22OCT

ASML says it cannot meet 2027-28 demand

3 min read

19:10UTC

ASML sold 113 lithography systems in the third quarter on record sales of €11.66bn, and its chief executive warned that planned supply will fall short in 2027 and 2028.

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Key takeaway

ASML's lithography output is sold out through 2028, and allocation rests with ASML and licensing states.

ASML, the Dutch company that alone makes the machines that print the most advanced chips, reported record third-quarter net sales of €11.66bn on 14 October⁠¹. It sold 113 new lithography (chip-printing) systems, up from 86 in the second quarter, and narrowed full-year guidance to €44-45bn from the €43-45bn range it set in July.

Chief executive Christophe Fouquet said ASML now expects "that our supply as currently planned for both 2027 and 2028 will not fully meet the demand of our customers"⁠². The company plans about 30% more capacity in 2027 for its standard extreme ultraviolet (EUV) machines, which the most advanced chips need, and its older deep ultraviolet (DUV) immersion machines. For 2028 it is studying capacity beyond that increase, and some customers want to book for 2029 and 2030. The squeeze arrives a month after ASML and Intel Foundry moved the next-generation High-NA EUV tools into volume production.

China took 23% of system sales in the quarter, up from 14%, according to the South China Morning Post, which put ASML's system sales to China up 109% on the quarter as memory makers stockpiled⁠³. ASML's own release mentions export controls only in its standard risk factors.

With output booked out two years ahead, the choice of which customers get the 2027 tools, and in which countries, rests with ASML under Dutch and US export licensing. No EU institution has a hand in that allocation.

Deep Analysis

In plain English

ASML is a Dutch company. It is the only firm in the world that makes the machines used to print the most advanced computer chips, using a kind of light called extreme ultraviolet (EUV). Every large chipmaker, from Taiwan to the US to China, buys from it. ASML has now said it will not be able to build enough machines to meet orders in 2027 and 2028. That matters because chips sit inside phones, cars and AI systems. If the machines are scarce, the factories that make chips cannot grow as fast as buyers want.

Deep Analysis

Root Causes

ASML's capacity cannot rise quickly because each EUV machine depends on a narrow chain of sub-suppliers, from optics to light sources, that took decades to build. A 30% step in one year is close to the limit of what that chain can absorb.

Demand is being pulled forward by two forces at once: AI data-centre chips need the newest nodes, and Chinese buyers are ordering older DUV tools before any further controls bite.

The guidance range narrowed rather than rose because supply, not orders, now sets ASML's revenue ceiling.

What could happen next?

Consequence
New European fabs that have not yet booked ASML tools may face delays to 2028 or later.
Medium term · Suggested
Risk
A higher China share could renew US pressure on The Hague to widen servicing and sales limits.
Short term · Suggested
Opportunity
ASML's sub-suppliers in the Netherlands and Germany stand to gain from the planned 2027 capacity increase.
Medium term · Assessed

Source Landscape

This story draws on mixed-leaning sources from Hong Kong SAR China

Hong Kong SAR China

LeftRight

Primary parallel: In 2023 and 2024 TSMC's advanced packaging capacity, known as CoWoS, was sold out, and its allocation shaped which AI chip designers could ship. A single supplier's capacity plan became the effective ceiling on an entire industry's output.

Counter-parallel: In 2019 the Dutch government let ASML's export licence for an EUV machine bound for China's SMIC lapse after US pressure. There, a state decided who received the tool; with a sold-out order book, ASML's own allocation now does much of the same work.

Third-quarter sales of €11.66bn sit about a third above the €8.8bn ASML booked in the first quarter. China's share has swung from 36% at the end of 2025 to 19% in the first quarter and back to 23% now, per company and SCMP figures.

ASML now holds the pricing power. A supplier that is sold out two years ahead can choose its customers and its terms, which raises the cost of entry for any new European fab that has not already reserved tools.

Consensus view: The South China Morning Post ties the jump in China's share, from 14% to 23% of system sales, to Chinese memory makers stockpiling tools ahead of tighter limits. On that reading the quarter's record partly reflects buyers front-loading orders on top of long-run demand.

Counter-view: Beijing frames chip trade with the Netherlands as a matter for negotiation.

China's Commerce Ministry spokesperson He Yadong said in July that the two governments should let firms settle the Nexperia dispute through consultation, while the US MATCH Act would let Washington decide what ASML may sell or service in China.

Key tension: Whether ASML's 2027-28 shortfall gives The Hague bargaining power over allocation, or whether US licensing rules take that choice away from the Netherlands altogether.

Sources:ASML·South China Morning Post

Mentions:ASML →Christophe Fouquet →China →DUV lithography →Netherlands →South China Morning Post →Taiwan →Nexperia →Washington →Intel →MATCH Act →Beijing →TSMC →The Hague →

First Reported In

Update #17 · EU questions AI labs over loss of control

ASML· 22 Oct 2026

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Causes and effects

Caused by

ASML booms, Europe's fab gap holds

ASML narrowed the €43-45bn full-year guidance it set in July to €44-45bn.

Occurred 15 Jul 2026

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This Event

ASML says it cannot meet 2027-28 demand

Europe's only chokepoint supplier in chipmaking is booked out two years ahead, and the allocation of its machines sits outside any EU institution's control.

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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.