ASML Warns AI Chip Tool Demand Will Outstrip Capacity Through 2028

ASML will fail to satisfy customer demand for its chipmaking machinery in 2027 and 2028 as orders for artificial intelligence hardware exceed manufacturing capacity.

The Dutch equipment maker projected fourth-quarter sales between €14.2 billion and €15.2 billion, beating average market forecasts of €14.19 billion compiled by LSEG.

Gross margins for the final quarter are projected at around 57 per cent. Extreme demand for advanced lithography systems has stretched delivery schedules well past normal lead times, pushing commercial negotiations into the next decade.

Delivery Bottlenecks Hit Advanced Fabs

Chief executive Christophe Fouquet confirmed that order discussions with key chipmakers now routinely bypass near-term delivery slots. Demand has outpaced every planned production adjustment across the company’s assembly facilities.

“A lot of our discussions with our customers now are shifting in fact beyond 2027,” CEO Christophe Fouquet said in a statement.

Fouquet noted that tool buyers are placing firm bookings for 2028 delivery while opening formal negotiations for 2029 and 2030 production slots. Foundries across Asia building capacity for artificial intelligence processors face extended wait times for critical extreme ultraviolet scanners.

Asian Foundry Expansion Pressures

For semiconductor manufacturers in Taiwan, South Korea and Japan, machinery shortfalls limit how fast new wafer fabrication plants can ramp output. Tool allocations dictate foundry expansion schedules, consumer hardware production runs and memory delivery timelines.

The equipment shortage concentrates operational risk among contract chipmakers competing for identical production slots. Commercial foundries that secured earlier delivery positions will hold output advantages over rivals waiting on delayed tool shipments.

Capacity Expansions Fall Short

Production limits persist despite aggressive factory investments announced earlier this year. In July, the toolmaker outlined plans to raise equipment output by 30 per cent in 2027 and add another 30 per cent capacity increase in 2028.

Those production increases will still leave the manufacturer short of customer requirements. Management is reviewing additional manufacturing options to widen assembly bottlenecks before 2028 delivery commitments close.

Production Timelines to Watch

Tool buyers now face strict ordering windows to secure production slots for 2029. Equipment allocations and any revision to the planned 30 per cent annual capacity increases will determine delivery timelines for global semiconductor plants.