Sources: the EU is negotiating with China to lift sanctions on an unnamed Chinese company in exchange for China lifting sanctions on a German ASML supplier

ASML's advanced EUV machines are now consistently booked out years in advance, with significant customer interest for orders in 2029 and 2030.

ASML reported a significant surge in its third-quarter sales to China, which more than doubled compared to the previous quarter, increasing China's share of ASML's machine sales to 23% from 14%. Despite mounting US pressure for stricter export controls on less advanced chipmaking machinery, ASML raised its full-year 2026 sales guidance to €44 billion, with strong demand driven by its advanced Extreme Ultraviolet (EUV) machines. The company anticipates China will constitute approximately 20% of its total sales this year. ASML's CFO noted strong sales momentum and expects revenue to continue growing into 2027 and 2028. The CEO indicated that planned capacity expansions for low-NA EUV systems over the next two years might be insufficient to meet demand, with customer discussions and order intake extending into 2029 and 2030.

The robust demand for ASML's advanced EUV machines, with sales expected to rise by over 45% this year, highlights a strategic divergence from US-led restrictions focusing on less advanced equipment. This surge suggests that while the US aims to curb China's access to cutting-edge semiconductor technology, demand for ASML's most sophisticated tools, critical for producing next-generation chips, remains largely unhindered. The company's increased sales guidance and capacity expansion plans underscore the ongoing global race for advanced chip manufacturing capabilities, irrespective of geopolitical pressures. This dynamic implies that the market for high-end semiconductor manufacturing equipment is becoming increasingly bifurcated, with different regulatory impacts on various technological tiers.

ASML's projected revenue growth and order book extending into 2030 indicate a significant long-term demand cycle for advanced chip manufacturing capacity. The company's capacity expansion plans, even those for 2028 and beyond, may prove insufficient, signaling potential bottlenecks for chipmakers reliant on these advanced systems. This situation could lead to extended lead times for essential equipment, impacting the pace of technological advancements and potentially influencing competitive dynamics among foundries and fabless design companies globally. The sustained high demand for EUV machines suggests continued investment in leading-edge semiconductor nodes.