CEO Christophe Fouquet said on the earnings call that concerns about China developing competing lithography tools have persisted for 25 years, but the underlying facts have not changed.
- Fouquet noted that restrictions on Chinese companies’ access to ASML’s equipment could increase their motivation to develop domestic alternatives.
- However, despite that push, he noted that significant technological hurdles would remain.
- CFO Roger Dassen said he expects China to account for around 20% of ASML’s systems revenue in 2026, driven by demand for mainstream logic and memory chips.
ASML Holding (ASML) CEO Christophe Fouquet said the likelihood of China developing a major competitor to the Dutch semiconductor equipment maker remains low on the company’s third-quarter earnings call.
“I think that the likelihood of a major competition in China is still pretty low,” Fouquet said. “We have been having this discussion about China having a tool to compete with us for the last 25 years.”
Fouquet said restrictions on Chinese companies’ access to ASML’s equipment could increase their motivation to develop domestic alternatives, but noted that catching up would remain a long process.
“If they were to not have access to some of our tools, then you get a lot more motivation, but it’s still a very, very long way to go.”
– Christophe Fouquet, CEO, ASML
ASML Q3 Beats Estimates, Revenue Falls Short
ASML reported third-quarter (Q3) revenue of $13.05 billion, slightly below analyst expectations of $13.12 billion, according to Koyfin. Earnings per share (EPS) of $13.23 came in ahead of the estimated $12.05 billion by Wall Street.
ASML stock was down 1.5% at the time of writing, amid broader market weakness resulting from hotter-than-expected consumer price index (CPI) annual figures. Retail sentiment around the firm on Stocktwits remained in ‘extremely bullish’ territory over the past day.
Platform data showed an over 300% increase in message volume in the last 24 hours, with an over 2,800% jump in chatter over the past seven days in the run-up to the earnings.
ASML Expects Strong Demand From China
While Fouquet downplayed the near-term threat from Chinese equipment makers, he said demand for semiconductor manufacturing equipment in China remains strong, supported by domestic investment in chip production.
The company expects China to account for around 20% of its systems revenue this year, according to comments from Chief Financial Officer Roger Dassen on the call.
“The intrinsic demand in China is strong,” Dassen said, pointing to demand for mainstream logic chips and memory, as well as new fabrication plants coming online. “I would argue that also for 2027 and beyond based on the intrinsic drivers, it seems that the demand situation in China remains very strong,” he added.
ASML Works To Expand Capacity Amid Chipmaking Demand
Beyond China, ASML CEO said customers continue to seek more equipment, prompting the company to expand manufacturing capacity through 2028.
Fouquet did not provide updated capacity targets for 2027 and 2028 when asked by analysts, but said the company was working to increase output by optimizing its manufacturing footprint and shortening the time required to build its machines. “We continue to see customers asking for more tools,” he said.
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