While Nvidia, AMD, and hyperscaler companies may be at the forefront of AI investments, ASML is one of the most critical companies behind this race. This is because ASML is at the heart of the lithography machines needed to produce the world's most advanced chips. So what exactly does ASML do? How fast is its production capacity growing? Where does it get its revenue? What is its backlog like? And what does the company tell us for 2027–2028? Let's look at it point by point.
1- What exactly does ASML do?
ASML is not a chip manufacturer. It produces the lithography systems needed for companies like TSMC, Samsung, Intel, and SK Hynix to produce chips. To put it simply:
Chip production requires billions of transistors to be processed onto silicon wafers in extremely small patterns. ASML's machines enable the transfer of these patterns onto the wafers. The company's products can be broadly categorized into several groups:
• EUV lithography
• DUV lithography
• High-NA EUV
• Metrology & Inspection
• Software / computational lithography
• Service and upgrades for installed machines
The most critical technology here is EUV — Extreme Ultraviolet Lithography. EUV is becoming increasingly critical, especially in advanced manufacturing processes such as 7nm, 5nm, 3nm, and 2nm. The growth in AI accelerators, advanced CPUs/GPUs, and HBM production is therefore indirectly driving demand for ASML.
2- ASML's biggest advantage: EUV
To understand ASML's investment story, it's necessary to understand the EUV side.
In 2025, the company sold a total of 535 systems:
• 48 EUV systems
• 279 DUV systems
• 208 metrology & inspection systems
EUV system sales revenue increased by approximately 39% to €11.6 billion in 2025. In contrast, DUV system revenue decreased by approximately 6% to around €12 billion. Metrology & Inspection sales, however, grew by approximately 28% to €825 million. This indicates that EUV is increasingly at the heart of the company's growth. According to ASML management's latest statement:
3- EUV Capacity Increase:
2026 Low-NA EUV capacity: 65 systems
This is expected to increase by +30% in 2027. Theoretically, capacity could rise from approximately 65 to 85 systems. But the story doesn't end there. The company is exploring a further 30% capacity increase for 2028. If this happens:
2026 → 65
2027 → 85
2028 → 110
4-DUV Capacity Increase:
While a capacity of 130 is expected in 2026, the target is to reach 169 capacity in 2027, a 30% increase. A similar target has been given for 2028.
5-Strong signals were also given on the demand side:
In the Q2 2026 meeting, management stated that the 2027 Low-NA EUV capacity is almost completely met by orders. Moreover, the company states that it has already received a significant number of EUV orders for 2028 deliveries.
6-Backlog Side:
End of 2025: €38.8 billion. At the end of 2024, the backlog was approximately €35.9 billion. So the backlog increased by approximately 8%. However, we can see from the management's statements that the order visibility has strengthened even further in 2026. The company describes its order momentum in the first half as extremely strong. More importantly, its 2027 Low-NA EUV capacity is almost entirely fulfilled by orders.
Where does the company's revenue come from?
In 2025, the company generated €32.7 billion in revenue. This represents a 15% annual increase. Revenue can be divided into two groups:
System sales and Installed Base Management (including parts and maintenance for sold products). The company reported system-side revenue of €24.5 billion in 2025, representing a 12.4% annual increase. Installed Base Management, on the other hand, grew by 26% annually to €8.2 billion. This segment is extremely important for ASML because as the global ASML machine park grows, the company generates continuous revenue not only from new machine sales but also from existing machines.
7- Which ASML customers are affected by AI growth?
ASML also separates its system revenue into Logic and Memory. Logic revenue increased by 22% to €16.1 billion. Memory sales remained relatively flat, with a 3% decrease in 2025. However, looking specifically at 2026, there are significant changes. While Logic sales are expected to grow by over 25% this year, memory sales are expected to grow by 75%. This is mainly due to:
• HBM
• DDR
• AI accelerator
• Advanced Logic
• 3nm capacity increase
• 2nm ramp
Therefore, AI demand is now fueling ASML from both Logic and Memory.
8- What Does the Latest Balance Sheet Tell Us?
ASML reported in Q2:
Revenue: €9.3B
Net profit: €2.9B
Gross margin: 54%
System sales:
€6.6B
Of this:
€3.8B → EUV
€2.8B → Non-EUV
Installed Base Management reached €2.8 billion. Moreover, service/upgrade revenues exceeded the company's own expectations by approximately €300 million. The customer distribution of system revenues was:
51% Logic
49% Memory
This shows how much the Memory investment cycle has accelerated in terms of ASML.
9- The Company Significantly Raised Its 2026 Expectations
A very important change has occurred in the last few months. At the beginning of 2026, ASML expected:
34–39 billion € in revenue.
After Q1, this was increased to:
36–40 billion €.
After Q2, the expectation was raised to:
43–45 billion €. This represents a 35% annual growth. The company also increased its margin expectation to the 54-56% range, which is proof of increased efficiency. I want to say that I really like the company. It is one of the key players in the AI sector, and if the demand for AI continues for years to come, ASML will achieve significant growth here.
