ASML Pushes High-NA EUV Forward: How Big is the Manufacturing Leap?

ASML Holding ASML, a leading manufacturer of semiconductor lithography tools, is at the center of a major shift in advanced chip manufacturing. Global semiconductor chip manufacturers are now increasingly demanding extreme ultraviolet (EUV) lithography layers in both logic and DRAM manufacturing.

This shift replaces complex multi-patterning with deep ultraviolet (DUV) with single-exposure EUV, simplifying production, improving yield, lowering process complexity, and supporting advanced scaling. Given this transition, ASML expects its EUV business to grow rapidly in 2026, driven by the demand from advanced DRAM and leading-edge logic, while its DUV business will be down in comparison to 2025.

ASML’s Low Numerical Aperture EUV and High Numerical Aperture (High-NA) EUV products are likely to benefit as ASML holds a near-monopoly in EUV technology crucial for the world’s most advanced chips at 3nm and below. Given these dynamics of the industry, ASML benefits from extraordinary pricing power and strategic importance. Major customers like TSMC, Samsung and Intel rely on ASML’s systems to stay ahead in chip innovation.

ASML’s venture into sub-2nm production with High-NA EUV systems is the next technological leap for chipmakers. This technology will provide ASML with long-term potential as the industry moves toward denser and more efficient chips. ASML’s High-NA machines will be central to that shift throughout 2026 and will be a major contributor to its revenues.

ASML’s High-NA EUV platform is progressing rapidly, with more than 300,000 wafers already processed at customer sites and final system specifications expected to be demonstrated shortly. The EXE:5200 has entered customer fabs, including first deliveries to SK hynix, positioning High-NA as the primary driver for future advanced DRAM and sub-2nm logic.

How Competitors Fare Against ASML

ASML Holding is the leading player in the lithography-based manufacturing and a near-monopoly in the EUV market. However, in the broader wafer fabrication equipment space, it competes against Lam Research LRCX and Applied Materials AMAT.

Lam Research is an established wafer fabrication equipment manufacturer that is established in the memory space. Lam Research’s memory segment, accounting for both Dynamic Random Access Memory and Non-Volatile Memory divisions, is gaining traction on the back of AI. Lam Research is also winning multiple clients as DRAM manufacturers are using its latest conductor etch tool, Akara.

Applied Materials specializes in Gate-All-Around transistors at 2nm and below, Backside power delivery, Advanced wiring and interconnect, HBM stacking and hybrid bonding and 3D device metrology, which are indispensable for manufacturing next-generation semiconductor chips. Recent launches like Xtera epi, Kinex hybrid bonding, PROVision 10 eBeam will add to AMAT’s growth story.

ASML’s Price Performance, Valuation and Estimates

Shares of ASML have gained 76.5% in the past six months compared with the Computer and Technology sector’s growth of 17.7%.

ASML 6-Month Performance Chart

From a valuation standpoint, ASML trades at a forward price-to-sales ratio of 13.17, higher than the sector’s average of 7.39.

ASML Forward 12-Month (P/S) Valuation Chart

The Zacks Consensus Estimate for ASML’s fiscal 2026 and 2027 earnings implies year-over-year growth of 39.7% and 4.3%, respectively. The consensus estimate for fiscal 2026 and 2027 has been revised upward in the past 30 days.

ASML currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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

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