate stitching constraints across the semiconductor industry. TSMC plans to use ASML's High-NA technology in high-volume manufacturing for advanced nodes starting in 2030, and expects more layers to require High NA EUV as nodes advance, primarily because of increasingly complex transistor architectures needed for AI applications. Separately, Intel Foundry and ASML said High NA is now being used in high-volume manufacturing, with more than one million wafers processed to date across early tool certification and testing, research and development, and volume production on select layers for a subset of Intel Core Ultra Series 3 processors, code-named Panther Lake.

Taiwan Semiconductor Manufacturing Co. reported August revenue of NT$514.8 billion, or $16.3 billion, up 53.3% from a year earlier, though its shares slipped 0.40% premarket. Analysts expect 46.8% growth for the quarter as a whole, and the company guides to full-year sales growth slightly above 40% in dollar terms. TSMC is trying to build and equip roughly 20 factories at home and abroad, against a previous record of four or five simultaneously, with deputy co-chief operating officer Cliff Hou saying chipmaking tool requirements have nearly doubled since the end of last year. Capital expenditure is set for a record $60 billion to $64 billion in 2026, raised in July alongside revenue projections. TSMC also agreed this week to deploy ASML's High NA extreme ultraviolet machines in mass production from 2030, reversing a position it had held repeatedly on cost grounds, with the systems running up to $400 million each. Shares are up about 40% this year.

Intel and ASML have announced that more than one million wafers have been processed using High-NA EUV lithography, marking a significant step toward commercial manufacturing. The technology is being used for select layers of Intel's Core Ultra Series 3 processors, code-named Panther Lake, produced on Intel 18A, and the companies report that performance meets or exceeds comparable layers patterned using the NXE platform. ASML plans to pilot larger-format masks by 2031 and have the technology ready for high-volume production by 2033, with collaboration from major customers like TSMC and Samsung. Intel's Q2 2026 report revealed a revenue of $16.1 billion, a 25% increase year-over-year, but its foundry business still posted an operating loss of $2.1 billion, with only $293 million of quarterly revenue from external customers. While the milestone boosts confidence in High-NA adoption, Intel must prove it can convert manufacturing progress into profitable external foundry business, and ASML faces the challenge of broader customer adoption over time.

Xanadu Quantum Technologies and ASML have announced a collaboration to develop advanced lithography processes for Xanadu's photonic quantum hardware, aiming to reduce optical losses in quantum computing chips and accelerate the path to utility-scale quantum computing. The partnership will explore how lithography innovations can improve patterning control and lower-loss photonic structures, addressing the technical challenge of optical loss influenced by line edge roughness. Xanadu's CEO, Dr. Christian Weedbrook, emphasized the importance of fault tolerance and error correction, while ASML's Stan Baron expressed enthusiasm for supporting next-generation photonics applications. This collaboration marks a significant step for Xanadu in advancing its photonic quantum technology and solidifying its position in the semiconductor and quantum computing ecosystem.

Bank of America sees a more important signal in ASML Holdings' customer commitments than a burst of equipment orders, as Taiwan Semiconductor Manufacturing, Intel, and Samsung Electronics align on the same High-NA lithography roadmap. Analyst Didier Scemama said the announcements are consistent with the bank's High-NA adoption assumptions, which call for five tools in 2026, six in 2027, and 20 by 2030, and he maintained a Buy rating with a 2,452 price target. The commitments from three major chipmakers suggest the ecosystem for High-NA machines is forming, reducing uncertainty around ASML's next growth engine. Intel's production experience shows High-NA can work with existing mask formats, while the TSMC-ASML-Samsung initiative targets 12-inch photomasks with a pilot line by 2031 and production readiness by 2033. The bank notes the announcements do not alter its forecasts, but strategically they lower adoption risk and support ASML's pricing power and demand visibility through the next decade.

ASML Holding gained about 2% on Tuesday as investors assessed progress by major chipmakers toward adopting its newest High-NA extreme ultraviolet lithography systems. Samsung Electronics, Taiwan Semiconductor Manufacturing, and Intel are moving forward with plans to use the advanced equipment, and are also working with ASML on a shift from six-inch photomasks to a 12-inch format. ASML said the larger masks could raise High-NA system throughput by as much as 40%, helping chip manufacturers improve production efficiency as demand for processors used in artificial intelligence applications expands. The companies are also taking a longer-term approach: Taiwan Semiconductor Manufacturing and ASML plan to establish a 12-inch mask test line by 2031, with commercial manufacturing targeted for 2033. ASML Chief Technology Officer Marco Pieters said the larger mask format could support higher productivity from High-NA equipment, with Intel and Samsung Electronics also participating in the development effort.

ASML Holding broke ground Tuesday on a 35-hectare campus in Eindhoven designed to relieve its increasingly tight EUV production pipeline, with the stock climbing about 2% to $1,751.66. The first opening is slated for 2029, accommodating at least 3,000 employees, and the fully developed site could eventually provide 20,000 workplaces across 350,000 square meters. The centerpiece is a new flow factory that will consolidate TWINSCAN materials, manufacturing, and installation operations under one roof. ASML shipped 86 new lithography systems in the second quarter, a 28.4% jump from the first quarter, and management targets a 30% increase in low-NA EUV capacity for 2027. However, the campus will not open soon enough to solve today's bottleneck, as existing plants and suppliers must carry three more years of customer commitments.

Intel Corporation crossed the one-million-wafer milestone using high-numerical-aperture extreme-ultraviolet technology, sending shares up about 7.6% to $103.07 and adding roughly $37 billion in market value. The company and ASML also proved that reticle stitching can pair High-NA equipment with existing six-inch masks, potentially sparing chip designers from an expensive redesign. Intel said certain Intel 18A layers manufactured with High-NA delivered performance matching or beating equivalent layers made with conventional EUV systems, and the technology has moved into limited Panther Lake production. Intel's latest quarter produced $16.1 billion in revenue alongside approximately $8.4 billion of negative adjusted free cash flow. GuruFocus places GF Value at $31.96, leaving the $103.07 share price 222.5% above that estimate, highlighting the challenge of justifying the premium with profitable outside foundry contracts.

Intel shares climbed 5% to $101 after Intel Foundry and ASML confirmed that more than one million wafers have been processed on High-NA EUV equipment, including production layers of Intel's Core Ultra processors code-named Panther Lake, a milestone that puts Intel years ahead of rivals. ASML rose 3% to $1,773, and Taiwan Semiconductor Manufacturing gained 3% to $438, both benefiting from AI-driven demand. Samsung plans to adopt High-NA EUV for DRAM by 2028, and TSMC for advanced nodes by 2030, while Intel's Q2 2026 revenue rose 25.4% to $16.13 billion, its strongest growth in 15 years. ASML raised its full-year 2026 sales outlook to between €43 billion and €45 billion, and Intel Foundry booked $5.765 billion in Q2 revenue, up 31% year over year, despite a $2.1 billion operating loss. A separate factor was President Trump's social media post claiming stock gains, which may have influenced flows, but analysts caution that Intel's 172% year-to-date gain already reflects heavy optimism.

ASML Holding NV rose 2.91% in premarket trading after Taiwan Semiconductor Manufacturing Co. and Samsung Electronics committed to its High NA EUV lithography systems, which cost about $400 million each. TSMC, which had previously been cautious about the cost, will begin using the systems in 2030, while Samsung will start in 2028 for memory production, joining Intel Corp. TSMC alone accounts for roughly 16% of ASML's revenue, according to Bloomberg data. The companies also agreed to shift photomasks from the 6-inch standard to 12-inch versions, a change that ASML's chief technology officer Marco Pieters said could boost High NA throughput by 40%. TSMC and ASML plan a test line for 12-inch masks by 2031, with production use on High NA tools by 2033.

ASML Holding announced that Samsung Electronics, Taiwan Semiconductor Manufacturing, and Intel are moving forward with its latest High-NA extreme ultraviolet lithography equipment, strengthening the outlook for next-generation AI chips. Samsung plans to begin using High-NA systems for computer memory by 2028, while TSMC will adopt the technology from 2030, and Intel Foundry continues to use it in high-volume manufacturing. The companies are also collaborating with ASML on a shift from 6-inch to 12-inch photomasks, which could improve productivity and lower costs. ASML's chief technology officer, Marco Pieters, said the larger masks could increase High-NA machine throughput by 40 percent. TSMC's adoption is particularly significant as it accounts for about 16 percent of ASML's revenue, according to Bloomberg data.