ASML Aims 30% EUV Revenue Growth in FY25: Can it Hit the Target?

ASML Holding (ASML) is aiming for about 30% year-over-year growth in extreme ultraviolet (EUV) revenues in 2025. ASML expects this growth to be driven by both an increase in Low Numerical Aperture (NA) EUV capacity and initial shipments of High NA systems. Moreover, advanced customers, such as Taiwan Semiconductor Manufacturing, Samsung, and Intel, are expected to add around 30% more EUV capacity compared with 2024, which would further contribute to its revenue growth target.

The higher productivity NXE:3800E systems, which are now shipping at full specification of 220 wafers per hour configuration, will allow its customers to expand capacity with the same number of systems but at higher average selling prices, resulting in improved margins. In DRAM manufacturing, these systems replace complex multi-patterning deep ultraviolet (DUV) steps with single EUV exposures, reducing cost, shortening cycle times, and improving yields.

Additionally, demand is being driven by artificial intelligence (AI) applications, which are driving investment in both logic and memory chips. Logic customers are adding leading-edge node capacity, and DRAM customers are adding more EUV layers to their latest and future nodes.

ASML has also shipped its first EXE:5200B High NA system, which is designed for high-volume manufacturing and offers about 60% higher productivity than the EXE:5000, and is expected to contribute to the 2025 EUV revenue growth target.

ASML faces risks arising from macroeconomic uncertainties, rising geopolitical tensions and tariffs, which could hurt the timing of customer spending. Despite these risks, ASML expects total revenue growth for 2025 to be around 15%, supported by the product mix shift toward advanced logic and DRAM production using advanced EUV lithography systems. The Zacks Consensus Estimate for ASML’s 2025 revenues is pegged at $37.83 billion, suggesting a year-over-year increase of 23.8%.

How Competitors Fare Against ASML

Applied Materials, Inc. (AMAT) and KLA Corporation (KLAC) are also key players in advanced chipmaking tools. Applied Materials supplies equipment used in chip fabrication, especially for patterning and deposition steps that can complement or compete with EUV. KLA, on the other hand, focuses on process control and metrology, where its tools are vital in ensuring chip quality.

Both companies benefit from growing semiconductor complexity and are investing in next-generation technologies. While they don’t manufacture EUV systems, they are critical to the same ecosystem and could benefit from an AI-driven push for smaller, more complex nodes that support ASML’s EUV growth.

ASML’s Price Performance, Valuation and Estimates

Shares of Applied Materials have gained 4% year to date compared with the Semiconductor Equipment - Wafer Fabrication industry’s growth of 4.6%.

ASML YTD Price Return Performance

From a valuation standpoint, ASML Holding trades at a forward price-to-sales ratio of 7.54X, higher than the industry’s average of 7.06X .

ASML Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for ASML Holding’s fiscal 2025 and 2026 earnings implies year-over-year growth of 30.1% and 1.5%, respectively. The estimates for fiscal 2025 have been revised upward in the past 30 days, while estimates for fiscal 2026 have been revised upward in the past seven days.

ASML Holding currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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