Dutch semiconductor equipment manufacturer ASML delivered robust first-quarter results that exceeded expectations, prompting the company to raise its 2026 guidance. According to reports from CNBC TV18, net sales jumped to €8.8 billion ($10.4 billion) compared to the anticipated €8.5 billion, while net profit rose to €2.8 billion versus the expected €2.5 billion. The company had previously projected first-quarter sales would range from €8.2 billion to €8.9 billion, demonstrating strong performance against internal estimates. ASML reported first-quarter revenue of €8.77 billion, placing it at the higher end of previous guidance and representing a notable increase from the €7.8 billion recorded during the same period in 2025. As per Reuters, shares were little changed on Wednesday, having already gained nearly 7% in the run-up to the results and 31% since the start of the year.
Building on the strong Q1 performance, ASML significantly increased its 2026 sales target from an earlier estimate of €34 billion to €39 billion to a new range of €36 billion to €40 billion. As reported by CNBC TV18, this revision reflects the sustained demand for AI-related semiconductor equipment, with the company benefiting from the ongoing growth in AI chip manufacturing. According to ASML's CEO Christophe Fouquet, "Demand for chips is outpacing supply. In response, our customers are accelerating their capacity expansion plans for 2026 and beyond." The increased guidance comes as Taiwan Semiconductor Manufacturing Co. (TSMC), one of ASML's largest clients, announced record first-quarter sales last week amid the expanding AI chip market. ASML guided second-quarter revenue of between €8.4 billion and €9.0 billion for the upcoming quarter. Analysts forecast the figure at €37.7 billion, according to LSEG data, suggesting the company's revised guidance aligns closely with market expectations.
Memory chips emerged as a key growth driver for ASML's first quarter, accounting for 51% of net sales from new tools compared to just 30% in the prior quarter. According to CNBC TV18, memory chip prices have reached unprecedented heights due to persistent shortages, with data centers and AI systems heavily dependent on memory components. This surge in demand has prompted Samsung and SK Hynix, two South Korean companies, to increase production capacity, necessitating ASML's equipment for memory chip manufacturing. ASML reported that South Korea has emerged as the company's largest market this quarter, accounting for 45% of system sales as manufacturers there ramp up production for AI-related memory chips. The company's total revenue for the quarter reached €8.77 billion, which ASML described as the high end of its prior guidance range.
Addressing concerns about ASML's ability to keep up with unprecedented demand, the company's CFO announced significant capacity expansion plans. According to CNA, ASML should be able to ship 60 of its flagship low-NA EUV tools in 2026 - 25% more than in 2025 - and will have capacity to ship 80 in 2027. These EUV tools are critical for advanced chip manufacturing, with each machine costing $300 million and being essential for creating the tiny circuitry of advanced chips. ASML is the only maker of these EUV tools, positioning it as a key supplier to major chipmakers such as TSMC, which produces processors for Nvidia and Apple. Investors view ASML as a key "picks-and-shovels" play on AI, as it supplies equipment to companies at the center of the artificial intelligence boom.
The company's regional sales composition showed notable changes in the first quarter, with Taiwanese consumers contributing 23% of sales while South Korean consumers accounted for 45%. As reported by CNBC TV18, this shift reflects the geographic distribution of memory chip manufacturing demand. However, ASML faces challenges in China, where export regulations prevent shipment of its most advanced machinery, with a bipartisan group of US lawmakers filing legislation that would prohibit shipment of even less sophisticated machines to China. The company is caught between Washington and Beijing in an escalating technology dispute, with the United States pressing to restrict exports of advanced chipmaking equipment to China over national security concerns.
