Written by: Niu Keke, TechFlow TechFlow
13.2 billion euros.
This is the total order amount ASML received in Q4 2025, more than double the market expectation of 6.3 billion euros, which is also the highest single-quarter order record in ASML's history.
On January 28, ASML, a lithography machine giant, delivered a report that made Wall Street uneasy, and its stock price surged 5% in pre-market trading.
This financial report offers a glimpse into the signals that the AI craze is truly reaching the upstream of the semiconductor industry chain.
Overnight, orders exploded.
In Q4 of 2025, ASML achieved revenue of €9.7 billion, net profit of €2.8 billion, and a gross margin of 52.2%. These figures are all within expectations, and even somewhat lackluster.
But orders—that's the real figure that drives the market crazy.
Of the €13.2 billion in orders, €7.4 billion came from EUV lithography machines. These machines, which cost €200 million each, are the only key for TSMC, Samsung, and SK Hynix to accelerate their progress towards 3nm, 2nm, and even more advanced processes.
Even more striking is that the structural changes in orders reveal a key signal: storage vendors have entered a frenzy.
Logic-related orders totaled €5.8 billion, an increase of €3 billion compared to the previous period, consistent with seasonal fluctuations.
Storage orders reached €7.4 billion, a surge of €4.9 billion compared to the previous period, far exceeding the historical level for the same period.
Memory giants like SK Hynix, Samsung, and Micron are placing orders at an unprecedented rate, and the arms race for HBM (high bandwidth memory) production capacity has intensified.
CFO Dai Houjie put it bluntly: "Customers are becoming significantly more optimistic about the medium-term market outlook, mainly because they believe that AI-related demand is more sustainable."
This optimism has directly translated into orders worth real money. ASML's backlog has reached a staggering €38.8 billion, of which €25.5 billion is for EUV. In simpler terms: their schedule is basically full for the next two years.
Who's placing these orders like crazy? South Korea's "revenge".
Looking at the regional income structure reveals an interesting detail.
In Q4 2025, mainland China will remain ASML's largest source of revenue, accounting for 36% and contributing €3.5 billion. This figure far exceeds the company's previous forecast of 25%, mainly due to the continued demand for ArFi (immersion DUV) equipment from Chinese manufacturers.
But what really deserves attention is South Korea, whose revenue share rebounded to 22% in Q4, amounting to approximately 2.1 billion euros.
Behind this number is the frantic expansion of production by SK Hynix and Samsung. SK Hynix has clearly stated that it will purchase 12 EUV machines in 2026 to fully accelerate HBM3e production capacity, because Nvidia's H100, H200, and B200 are all in dire need of production.
Samsung is even more anxious. They've been getting thrashed by SK Hynix in the HBM market, with yield rates consistently low. Now, the AI boom has given them a final window of opportunity; if they don't aggressively expand production, they'll be completely out of the game.
Barclays analysts directly stated that SK Hynix will secure 12 EUV units in 2026. This is a massive order worth €260 million per unit, totaling €3.1 billion for 12 units.
More importantly, this surge in orders for storage vendors is only just beginning.
Micron just announced that its capital expenditures in 2026 will exceed $20 billion, representing a year-on-year increase of nearly 40%. TSMC has raised its 2026 capital expenditures to $52-56 billion, more than $10 billion higher than originally planned. All of this money will ultimately go to ASML.
2026: From "Cautious" to "Radical"
Just a few months ago, ASML was saying that "revenue may remain flat or even decline in 2026."
Now? They've given a revenue range of €34-39 billion, with a median of €36.5 billion, representing a 12% increase from €32.7 billion in 2025.
However, this guideline is actually still conservative.
Why do we say this? Because after TSMC and Micron raised their capital expenditure forecasts, mainstream market institutions have already raised ASML's 2026 growth rate to over 20%.
ASML's own guidance is "growth of 4-19%", with a median of only 12%. Such guidance, which is "below market expectations", is rare among equipment stocks. These companies usually prefer to give a "stretched" target, then exceed expectations and reap a surge in stock price.
Why is ASML so conservative? There are likely two reasons:
First, there's the uncertainty surrounding the Chinese market. ASML projects that the Chinese market share will drop to 20% by 2026, compared to nearly 30% in 2024-2025. What does 20% mean? If revenue reaches €36.5 billion in 2026, the Chinese market would account for €7.3 billion, more than double the €3.5 billion in Q4 2025 alone. However, considering export controls and waning demand for stockpiling, whether this figure can be achieved remains uncertain.
Secondly, the mass production schedule for High-NA EUV. ASML delivered two High-NA devices (EXE:5200B) in Q4 2025 and recognized revenue. These monsters, each priced at €380 million, could easily boost revenue if more units are sold in 2026. However, the problem is that, apart from Intel, other customers are still observing. TSMC believes that its existing Low-NA EUV technology, combined with multiple exposures, is sufficient to support processes below 1nm and is not in a hurry to adopt High-NA.
Therefore, ASML gave a "room for maneuver" guidance. In the context of equipment stocks, this is actually a positive signal, meaning that the company is confident in exceeding expectations, but just doesn't want to make any overly definitive statements.
Subtle changes in product structure
Digging deeper into product data can reveal some interesting things.
EUV: 14 units shipped in Q4, with an average price of 260 million euros per unit, generating revenue of 3.64 billion euros, a year-on-year increase of 22%.
ArFi (Immersion DUV): 37 units shipped in Q4, with an average price of €82 million per unit, generating revenue of €3.03 billion, a year-on-year increase of 4%.
EUV and ArFi account for nearly 88% of ASML's revenue, making them its absolute cash cows.
However, there's a key detail: EUV revenue growth primarily stemmed from increased average selling price, rather than increased shipment volume. While Q4 EUV shipments were only 14 units, which isn't a large number, the average selling price rose from around €240 million to €260 million.
Why is the average price rising? Because the product structure is being upgraded.
ASML's main product currently on the market is the NXE:3800E Low-NA EUV machine, which has reached a target capacity of 220 wafers per hour, and can even reach 230 wafers per hour in some customer scenarios. This is a "perfectly mature" money-printing machine.
The High-NA EUV (EXE series) has a unit price of €380 million, almost double that of the Low-NA. Revenue from two High-NA units was recognized in Q4 of 2025, which directly increased the average selling price of the EUV.
If High-NA shipments increase from 2 units to 10 units in 2026, ASML's revenue growth rate will easily exceed 20%.
But this depends on when TSMC and Samsung actually place their orders. Currently, Intel is the most aggressive buyer, having already accepted the first 5200-type machine for high-volume manufacturing, ready to be used on the 14A process.
TSMC is observing. Samsung is hesitant. Whoever adopts High-NA first will gain an advantage in the race for sub-2nm process technology. But no one wants to be the first to try it, because ramping up the yield of High-NA takes time and money.
The underlying logic of AI: computing power equals money, and storage is the bottleneck.
The root cause of this surge in orders is simple: AI is devouring everything.
However, unlike a year ago, the transmission path of AI demand has changed.
A year ago, the focus was on "how many GPUs Nvidia sold" and "whether TSMC's CoWoS production capacity was sufficient." Now, the bottleneck has shifted to storage.
Large models like ChatGPT, Gemini, and Claude have endless computing power requirements. But computing power alone is not enough; you also need fast enough memory to feed these computing monsters.
HBM3e is a high-speed memory specifically designed for AI. Its bandwidth is more than 6 times that of ordinary DDR5, allowing the GPU to function smoothly during training and inference without being hampered by memory I/O.
The problem is that HBM's production capacity is too tight.
SK Hynix dominates the HBM market, holding 80% of the share. Samsung's yield rate is low, resulting in a market share of only around 15%. Micron has just entered the market and will not be able to start mass production until 2026.
Nvidia, AMD, Google, Microsoft, and Amazon are all vying for HBM. The supply-demand gap is expected to last until at least 2027.
Therefore, storage manufacturers are not expanding production capacity now, but rather "expanding production capacity desperately".
Micron plans to spend $20 billion on capital expenditures in 2026, an increase of nearly 40% year-on-year. SK Hynix plans to acquire 12 EUV systems. Samsung has increased its capital expenditures for its storage business by more than 50%.
This money will eventually turn into ASML orders.
In terms of application areas, logic chips currently account for 70% of ASML's system revenue, while memory chips account for 30%. However, in terms of order structure, memory chips account for nearly 60%.
This means that storage will be the biggest engine of ASML's revenue growth over the next 12-18 months.
China Market: From "Hoarding Frenzy" to "Normalization"
If there's any less optimistic news, it's about the Chinese market.
ASML expects its revenue share in the Chinese market to drop to 20% by 2026, while this figure was close to 30% in 2024-2025, and even reached 36% in Q4 alone.
Why the decline? Because the Chinese orders in 2024-2025 are essentially "panic buying" demand.
With the US tightening restrictions on Chinese chips, ASML is no longer able to obtain export licenses for some of its high-end DUV equipment (especially immersion ArFi). Chinese wafer foundries know the answer: stockpile as much as you can while you still can.
However, this hoarding trend cannot continue indefinitely.
By 2026, Chinese manufacturers will have enough equipment, and the demand for new purchases will naturally decrease. A 20% share is actually not low—equivalent to 7-8 billion euros annually.
But for ASML, which is used to the "excessive contribution" from the Chinese market, this is indeed a change that needs to be adapted to.
What's even more troublesome is the gross profit margin.
The Chinese market primarily purchases high-margin immersion DUV equipment (ArFi), which has a higher gross margin than Low-NA EUV. Declining orders will put some pressure on gross margins.
This is why ASML set its 2026 gross margin guidance at 51-53%, slightly lower than the 52.8% for the whole of 2025.
However, there's a detail here: Q4 gross margin was 52.2%, while the full-year guidance for 2026 is 51-53%. This means that ASML expects its gross margin for the first half of 2026 to be lower than 52%, possibly due to a decrease in high-margin orders from the Chinese market.
High-NA: A bet on the next decade, or an expensive "option"?
In addition to conventional EUV, ASML is also preparing a major breakthrough: High-NA EUV.
This is the next generation of lithography technology, with a single unit costing up to €380 million. In Q4 of 2025, ASML had already delivered two High-NA machines and recognized revenue.
Currently, Intel is the most aggressive buyer, having already accepted the first 5200 unit for high-volume manufacturing, intended for use on the 14A process.
ASML is very confident in the performance of High-NA: "Imaging, performance, and overlay results are all excellent."
However, this technology may not become widely available until 2027-2028.
Why? Because TSMC and Samsung are both taking a wait-and-see approach.
TSMC's logic is clear: our 2nm process is already in mass production, using Low-NA EUV with multiple exposures. The yield is good, and the cost is controllable. 1.4nm is also on the way, still using Low-NA. Only when we reach below 1nm will we need High-NA.
In other words, TSMC believes that Low-NA EUV can still be used for another three years.
Samsung's attitude is more nuanced. They suffered greatly from low 3nm yield rates; the GAA architecture's ramp-up was too slow, leaving them two generations behind TSMC. Now, Samsung's most pressing task is to improve 3nm yield rates and win back lost customers.
High-NA? Let Intel test the waters first.
However, if Intel's 14A process successfully mass-produces High-NA chips with competitive yield and cost, TSMC and Samsung will immediately follow suit. At that point, High-NA orders will flood in like an avalanche.
That's why ASML dares to say "revenue of 44-60 billion euros by 2030".
Because High-NA is not just an equipment upgrade; it can also increase the price per unit from €200 million to €400 million. As long as shipments don't decrease, revenue can easily double.
Laying off 1,700 employees: Optimization or anxiety?
In this impressive financial report, ASML hid some bad news: it will lay off 1,700 employees, mainly in the Netherlands, with some in the United States.
The reason given was: "The company's work style has become less agile in certain situations."
This explanation is a bit subtle. ASML isn't short of money or orders; it just feels its organization is bloated.
The layoffs are primarily concentrated in the technology and IT departments, with the aim of "strengthening engineering and innovation capabilities in key areas."
In other words, we should cut peripheral departments and concentrate resources on core technology research and development.
This is actually a positive sign; ASML is preparing for larger-scale growth and needs a more flexible and efficient organizational structure.
However, another interpretation exists: ASML may be concerned about the progress of High-NA EUV development and yield ramp-up. Laying off 1,700 people would allow them to invest the money in more critical technological breakthroughs.
After all, Intel has already secured the first High-NA unit, and if their 14A process goes into mass production smoothly, TSMC and Samsung will immediately follow suit. At that time, ASML must have sufficient production capacity and technological reserves to handle the surge in orders.
€12 billion buyback: Confidence or "stability maintenance"?
ASML announced a new €12 billion share buyback program, to be completed by the end of 2028.
The previous buyback program (2022-2025) was originally set at €12 billion, but only €7.6 billion was actually completed.
Why wasn't it completed? Because the stock price rose too quickly, the repurchase cost was too high, and the company felt it wasn't worthwhile.
The launch of the new buyback program sends two signals:
First, the company is confident in its future cash flow. €12 billion is not a small amount, and ASML's willingness to spend this money on share buybacks demonstrates their belief that profitability will continue to improve from 2026 to 2028.
Second, the current share price is attractive. If ASML felt the share price was overvalued, they wouldn't be in a hurry to repurchase shares. The launch of a repurchase program indicates that management believes the current valuation is reasonable or even low.
Dividends also increased by 17%, to €7.50 per share. This is ASML's consistent practice: when they make money, they distribute it to shareholders.
One company, defining an era.
ASML's financial reports are never just about the performance of one company.
It is the barometer of the entire semiconductor industry chain, the thermometer of the real transmission of the AI wave to the manufacturing end, and the fuel gauge of whether TSMC, Samsung, and Nvidia can continue their rapid growth.
In 2025, ASML achieved revenue of €32.7 billion and net profit of €9.6 billion, representing a year-on-year increase of 16%. Gross margin was 52.8%, and net margin was 29.4%.
In 2026, the company expects revenue to grow by 12% (conservative estimate), while the market expects growth of over 20% (aggressive estimate).
ASML aims for €44-60 billion in revenue and a gross margin of 56-60% by 2030.
This is not a conservative company. It is a company that firmly believes AI will reshape the semiconductor industry landscape and is ready to reap the biggest benefits.
With a current market capitalization of $563.5 billion and an expected PE ratio of approximately 39 times in 2026, it is at the midpoint of its historical valuation range of 30-45 times.
However, this valuation may underestimate ASML's true value.
Why? Because the two cycles are overlapping:
Short-term cycle (2026-2027): AI and storage demand explodes, TSMC, SK Hynix, Samsung and Micron expand production at a frenzy, ASML has full orders and high revenue growth.
Medium to long term (2027-2030): High-NA EUV will begin to ramp up production, with the price per unit jumping from 200 million euros to 400 million euros, and revenue will take another step forward.
The superposition of the two cycles could extend ASML's "supercycle" into 2030, or even longer.
The record-breaking €13.2 billion in orders for a single quarter is just the beginning.
This grand feast has only just begun.
