ASML, the largest company in the field of chip-making equipment, is stuck at a crossroads where the company encounters increasingly uncertain growth opportunities in the year 2026. Industry concern is the reality in the warning issued by the company that its sales may stagnate.
The fact that there is a looming tariff threat to European products being imported into the US which directly impacts high-end products of ASML is a significant concern. The danger of a tariff of 30% would make these complicated systems very expensive, and ASML might be under pressure to transfer these to its clients. Such a change would increase the price of machines to a point where the chipmakers would be reluctant to make their investments.
Nevertheless, these concerns notwithstanding, the second quarter figures performed well. The net booking was stronger than expected, which was driven by the continued AI-related demand for next-generation chips. These bookings consisted mostly of the sale of ASML’s most sophisticated lithography equipment, something that underscores the present demand for leading-edge chip technology. But the big clients, such as Intel and Samsung, have their issues that need to be resolved, and so their orders have been minimal, and the prospects are unknown.
In planning, numerous questions characterize the way forward. The management of ASML is attempting to plan ahead of growth and is yet unable to do so. In the current state, the robust demand by China is providing some relief, but the company and the industry will have to wait until the situation clarifies so that the new expansion can be undertaken at the same rate recorded in the previous years.
