ASML, the sole supplier of crucial chipmaking machinery to Western manufacturers, has significantly raised its financial guidance for the year, citing robust demand from both memory and advanced logic chip producers. The company's increased predictions are driven by aggressive capacity expansion plans from its customers.
According to ASML's CEO, the dynamics influencing advanced logic and DRAM sectors are closely aligned, with customers pursuing equally ambitious build-outs. This proactive approach is supported by long-term agreements that offer customers greater visibility and confidence to invest in substantial capacity increases to meet escalating demand. ASML now anticipates advanced logic foundry-related net system sales to grow by over 25% this year. In the DRAM market, supply challenges have led to price increases for DDR and HBM, prompting considerable investments in fab expansion. Customers are not only increasing meaningful capacity this year but are also planning further expansions, indicated by the development of multiple mega fabs.
The company's executive vice president and CFO stated that ASML expects to ship approximately 65 Low-NA EUV systems this year, projecting a year-over-year EUV net system sales growth exceeding 45%. This surge in demand is attributed to strong momentum in both DRAM and advanced logic segments. The AI boom is identified as the primary catalyst behind this robust momentum and the aggressive expansion plans for DRAM and logic facilities. For DRAM, this has also exacerbated the global memory shortage.
ASML's optimistic outlook confirms the tangible physical shifts occurring within the semiconductor industry as it scrambles to fulfill the insatiable hardware requirements of AI companies. This comes as TSMC, the world's largest chipmaker and a key ASML customer, announced plans to invest an additional $100 billion in US chip manufacturing.
The demand ASML is witnessing extends to 3nm capacity for AI accelerators, likely including chips for upcoming Nvidia Blackwell and Rubin platforms, as well as 4nm and 5nm nodes to support a diverse range of AI-related chipsets. Furthermore, ASML notes that customers are already planning investments for 1.4nm process development, which includes TSMC's A14 and Intel's 14A processes, with the latter reportedly progressing smoothly toward production readiness.
While this increased production capacity is a welcome development amidst a global memory shortage and rising demand from China, recent analyses suggest that even with these expansions, a DRAM supply shortfall relative to demand may persist into 2030. This situation could mean that a potential decrease in component prices might depend on a downturn in demand or a broader AI market correction, though such a scenario could also carry significant economic repercussions.