ASML Holding N.V. (NASDAQ:ASML) is examining ways to produce more than 110 EUV lithography systems in 2028, according to JPMorgan analysts following a meeting with CFO Roger Dassen. The company is already nearly sold out for 2027 and expects to produce at least 80 EUV systems that year, meaning output above 110 in 2028 would represent at least a 37.5% increase from the 2027 level. JPMorgan said the main constraint has shifted toward assembly speed rather than the availability of critical components, suggesting ASML believes additional capacity can be unlocked through manufacturing and assembly improvements.
The potential increase is being driven primarily by AI-related demand. ASML’s existing EUV machines, which cost roughly $200 million each, are essential for manufacturing leading-edge AI processors, while customers including TSMC, Samsung, SK Hynix and Intel are expanding advanced-chip capacity. Reuters reported separately that virtually all of ASML’s EUV production capacity is booked through 2027, while the company has begun construction of a new Eindhoven facility designed to accelerate tool assembly and eventually accommodate up to 20,000 workers.
Higher EUV Output Could Accelerate ASML’s Revenue and Cash Flow
The strongest bullish implication is that ASML Holding N.V. may be able to convert exceptionally strong demand into higher unit volumes rather than simply relying on price increases. Moving from at least 80 EUV systems in 2027 to more than 110 in 2028 would materially expand the number of high-value systems ASML can monetize. This comes after the company already raised its 2026 revenue outlook to €43 billion–€45 billion, compared with its previous €36 billion–€40 billion range, while targeting a 54%–56% gross margin. Reuters also reported that second-quarter revenue reached €9.3 billion with a 54% gross margin, demonstrating that stronger AI-driven demand is already translating into financial performance.
The longer-term competitive position is particularly favorable because ASML Holding N.V. effectively has no commercial competitor in EUV. JPMorgan estimates that ASML held 94% of the overall lithography market in 2025, while Reuters describes the company as having maintained a monopoly in EUV since the late 2010s. At the same time, customers are committing to ASML’s next-generation High-NA technology: the machines cost approximately $400 million, can print features about 40% smaller than existing EUV systems, and TSMC, Samsung, and SK Hynix have all established plans for production adoption. If AI chip demand remains strong enough to support both higher low-NA volumes and eventual High-NA adoption, ASML could see a multi-year increase in system shipments, revenue, and potentially cash generation while strengthening its already exceptional competitive moat.
ASML’s Growth Ambitions Face Geopolitical and AI-Cycle Risks
The principal risk is that ASML Holding N.V. is expanding capacity into an AI investment cycle whose sustainability remains uncertain. Reuters noted that ASML’s shares had already risen about 60% in 2026 by July and were trading at roughly 38 times expected 2027 earnings, leaving substantial future growth embedded in the valuation. Analysts have specifically warned that any cooling in hyperscaler spending would flow through to ASML’s earnings. Producing more than 110 EUV systems in 2028 would therefore be highly positive only if customers actually maintain or increase their capital spending; if AI infrastructure investment slows, greater capacity could instead create utilization and margin pressure.
There is also a meaningful execution and geopolitical risk to the expansion. ASML Holding N.V. is simultaneously trying to accelerate assembly, expand its facilities and coordinate with customers as the semiconductor industry ramps capacity. Reuters reported that the new Eindhoven site will not complete its first phase until 2029, meaning much of the near-term increase must come from optimizing existing production infrastructure. Meanwhile, China remains a structural exposure: ASML expects China to account for around 20% of sales in 2026, and proposed U.S. restrictions could further constrain sales and servicing there. Even if EUV demand remains robust, tighter export controls could limit ASML’s addressable market and reduce the flexibility to redeploy capacity if demand patterns change.
Conclusion
ASML Holding N.V.’s potential increase to more than 110 EUV tools in 2028 is net bullish, reflecting strong AI-driven demand, capacity constraints, and its dominant EUV position. However, its premium valuation and reliance on sustained AI chip spending leave the stock vulnerable if semiconductor capital expenditure slows. Overall, the growth opportunity outweighs the risks, but expectations are already high.
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This article is originally published at Insider Monkey.
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