Key facts
- ASML is examining ways to produce more than 110 EUV chip-printing tools in 2028.
- JPMorgan analysts met with ASML's CFO and noted strong demand for EUV machines.
- ASML is nearly sold out of machines for 2027 and targets a 30% increase in 2028.
- The speed of EUV assembly is ASML's limiting factor, not the supply chain, according to JPM.
- Intel is expected to become a significant customer again in 2027.
- Adoption of next-generation High NA tools will begin in 2028.
ASML, the Dutch manufacturer of extreme ultraviolet (EUV) lithography machines, is exploring options to boost its production capacity beyond 110 units by 2028, driven by robust demand, particularly from the artificial intelligence sector. JPMorgan analysts, following a meeting with the company's CFO, indicated that ASML is nearly sold out of its machines for 2027 and is targeting a 30% increase in output for 2028.
According to JPMorgan, ASML's primary constraint is the speed of its EUV assembly process, rather than supply chain limitations. The firm's analysts have concluded that consensus earnings estimates for ASML are too low and require significant upgrades for 2027 and 2028. They identified four potential avenues for ASML to increase output: reducing manufacturing cycle times, repurposing research and development cleanroom space, diverting capacity from high-NA tools to low-NA units, and reactivating fast-shipment protocols. JPMorgan now believes ASML could deliver over 110 low-NA EUV tools without building new facilities.
Intel is anticipated to become a significant customer again in 2027, with other new customers, including Musk's Terafab, reportedly in development. The usage of EUV technology per chip, measured by "intensity," is also increasing in the current cycle. The adoption of next-generation High NA tools is expected to commence in 2028, with more substantial implementation over the following decade. Sales to Chinese memory chip manufacturers are projected to be stronger in 2027. ASML sees no need to pursue new light sources like the "FEL" favored by Musk, given advancements in laser technology.