South Korea bought 45 cents of every euro ASML earned last quarter. Memory chipmakers — chiefly Samsung and SK Hynix — accounted for more than half the Dutch firm’s new lithography tool sales. And on Wednesday, Europe’s most valuable company raised its 2026 revenue forecast by up to €2 billion.

This is what “demand outpacing supply” looks like when you’re the only company on earth that makes the machines that make the chips.

ASML now expects 2026 net sales between €36 billion and €40 billion ($42–47 billion), up from prior guidance of €34–39 billion. Analysts had forecast €37.68 billion, per LSEG data. The direction matters more than the precision: upward, for a company whose order book is a proxy for the entire semiconductor industry’s capital expenditure plans.

Q1 told the same story in miniature. Net sales came in at €8.77 billion against an €8.5 billion consensus. Net income of €2.76 billion beat the €2.54 billion estimate. Gross margin hit 53%, at the high end of guidance.

CEO Christophe Fouquet didn’t hedge. “Demand for chips is outpacing supply,” he said in a statement accompanying results. “In response, our customers are accelerating their capacity expansion plans for 2026 and beyond, supported by long-term agreements with their customers.”

Read that twice. Fouquet’s customers — the chipmakers — are accelerating because their customers — the hyperscalers, the device manufacturers — have signed long-term contracts. This is committed capital flowing into committed orders for machines that cost roughly $300 million each.

The Memory Surge

The quarter’s most revealing number wasn’t at the top of the income statement.

Memory chips accounted for 51% of new tool sales in Q1, up from 30% in Q4 2025. South Korean customers represented 45% of all sales, compared with 23% from Taiwan. The driver: a persistent shortage of high-bandwidth memory used in AI data centers has pushed prices to unprecedented levels, according to CNBC, sending Samsung and SK Hynix scrambling for capacity.

TSMC, ASML’s largest single customer, reported record Q1 revenue last week on sustained AI chip demand — further evidence that the buildout is accelerating rather than plateauing.

One Chokepoint

ASML is the sole manufacturer of extreme ultraviolet (EUV) lithography machines, the equipment needed to etch the microscopic circuitry on the most advanced semiconductors. No ASML tools, no leading-edge chips. No leading-edge chips, no AI infrastructure boom.

The company expects to ship 60 of its flagship low-NA EUV tools in 2026 — 25% more than 2025 — and will have capacity for 80 in 2027, according to the company’s CFO. That capacity ramp is the real constraint on the industry: every hyperscaler breaking ground on a data center needs chips that can only be produced on machines that only one company builds.

Shares have risen 40% year to date, which is what happens when the market prices in a monopoly on a bottleneck.

The China Cloud

Sales to China fell to 19% of total revenue in Q1, down from 36% in Q4 2025. The country generated roughly a third of ASML’s revenue in 2025, but US-led export restrictions already block shipments of its most advanced systems. A bipartisan group of US lawmakers has introduced legislation that would extend the ban to less advanced deep ultraviolet machines as well, according to CNBC.

Fouquet said the guidance range was sized to accommodate “potential outcomes of ongoing discussions around export controls.” Translation: the band is wide enough to absorb a political shock.

There was also a wrinkle in the near term. ASML guided Q2 revenue of €8.4–9.0 billion, with the midpoint of €8.7 billion falling below analyst consensus of €9.04 billion, according to LSEG. Shares slipped on that detail even as the full-year upgrade dominated headlines.

Following the Money

ASML’s upgraded forecast is not a vague vote of confidence. It is a quantified signal from the narrowest point in the semiconductor supply chain. Chipmakers are accelerating orders. Their end customers are signing long-term contracts. Memory demand has surged to majority share of equipment sales.

The AI investment cycle is not cooling. It is compounding — and the receipts are all landing in Veldhoven.

Sources