ASML's 2026 growth outlook hinges on Q2 bookings
VELDHOVEN : Investors are hoping that ASML's bookings are robust enough to support its 2026 growth ambitions when the world's biggest chip-making equipment supplier reports its second-quarter (Q2) earnings tomorrow.
The Dutch firm has lost around 30% in market value since peaking one year ago, reflecting investor concern over its growth prospects.
At an investor event last November, the maker of the EUV machine – the backbone of AI chipmaking – said it saw 2026 as a growth year but didn't specify how much growth it anticipated.
Analysts see the Q2 as a 'make or break' period which will determine its outlook for 2026, considering delivery times typically take around 12 months.
'ASML would need to double our Q2 order estimates (of €5.3 billion) to comfort our 2026 revenue forecast,' Barclays analyst Simon Coles told Reuters.
Analysts, on average, expect Q2 bookings to reach €4.44 billion, according to a consensus compiled by researcher Visible Alpha, and €21.3 billion for the full year.
TSMC, China demand
Hitting those forecasts depends largely on orders from the world's top contract chipmaker TSMC, analyst Marc Hesselink of ING said.
The company, which is also ASML's top customer, is expected to order the tools it needs for its upcoming manufacturing process, N2, this year.
'We see a better-than-expected demand and order from TSMC and China players, but lower-than-expected demand and order from Intel and Samsung,' said Kevin Wang, analyst at Mizuho.
'Positive news on talks with clients over future orders would also offer reassurance that it will meet current market forecasts,' said Hesselink.
ASML still has a long way to go in 2025 to fulfill booking expectations for its lithography systems, after net bookings, the industry's most closely watched figure, came in at €3.9 billion (US$4.6 billion) in the first quarter, missing estimates, analysts said.
Its earnings will provide a gauge of the resilience of China's chipmakers, which have been buying lower-end ASML equipment not impacted by export restrictions.
That demand helped the company beat first-quarter forecasts.
Last October, ASML projected Chinese orders would fall to a 20% share of all machine sales in 2025.
In fact, they constituted 27% of machine sales, steady from a quarter earlier.
Analysts expect that trend to continue unless US export curbs are further extended to apply to the older equipment.
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