The world's leading semiconductor equipment supplier, ASML, recently released its Q2 2025 financial report. Although the company's performance exceeded market expectations, it expressed concerns about growth prospects for 2026.

Q2 Performance Beats Expectations

ASML's net order intake for Q2 reached €5.54 billion, surpassing the market expectation of €4.45 billion. The total net sales amounted to €7.692 billion, higher than the market expectation of €7.54 billion. The operating profit for the quarter was €2.664 billion, and the net profit was €2.29 billion, both above the levels of the same period last year. The gross margin was 53.7%, exceeding the market expectation of 51.6%.

Currently, artificial intelligence remains the main growth driver in the fields of logic and memory chips, which has propelled the company's performance. Additionally, ASML's extreme ultraviolet (EUV) lithography equipment orders stood out, accounting for 42% of the total orders, valued at approximately €2.3 billion.

Uncertainty Surrounding 2026 Growth

ASML CEO Christophe Fouquet stated that although the company is preparing for growth in 2026, it cannot confirm whether it will be achieved. The main concerns are the uncertainties in the macroeconomic and geopolitical environment, especially the potential impact of U.S. tariff policies. The uncertainty in tariff negotiations will also lead U.S. chip manufacturers to delay investment decisions. The U.S. plans to impose a tariff of up to 30% on European semiconductor equipment. The potential cost of a high-end EUV machine could rise from €250 million to €325 million, and multiple transatlantic shipments of components would result in cumulative tariffs.

ASML has adjusted its full-year net sales growth forecast for 2025 from the previous range of €30 billion to €35 billion to approximately €32.5 billion, with a growth rate of about 15%. For 2026, the company said it cannot currently confirm whether growth will be achieved.

Importance of the Chinese Market and Future Outlook

ASML expects that the revenue share from Mainland China will exceed 25%. In the past three quarters, the equipment sales share in the Chinese market has already reached 27%. This indicates that Chinese chip manufacturers are still actively purchasing equipment in anticipation of stricter export restrictions.

Despite its cautious attitude towards growth in 2026, ASML is still advancing its long-term growth plans. ASML plans to increase its annual sales from the current level of approximately €30 billion to €60 billion within the next five years. However, uncertainties in trade policies could still have a significant impact on chip manufacturers' investment plans and ASML's market performance.

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