ASML Holding N.V.
Sole EUV lithography supplier capturing semiconductor scaling through monopoly pricing and installed-base services, not volume production.
Business Overview
ASML is the sole maker of EUV lithography systems (plus DUV), sold to foundries and memory makers at €150M+ per EUV scanner. Q1 2026: net sales €8.8B, 53% gross margin, net income €2.8B; memory rose to 51% of system sales as AI capex lands.
Revenue Model
ASML sells lithography systems — DUV in the tens of millions, EUV over €150M, High-NA €350M+ — then multi-year service and upgrade contracts on the installed base. Fab-roadmap commitments and high switching costs lock in recurring revenue.
Key Metrics
- Gross Margin
- 53.0%
- Order Backlog
- ~€39B
- China Sales Mix
- 19%
- EUV Share of Sales
- 66%
Breakdowns
Revenue Composition: Equipment vs. Services (Q1 2026)
Product Mix: EUV vs. DUV Units Sold (Q1 2026)
Competitive Moat
ASML is the only maker of commercial EUV scanners, backed by a ~€39B backlog and exclusive Zeiss/Cymer partnerships. Nikon and Canon are DUV-only — zero share of leading-edge patterning.
Competitive Landscape
Nikon Corporation
Dominant in mature-node DUV; absent from EUV market entirely. Cannot compete for leading-edge logic or advanced memory layers—structural disadvantage.
Canon Inc.
Sells mature-node steppers and is developing nanoimprint lithography as an EUV alternative, but has no leading-edge or EUV presence.
Growth Drivers
EUV 66%
AI leading-edge demand
AI capex lifted EUV to 66% of Q1 system sales (€4.1B of €6.3B); order intake described as very strong.
High-NA EUV ramp
Next-gen High-NA (€350M+ systems) scales toward 2nm logic and advanced DRAM, extending the roadmap and pricing.
€2.5B Q1
Installed Base services
Service and field-upgrade sales grew to €2.5B, a recurring, higher-visibility stream that outpaces equipment.
Risk Factors
~19% China
Export control restrictions
China fell to 19% of Q1 2026 system sales (from 36% the prior quarter); 2026 guidance explicitly hedges ongoing export-control discussions.
Supply-chain bottlenecks
EUV optics, light sources and long-lead components face capacity constraints; manufacturing ramp may not meet demand.
High-NA execution delays
Pellicle robustness, resist stochastic defects and source power scaling could defer node transitions and customer ROI realization.
Key Developments
April 2026
Q1 2026: net sales €8.8B, 53% gross margin, net income €2.8B (EPS €7.2); EUV was 66% of system sales as AI demand lifted leading-edge orders.
Raised FY2026 revenue guidance to €36–40B (from €34–39B); paid the €7.5 2025 dividend (+17%) and repurchased €1.1B of stock.
Investor Takeaway
ASML shows how a monopoly on critical infrastructure compounds: customers cannot switch or delay upgrades, so they fund ASML's roadmap through service contracts. Its 2030 model — €44–60B revenue at 56–60% margin, from ~€33B today — frames the runway.