ASML struggles with chip tool demand

ASML, the sole producer of cutting-edge lithography machines vital for advanced semiconductors, sees its outlook as an indicator of investment plans from major chipmakers like Taiwan Semiconductor Manufacturing Co, Samsung Electronics Co, and Intel Corp. The reported demand suggests a sustained period of high investment in AI infrastructure, pushing the need for more advanced chip production.

The company is exploring ways to increase capacity for 2028 beyond its previously communicated 30 percent rise, as customers are requesting more tools and expressing interest in placing orders for 2029 and 2030. This push for future orders underscores that the current demand surge is not seen as temporary by chipmakers.

ASML's efforts to reduce the cycle time between starting production and shipping a completed machine, alongside its expansion with a second industrial campus in the Netherlands, aim to address this rising demand. The company's advanced tools have a lead time of over a year, making current orders a forward-looking signal of chipmakers' strategic investments.