As a core player in the global chip supply chain, Dutch lithography giant ASML Holding NV is emerging as a "second-order beneficiary" of the artificial intelligence (AI) boom. Following a site visit to ASML's headquarters and meetings with executives, including CEO Christophe Fouquet, a Goldman Sachs analyst team led by Alexander Duval released a report stating that market evidence suggests AI infrastructure demand is still expanding, not peaking, and the semiconductor capital expenditure cycle has significant room for further upside.
The report conveyed highly positive signals from the visit: ASML is set to deliver over 60 extreme ultraviolet (EUV) lithography systems this year, with a path to exceed 80 by 2027. CPU demand is becoming a new growth engine potentially surpassing GPUs. Memory customers are accelerating orders and prepayments. The adoption of new High-NA technology in memory could outpace logic chips. Chinese market demand remains robust, with demand for DUV equipment potentially increasing further.
Goldman Sachs maintains a Buy rating on ASML with a 12-month price target of €1,600, implying a 2027 forward P/E of 37x.
**Capacity Expansion Progressing, AI-Driven Demand Upside Remains** ASML management confirmed that its EUV capacity expansion is on track, with the 2026 ramp progressing well and positive momentum expected to continue into 2027. Supporting factors include ongoing optimization of cycle times, significant improvements in supply chain execution (including optical components), and refined delivery planning frameworks.
Management reiterated the target to deliver over 60 EUV systems this year and outlined a clear path to exceed 80 by 2027. Notably, this ramp is smoother than previous cycles, with high near-term delivery visibility.
Crucially, ASML sees potential for further demand upside driven by AI, particularly from emerging large-scale AI infrastructure plans that suggest future investment could far exceed current expectations. Memory customers are already accelerating fab construction timelines, viewing the return on investment for incremental capacity as highly attractive, reinforcing the logic for sustained high investment.
**Logic/Foundry Customer Mix Improving, CPU Emerging as Key AI Demand Engine** Goldman analysts noted that ASML's customer mix in the foundry/logic segment continues to improve, with Samsung Foundry, for example, actively pursuing opportunities in logic-memory integration.
On the demand side, CPUs have become a significant growth engine, with current demand strength potentially exceeding that for GPUs, due to their irreplaceable role in supporting increasingly complex AI workloads.
This demand diversification across customers and compute architectures, in Goldman's view, suggests ASML's growth foundation is more balanced and sustainable, not reliant on a single customer or application.
**Memory & Logic Customer Visibility Significantly Improved, More Long-Term Commitments** ASML emphasized that demand visibility from both logic and memory customer groups has improved markedly. Customers are placing orders with longer lead times and showing a greater willingness to prepay, providing ASML with demand certainty extending beyond just the next year.
Goldman believes this deep engagement from both key segments mitigates some execution risk for the capacity expansion and provides more constructive support for the 2027-2028 outlook.
**High-NA Adoption Lower Barrier in Memory, Could Scale Ahead of Logic** Regarding new technology adoption, ASML indicated that the barrier to adopting High Numerical Aperture (High-NA) EUV technology is relatively lower in the memory segment. Customers can directly replace certain existing reticles without needing additional stitching processes, provided the High-NA tools reach sufficient maturity.
This implies that High-NA introduction in memory could occur earlier than in logic chip applications, depending on the timing of the technology insertion.
Furthermore, ASML observed a more positive customer attitude towards increasing EUV layers in DRAM, as customers fully recognize EUV's advantages in fab efficiency, cycle time, and cost structure.
Goldman expects EUV layers in memory applications to grow to double digits by 2030 (compared to about 5 layers in 2025), aligning with the guidance range provided by ASML at its prior Capital Markets Day.
**Chinese Demand Resilient, DUV Demand Intensity May Increase** ASML views China as an important end-market, with current demand remaining broadly stable. Management stated that the incremental impact of existing export controls on near-term business is relatively limited, with related scenarios already factored into the 2026 guidance.
With EUV equipment procurement restricted, Chinese customers are widely adopting multi-patterning alternative technology paths for process advancement. This approach is more lithography-intensive, particularly driving demand for deep ultraviolet (DUV) systems.
Chinese manufacturers' use of DUV multi-patterning to replace EUV scaling for advanced nodes has objectively created a reliance on equipment-intensive manufacturing paths, sustaining procurement demand for ASML's DUV systems.
Goldman believes this demand structure helps support the gross margin profile of ASML's related product lines.
Synthesizing these five key points, Goldman's core conclusion is that the continued evolution of leading-edge AI models requires more GPUs, CPUs, HBM, DRAM, and other advanced logic chips, all of which necessitate more EUV and DUV lithography systems. ASML's high visibility into 2027-2028 indicates the semiconductor capex cycle still has room to run. Recent U.S. data shows AI-related capital expenditure for this year alone has reached $800 billion.
Comments