ASML's stock is up 64% YTD, trailing the US chip sector as the industry spends more on processes outside of lithography, like etching and advanced packaging
ASML Holding NV's ascent to fresh record highs has been a highlight for European markets, yet it's done little to improve …
Context & Ripple Effects
ASML entered 2026 after reaching a $500B-plus market capitalization milestone following strong TSMC results, recovering from a 2025 period in which China export rules and US tariffs weighed on its shares. Its earlier results also showed how strongly China had contributed to sales, underscoring the importance of both leading-edge and geographically diversified demand.
The latest results and higher 2026 sales outlook reinforce ASML's central role in chip-fab investment. But the comparison with the US chip sector highlights that the current investment cycle is rewarding equipment exposure beyond lithography as well.
First-order effects
- ASML's raised €43B-€45B 2026 sales forecast and quarterly beat strengthen its near-term revenue outlook, while planned EUV and DUV price increases raise equipment costs for customers including TSMC.
- The roughly $400M price of a High-NA EUV system makes each leading-edge capacity decision more capital-intensive, even as ASML's shares lag the broader US chip-sector advance.
Second-order effects
- Chipmakers may face greater pressure to allocate fab budgets among lithography, etching, and advanced packaging rather than treating lithography spending as the sole expression of leading-edge investment.
- Equipment suppliers with greater exposure to non-lithography process steps and packaging can capture a larger share of incremental spending, helping explain why a broad chip-equipment rally need not translate into equal relative gains for ASML.
Third-order effects
- If process complexity and packaging continue to absorb a larger share of semiconductor capital expenditure, the industry's equipment value pool could become less concentrated around lithography, despite ASML retaining a critical role at the leading edge.
- Higher tool prices could deepen the advantage of chipmakers able to fund the most advanced manufacturing transitions; the extent of that effect will depend on customer demand and on export-policy constraints that have already affected ASML's China exposure.
The trend: The AI-era semiconductor buildout is broadening from a lithography-led equipment cycle into a multi-step manufacturing and advanced-packaging investment cycle.