--- title: "ASML: AI fever is on—Is the litho selloff a head fake?" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/39928768.md" description: "ASML released its Q1 2026 results (through Mar) before the U.S. market open on Apr. 15 (Beijing time). Key takeaways: 1) Revenue & GPM:a) $ASML(ASML.US) reported revenue of €8.77bn (+13% YoY), in line with market expectations (€8.7bn). Growth was driven by EUV demand from Korean customers and higher service revenue.b) GPM was 53%. That is the top end of the 51–53% guidance range..." datetime: "2026-04-15T10:59:40.000Z" locales: - [en](https://longbridge.com/en/topics/39928768.md) - [zh-CN](https://longbridge.com/zh-CN/topics/39928768.md) - [zh-HK](https://longbridge.com/zh-HK/topics/39928768.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # ASML: AI fever is on—Is the litho selloff a head fake? ASML released its Q1 2026 results (to Mar 2026) pre-market on Apr 15 Beijing time. Key takeaways below. **1) Revenue & GPM: a)**$ASML(ASML.US) **reported revenue of €8.77bn, +13% YoY, in line with cons. (€8.7bn)**. Growth was driven by stronger EUV demand from Korean customers and higher service revenue. **b)** **GPM was 53%, at the top end of guidance (51–53%),** helped by a higher mix of services, which carry higher margins. **2) Opex & Profit:** Net income came in at €2.76bn, +17% YoY, implying a 31% NIM. Lower opex ratio this quarter supported the NIM uplift. **3) Segment details:** **Lithography systems revenue was €6.3bn, +9% YoY**; **services revenue was €2.5bn, +24% YoY**. **The mix was roughly 70:30**. Top-line growth was led by services, while lithography system growth was slower. **1) Lithography systems revenue:** **EUV and ArFi were the major revenue drivers**, accounting for nearly 89% combined. EUV revenue was ~€4.1bn, while immersion DUV (ArFi) was ~€1.4bn. These two remain the core of system sales. **2) Lithography system shipments:** ASML shipped 16 EUV units in the quarter, up by 2 QoQ, mainly to Korean memory customers. ArFi shipments were 17 units, down 20 QoQ, largely due to shifting procurement from Mainland China. This divergence reflects different regional demand patterns. **3) Lithography ASPs: EUV pricing is well above ArFi.** **Dolphin Research estimates EUV ASP at ~€260mn and ArFi at ~€85mn per unit,** keeping the price ratio near 3:1. Future High-NA EUV mix could lift blended EUV ASPs further. **4) ASML core watchpoints:** **a. Regional revenue:** Korea was the largest contributor at 45% (~€3.95bn). **Mainland China contributed ~€1.67bn, or 19%,** below the previously cited '25%' share. Mix reflects stronger memory capex in Korea. **b. Orders:** Order intake was not disclosed in this print. **New orders were €13bn last quarter, with management noting most are for 2027,** so watch the call for any color. Order visibility remains a key leading indicator. **5) Guidance:** Q2 2026 revenue guided at €8.4–9.0bn (below cons. €9.1bn) and GAAP GPM at 51–52% (below cons. 52.5%). Full-year 2026 guidance was raised. **Management lifted FY26 revenue guidance to €36–40bn, +10–22% YoY, with full-year GPM at 51–53%.** This reflects confidence in demand recovery and customer capex plans. It also aligns with prevailing sell-side expectations. **Dolphin view: FY guide provided; near-term prints matter less. Focus on orders.** **ASML’s print was decent but uninspiring,** as revenue and margins met guidance without a clear beat. Growth was driven by EUV demand from Korean memory makers and a stronger services contribution. The mix favored higher-margin services. **Versus the quarterly numbers, the market cares more about orders and forward commentary:** **① Orders:** The company did not disclose order intake this quarter. Last quarter, net new orders were €13bn, mostly from memory customers and largely for 2027 shipments. Updates on the call will be important. **Orders are a leading indicator for ASML’s revenue,** so watch whether management shares specifics later (cf. Dolphin Research call notes). Any shift here would influence sentiment. **② Forward guidance:** Management guided Q2 revenue to €8.4–9.0bn, below the €9.1bn consensus. **Given that FY26 guidance is now set, the next-quarter guide carries less weight.** Investors will anchor on the FY range. **FY26 revenue was raised to €36–40bn (from €34–39bn), +10–22% YoY, underscoring confidence in operations.** Major houses had already lifted their FY growth ranges to 10–25%, so this is broadly in line. The update validates prior expectations. **Guidance implies growth is back-half weighted, with H2 revenue likely €18–22bn vs. sub-€9bn per quarter in H1,** suggesting wafer fab capex will also skew to H2. This timing aligns with customer project ramps. **On Apr 2, 2026, the U.S. Congress introduced the MATCH Act to formalize and accelerate U.S.–Netherlands–Japan coordination on advanced semi equipment export controls,** aiming to plug existing gaps. This would tighten the framework for tool shipments. The bill explicitly adds **immersion DUV scanners and associated services to the control list, mainly targeting capacity adds for sub-7nm logic and memory in Mainland China.** The bill is at the proposal stage and not yet law, **but it could pull forward DUV procurement by Chinese customers to preempt restrictions.** Timing risk bears watching. Beyond ASML’s print, the market is focused on the following: **a) Downstream capex: leading indicator** Foundries like TSMC, Intel, and Samsung are ASML’s key customers. Their capex outlooks are leading indicators for ASML’s revenue trajectory. Capex signals drive orders before shipments. Aggregating guidance from core customers, **Dolphin Research estimates 2026 capex growth of ~20% for logic and ~60% for memory.** Growth is led by TSMC and memory makers, the primary beneficiaries of the AI capex cycle. This underpins tool demand. **b) High-NA EUV progress: the next-node enabler** **As leading-edge nodes move below 2nm, High-NA EUV will become a core tool for the next phase.** TSMC and Intel have both purchased High-NA EUV for next-gen R&D and early production. This sets the stage for future ramps. Based on company specifics, Dolphin Research expects TSMC’s early 2nm and Intel’s 18A to rely on Low-NA EUV to ensure yields. **High-NA EUV tools are mainly for TSMC’s post-2nm nodes and Intel’s 14A R&D and pilot runs, with shipment peaks from 2027 onward,** subject to customer mass-production timing. The slope depends on process readiness. ASML’s current market cap (~$598bn) implies ~40x FY26 PE on after-tax core profit (assumptions: +20% revenue YoY, 52.6% GPM, 17.2% tax, EUR/USD = 1.2). **Historically, ASML has mostly traded in the 30x–45x PE range, putting today near the midpoint.** Valuation reflects its unique positioning. With the new FY26 guide of €36–40bn (+10–22% YoY), growth is largely supported by higher capex from TSMC and memory makers. Even after strong growth in 2026, increased adoption of High-NA EUV for sub-2nm nodes (per-unit ~€200mn → ~€400mn) should continue to drive earnings. The product cycle offers multi-year leverage. At this stage, both TSMC and ASML offer relatively high visibility within the AI supply chain. **Versus TSMC’s ~25x PE, ASML trades richer due to its stronger monopoly characteristics as the sole global EUV supplier.** This premium looks structurally supported. While orders were not updated this quarter, the €38.8bn backlog at last quarter-end underpins forward growth. **Also watch whether management provides any order updates in subsequent communications (cf. Dolphin Research notes).** Clarity here would aid sentiment. **The reported figures were broadly as expected and mark the first time ASML did not directly disclose quarterly orders in the release.** If the call also lacks specifics, that would be a mildly negative signal for near-term sentiment. Still, medium-term drivers remain intact. Guidance suggests a muted H1 but a stronger H2. ASML is benefiting from the AI capex upcycle now, with the High-NA EUV cycle to follow from 2027. The dual cycles support sustained growth. Under the combined impact of these cycles, ASML retains its 'relative certainty.' From H2, earnings should inflect higher, and PE could move above the mid-range. Execution will be key to rerating. Below is Dolphin Research’s detailed take on ASML: **I. Core metrics: Slightly higher FY guide; orders undisclosed** **1.1 Net orders:** As a capex equipment name with long lead times, orders are placed well in advance and rarely canceled. Order momentum often drives the stock more than revenue. **ASML’s order flow typically wields more influence on the share price than revenue.** With memory and logic customers lifting capex, this may not translate into immediate shipments but will show up in orders. Watch for updates on the call. **However, the company did not disclose orders in this print.** Prior patterns suggest stronger additions from memory customers, aligning with higher capex at the Big Three memory makers. Management commentary later today will be in focus for any order color. This is the main near-term swing factor. **1.2 Revenue:** **ASML delivered €8.77bn in Q1 2026 revenue, +13% YoY, in line with cons. (€8.7bn).** Growth was driven by Korean memory demand for EUV and services. Mix skewed toward higher-margin lines. **Management raised the FY26 revenue outlook to €36–40bn (from €34–39bn), broadly matching the Street.** This formalizes earlier indications from customers. It sets expectations for a H2-weighted year. **With a clear FY guide in place, quarterly guides carry less impact.** Taken together, growth is concentrated in H2. H1 remains a transition period. **1.3 GP & GPM:** **Q1 2026 gross profit was €4.65bn, +11% YoY.** **GPM was 53%, up 80bps QoQ and at the top end of the 51–53% guide,** mainly due to a higher share of services. Mix and utilization supported margins. **1.4 Net income:** **Q1 2026 net income was €2.76bn, +17% YoY, with a 31% NIM.** Opex increased in absolute terms, with the opex ratio around 17%. Discipline supported profitability. **Given the explicit FY26 guide of €36–40bn revenue and 51–53% GPM,** the quarterly print has limited incremental impact. Growth in 2026 is primarily tied to higher capex at TSMC and memory makers. Backlog and product cycles de-risk the outlook. In the current AI capex cycle, ASML remains a 'high-visibility link' in the chain. **With €38.8bn backlog at last quarter-end and the upcoming High-NA EUV cycle,** earnings should continue to grow. Multi-year drivers remain intact. **II. Segment detail: EUV up, memory demand rising** ASML’s business comprises system sales and services. **Lithography systems account for roughly 70–80% of revenue, with services the main growth driver this quarter.** The service mix also supported margins. **2.1 By business line** **1) System sales:** **Q1 2026 system revenue was €6.28bn, +9% YoY,** driven by increased EUV shipments to Korean customers. Demand tracked memory capex. System sales correspond to 'lithography scanners,' **with EUV and ArFi contributing nearly 90% combined.** These remain the core categories. Breakdown as follows. **a) EUV:** Revenue was €4.1bn, +29% YoY. **Shipments were 16 units, with ASP around €260mn,** and higher High-NA mix should lift ASPs further. Technology maturity is improving. By product: **① Low-NA EUV (NXE:3800E) has matured,** with throughput rising from 220 wph to 230 wph, and NXE:3800F reaching 260 wph. **② High-NA EUV (EXE series)** is being purchased for next-gen R&D, with volume shipments expected after 2026. Ramps hinge on customer node timing. **b) ArFi:** Revenue was €1.4bn, -24% YoY, mostly from Mainland China. **Shipments were 17 units, with ASP around €85mn.** Demand was softer QoQ. Under the MATCH Act proposal, **immersion DUV scanners and related services would be added to export controls, targeting sub-7nm logic and memory capacity in Mainland China.** The bill is not yet law, but Dolphin Research expects potential pull-ins of ArFi DUV in Q2–Q3, which could lift ArFi shipments. Timing risk may front-load demand. With the memory upcycle, all three major memory makers are stepping up capex. **Memory’s share in lithography system revenue rose to ~50% this quarter.** This mix shift favors EUV. **2) Services:** **Q1 2026 service revenue was €2.5bn, +24% YoY.** Services include maintenance and related items and are less cyclical. They provide a stable earnings base. **Over the long run, services are relatively stable at ~€2.0–2.5bn per quarter.** As system shipments rise with demand, the service mix will likely normalize lower. The line should still grow with the installed base. **2.2 By region** Q1 revenue was primarily from Taiwan, Mainland China, Korea, and the U.S., which together accounted for over 90%. These regions reflect customer fab locations. Korea was the largest at 45%, driven by higher memory capex from Samsung and SK Hynix and associated EUV demand. This underpinned shipments. Mainland China revenue was ~€1.67bn, or 19%, below the previously mentioned 25% share in order structure. **If the MATCH Act progresses, ArFi DUV pull-ins in Q2–Q3 could lift China’s share,** as customers seek to avoid future restrictions. Regional mix may thus rebound. **ASML reports regional revenue on a 'ship-to' basis.** As TSMC lifts 2026 capex to $52–56bn, not all spend will show up in Taiwan; U.S. fab spending could lift both Taiwan and U.S. shares. Ship-to geography will track fab build-outs. **Overall, while Q1 and Q2 guides look subdued, the FY outlook reduces the importance of near-term prints.** Investors will focus on execution against the FY range. H2 remains the key swing period. **For 2026, the company guides revenue of €36–40bn (vs. prior €34–39bn), +10–22% YoY.** The higher guide signals confidence and broadly matches mainstream expectations. This should anchor estimates. **With FY growth now explicit, the market’s focus shifts to forward growth drivers, notably orders as a lead indicator.** Orders were not disclosed this quarter, so attention turns to management’s updates on the call. Visibility here will shape sentiment. Compared with TSMC, ASML enjoys a more pronounced monopoly in its market (lithography systems). Higher downstream fab capex inevitably translates into ASML revenue over time, forming the base for continued growth. Order flow converts to shipments with a lag. **Guidance implies 2026 growth is H2-weighted, driven by higher capex at TSMC and memory makers.** Combined with the next-node ramps, ASML’s High-NA cycle should extend the upturn. This supports a more durable earnings trajectory. Related research from Dolphin Research on ASML Jan 28, 2026 call notes: '[ASML (Trans): Guide constrained by fab build timing; most new orders are for 2027](https://longportapp.cn/zh-CN/topics/38193632)' Jan 28, 2026 earnings take: '[ASML: Memory orders surge; a super-cycle for litho tools?](https://longportapp.cn/zh-CN/topics/38175670)' Oct 15, 2025 call notes: '[ASML (Trans): 2030 targets intact; next-quarter to update next-year outlook](https://longportapp.cn/zh-CN/topics/35257885)' Oct 15, 2025 earnings take: '[ASML: AI capex adds a buff; worst is over](https://longportapp.cn/zh-CN/topics/35229785)' Jul 16, 2025 call notes: '[ASML (Trans): Focused on tool productivity, not unit count](https://longportapp.cn/zh-CN/topics/31883128)' Jul 16, 2025 earnings take: '[ASML: NVDA is hot, but litho demand still tepid?](https://longportapp.cn/zh-CN/topics/31854133)' Apr 16, 2025 call notes: '[ASML (Trans): Even if tariffs land, we should not be the main payer](https://longportapp.cn/zh-CN/topics/28981708)' Apr 16, 2025 earnings take: '[ASML: Orders slide rings the alarm; tariffs could add pressure](https://longportapp.cn/zh-CN/topics/28972367)' Jan 29, 2025 call notes: '[ASML: Mainland China revenue to settle near 20% (4Q24 call)](https://longportapp.cn/zh-CN/topics/26879259)' Jan 29, 2025 earnings take: '[ASML: The leader is back, and the anchor returns](https://longportapp.cn/zh-CN/topics/26861740)' Risk disclosure and disclaimer: [Dolphin Research disclaimer and general disclosure](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [ASML.US](https://longbridge.com/en/quote/ASML.US.md) - [TSM.US](https://longbridge.com/en/quote/TSM.US.md) - [INTC.US](https://longbridge.com/en/quote/INTC.US.md) - [SSNGY.US](https://longbridge.com/en/quote/SSNGY.US.md) - [04335.HK](https://longbridge.com/en/quote/04335.HK.md)