ASML said Wednesday that some of its customers are expressing interest in placing orders for its critical semiconductor tools for 2029 and 2030 as the company reported third-quarter profit that beat expectations.
The comments will likely comfort investors who have been looking to assess the longer-term demand outlook for ASML's lithography machines.
"Our customers continue to increase their short- and medium-term equipment demand forecasts with us, driven primarily by their views on the size and duration of AI-related investments," CEO Christophe Fouquet said in a press release.
"In light of their demand visibility, some customers are expressing an interest in placing orders with us for 2029 and even 2030."
ASML is the only company in the world that produces extreme ultraviolet lithography machines, a key tool used by the likes of TSMC to make the world's most advanced semiconductors.
Investors closely watch the Dutch company's earnings for signs of AI-related chip demand.
Fouquet said current supply planned for 2027 and 2028 will not fully meet the demand of its customers. The company is "investigating ways" to increase capacity for 2028 beyond the 30% increase it had previously forecast.
During the quarter, Samsung and TSMC, the world's two biggest chipmakers, committed to using ASML's High NA extreme ultraviolet (EUV) lithography machines. High NA EUV is ASML's next-generation tool, which analysts see as key to the Dutch firm's future growth.
In July, ASML upped its sales and gross margin forecast for the year as it continued to see strong demand for its tools. Shares of the company have rallied 56% this year.
On Wednesday, ASML narrowed its full-year revenue forecast and said it now expects net sales of between 44 billion euros and 45 billion euros ($49.3 billion to $50.4 billion). The previous lower end of the forecast was for 43 billion euros.
ASML also said it expects fourth-quarter net sales of between 14.2 billion euros and 15.2 billion euros. The upper end of the range is ahead of LSEG consensus estimates of 14.2 billion euros.
For the third quarter, here's how ASML did versus LSEG consensus estimates:
- Net sales: 11.66 billion euros versus 11.72 billion euros expected
- Net profit: 4.96 billion euros versus 4.1 billion euros expected
ASML sticks to China forecast
The semiconductor equipment maker said it expects China sales to account for 20% of its total business, sticking to a prior forecast.
While ASML holds an effective monopoly on EUV machines, a July report from The Information suggested an unnamed Chinese company had begun manufacturing an immersion deep ultraviolet lithography (DUV) machine, citing people familiar with the matter.
ASML dominates the manufacturing of DUV machines, which are less advanced than EUV. China has been ramping up its domestic semiconductor supply chain, with some investors concerned it could challenge the European and U.S. dominance. However, analysts raised questions about China's ability to ramp up its own DUV technology.
ASML meanwhile has faced challenges in China over the last few years. The company is restricted from selling EUV and some DUV tools to China.