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ASML's EUV moat is hard to replicate because making EUV light is only one part of a production tool: sustained fab uptime matters, and Zeiss optics are the harder moat. Langdao Silex showed a Chinese light source with 90% local components but disclosed no power figure. ASML's production sources run at about 600W; its February demo reached 1,000W with a path to 1,500W. Langdao staff put mass production three to five years away. x.com
ASML's lithography runway is supported by an expected 2027-28 supply shortfall and High-NA EUV's move toward production. Its CEO expects planned supply to miss demand in both years and is exploring 2028 capacity beyond a planned 30% increase as AI-related equipment forecasts climb. ASML says Intel has processed over 1 million High-NA wafers with same-layer results matching or beating low-NA; fleet availability nears 90%. Samsung plans high-volume use in 2028 and TSMC in 2030. x.com x.com
ASML cannot make enough EUV machines to meet demand, which it says will outrun supply through 2028. Its 2026 sales guide rose from €34-39 billion to €44-45 billion, and gross margin hit 57.5%. The combination of an EUV monopoly, demand outrunning supply and growing pricing power is rare. x.com
ASML's EUV R&D is starting to pay off through operating leverage. Q3 R&D fell as a share of sales, though one quarter is not a trend. Higher units, IBM sales and EUV/DUV prices put 2028 estimates well above the 2030 guide and ahead of consensus; shares look cheap at €1,530. Assuming 30% prepayment, liabilities imply €42-45bn of orders in 2026's first nine months, subject to invoicing lags. The proposed MATCH Act could restrict China sales; 2029-30 demand is less certain than 2028. x.com x.com … Show more
ASML faces moat erosion now that China has a homegrown alternative to its machines. The Information reports a state-backed Shanghai company has started mass-producing DUV lithography tools. Chinese fabs stockpiling older DUV tools had become a major revenue driver, with China at 36% of sales in 2024 and 29% last year. Output is tiny, about five machines this year and maybe twenty next. But once a second supplier exists, the question shifts from "no alternative" to "for how long." x.com
ASML remains the undisputed lithography champion because DUV and EUV scarcity will ultimately be the real bottleneck to scaling AI compute. Wall Street sold semicap on a Shanghai firm building five 2008-vintage DUV tools, which threaten approximately none of ASML's moat this decade. Meanwhile, Situational Awareness put $500 million into Source Foundry, a startup aiming to break ASML's monopoly by redesigning chip manufacturing. Whoever breaks that monopoly wins, but it is a tough race. x.com
The selloff in ASML and BESI on China's new immersion DUV tools is an overreaction with minimal real impact. China plans five units this year and 20 in 2027 for SMIC, Hua Hong and CXMT, under 4% of ASML's roughly 130 annual immersion DUV shipments. DUV can make 7nm chips via multi-patterning, but at higher cost, lower capacity and more alignment errors, and EUV is a fundamentally different technology. Nikon and Canon face the most pressure. x.com
ASML could break down from here on the China news. x.com
ASML's 6% drop on a report of Chinese immersion DUV mass production is no cause for panic. Per a Chinese semiconductor expert, the first-gen tool is five or six generations behind ASML's 1980-class machines, which Chinese fabs already stockpile, and SMEE's six dry DUV tools sold in 2023 never ran production. No Western fab is likely to qualify a Huawei-linked tool, the lost revenue was already exiting under export controls, and lithography isn't China's binding constraint. x.com x.com
ASML is getting paid more for each tool, moving beyond proving it can build enough of them. Q3 2026 brings pricing power and an order book reaching 2030; the house view has strengthened, with high conviction. x.com
ASML may have topped, since semicap thrives on shortage and would be hit hardest in an overbuild. Then earnings acceleration from memory and fab projects stops or reverses; the labs' leading-edge chase may be at its apex, positioning is bullish and the moat is threatened. Bullishness on Korean, US and Taiwan fab projects makes sense for now. But if the cycle top is confirmed and labs change how they chase the frontier, or token deflation kills some labs, the shortage can end sooner. x.com x.com … Show more
ASML's selloff on China's domestic DUV news is an overreaction because the revenue hit is small and China is nowhere on EUV, ASML's real moat. China is making about five DUV machines this year versus the hundreds ASML delivers. BofA, which also calls the selloff an overreaction, estimates China going domestic cuts ASML's sales by about EUR 1.4B next year, or 2.4%, yet the stock fell about 6%. It helps China's chip independence far down the road but leaves ASML oversold today. x.com x.com
