Artificial intelligence: here are ASML’s latest moves in chip manufacturing

Yes, innovation. In order to understand the company’s strategy, we must first recall the group’s corporate purpose. The hi-tech giant is essentially active in the field of lithography equipment. In very simple terms, this involves ‘transferring’ the integrated circuit design onto a silicon wafer using specialised light beams. A process which, broadly speaking, is divided by ASML into two areas: Deep Ultraviolet Lithography (DUV) and Extreme Ultraviolet Lithography (EUV). In the first case, we are dealing with a more traditional approach – based, for example, on an ultraviolet wavelength of 193 nanometres (nm) – rather than cutting-edge technology. EUV, on the other hand – utilising a much shorter wavelength (13.5 nm) – is suited to supporting more ‘advanced’ technological production (the manufacture of chips with gate sizes as small as 2 nm).

That said, the multinational’s plan is structured across five different areas. Firstly, there is a commitment to continue leveraging the EUV machine family (38 per cent of total revenue in the third quarter of 2025). Specifically, the aim is to increase productivity – more wafers processed per hour – and reduce operating costs. In doing so, customers should be encouraged – as the company itself indicates is already happening – to make greater use of EUV technology, which, for ASML, yields higher margins than DUV technology.

In addition to this – the second point on the agenda – the company is investing in the new generation of EUV machinery: the so-called High-NA systems. These solutions are primarily designed to produce more advanced memory technologies, such as High Bandwidth Memory. Thanks to the fact that they consist of DRAM ‘stacked’ vertically and interconnected via very wide channels, these enable the transfer of enormous amounts of data in a very short time, making them essential for GPUs and processors dedicated to artificial intelligence. ASML points out that over 300,000 wafers have already been processed on the High-NA systems installed at customers’ sites, with a level of technological maturity deemed superior to that of the first EUV machines at the same stage of development. That said, we must not get carried away. On the one hand, major customers such as TSMC have indicated – although the situation appears to be improving – that they have scaled back orders for the most advanced systems. On the other hand, mass production has not yet begun, and the higher level of maturity described is the logical consequence of the fact that EUV was a genuine innovation. High-NA, by contrast, is the evolution – albeit a highly sophisticated one – of something that already exists.

So far, these are some insights into the development of ASML’s core business. However – and this is the third point – the group wishes to diversify its activities. To this end, the aim is to expand into a more downstream stage of the chip supply chain: packaging. That is to say: the process of encasing the silicon-based printed circuit in a protective housing. In this regard, the Dutch company is focusing its efforts on advanced packaging and 3D integration. That is to say: the assembly of multiple microprocessors or memory chips into a single module, to make them more compact, faster and more efficient. As part of this approach, in the third quarter, the group launched the first XT:260 system onto the market. This is a scanner designed specifically for 3D packaging, which is expected to serve the field of artificial intelligence. To be clear: the technology described is in the ‘early adoption’ phase. Initial installations are being used for testing, qualification and the development of production workflows. At present, there are no significant volumes, and the impact on the profit and loss account is negligible. In short, it is a gamble in which – nevertheless – the group has great faith.

The situation is different, however, in the Metrology and Inspection segment (the fourth component of ASML’s project), which has long been a source of revenue for the company (4 per cent of turnover). This area encompasses scanners, software and control instruments designed to optimise the core business of lithography. Well, thanks to its recent partnership with Mistral AI (signed last September with an investment of 1.3 billion), the multinational has taken a significant step forward. ASML aims to integrate new artificial intelligence models into its systems. The aim? To increase the yield of the machinery supplied to customers, reduce calibration times and strengthen the digital services component, which offers higher margins and a growing competitive advantage. Finally, the fifth point: the world of DUV lithography. This remains a ‘pillar’ of the business, despite the growing focus on EUV. ArFi, ArF and KrF machines (accounting for around 60 per cent of revenue in the third quarter of 2025) remain fundamental for the production of more ‘mature’ microchips in the automotive and industrial sectors, as well as for non-cutting-edge products (in both logic and memory). Although in the medium to long term revenue growth will be driven by EUV, DUV remains a stable source of revenue linked to high volumes.

It is therefore clear how the company intends to proceed. But what, then, are the financial results? In the third quarter of 2025, the company reported mixed results. Turnover stood at 7.516 billion, below market expectations. Earnings per share, on the other hand, stood at 5.49 euros, compared with the 5.45 euros forecast by the investor consensus. Beyond the final figures, what the stock market has, in fact, welcomed is the slight improvement in the outlook for next year. This optimism stems from expectations surrounding artificial intelligence. In a report, UBS highlights the boost to turnover expected in 2026, driven by demand for more sophisticated computing chips and memory, fuelled by the growth of artificial intelligence itself. But that’s not all. The Swiss investment bank states that, in subsequent financial years, the new EUV Hig NA machines could provide further support to the company’s results. However, the DIY investor must exercise great caution. At the current stage of AI development, much of the demand for advanced microprocessors comes from the so-called hyperscalers. That is to say: the US tech giants that are building the infrastructure for artificial intelligence itself. That said, it is well known that – when it comes to such mega-investments – many experts harbour doubts not only about the potential return for those making them, but also about whether they will actually materialise. In other words, it is by no means certain that demand for chips – and therefore for the machinery needed to manufacture them – will ultimately be so robust.

In line with this ‘problematic’ outlook, the share price appears to be in a holding pattern. ‘It should be emphasised,’ explains independent technical analyst Silvio Bona, ‘that ASML has a sound long-term bullish trend. From its 2009 levels, it rose to a closing high of 1,010 euros on 11 July 2024.” From there, the shares fell, reaching 550 euros on 4 April 2025. “A level that is precisely the long-term dynamic support.” Subsequently, the group recovered, “reaching a relative high of €939 (30 October 2025). Today,” Bona adds, “the share is in a holding pattern. In the short term, should the shares break below the support level around 820, ASML could fall further to the 760-euro range’. That said, however, the expert concludes, ‘the long-term outlook remains bullish’.

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