Europe’s largest chip maker ASML expects AI demand to boost growth until 2030

Europe’s most valued tech company, Advanced Semiconductor Materials Lithography (ASML), projects average sales growth between 8% and 14% from now through 2030. The firm is banking on the AI market to sustain its surge throughout the period. 

CEO Christophe Fouquet said in a statement that the company’s ability to scale EUV puts it in a position to contribute to AI and take advantage of its economic opportunities. ASML is the sole supplier of Extreme Ultraviolet Lithography (EUV) machines, which are used to create the most advanced AI chips.

The company forecasts €44-60 billion ($46-$63 billion) in revenue by 2030, with margins up to 60%. However, it expects revenue from China to drop by 20% in 2025 despite adding over 40% to sales revenue in the past six quarters. Due to U.S. export restrictions, which will begin under the Trump administration alongside curbs from the Dutch government, it can’t sell its EUV and chip-making equipment to companies in China.

ASML economic prospects in the AI market

ASML specializes in manufacturing equipment used to build semiconductors and is the largest supplier in the world. Its biggest customers are Intel, Samsung, and TSMC, the world’s largest AI chip manufacturer. 

The demand for ASML machines continues to grow, as does the demand for advanced AI chips. With a market cap of about $397 billion and revenue of €27.56 billion, it is the 31st largest company in the world.

In the past 10 years, the company’s revenue has surged about 266%. It made about €7.5 billion in sales in the previous quarter, up about €6.2 billion from the year before. Analysts expect a compounded annual revenue growth of about 10% and an operating income expansion of about 15% between 2025 and 2030.

ASML delivered the update ahead of its investor day in the Netherlands, where it expects sales to grow at a rate of 8%-14%. Analysts found this reassuring after its Q3 earnings fell short of expectations due to delayed orders from customers like Samsung and Intel, both of which have slowed down on their ambitions to develop AI chips. 

Kevin Wang of Mizuho Securities also has a positive outlook, noting that investors were expecting a cut in projections. “Management remains bullish on ASML’s sales and profitability growth,” he added.

Could ASML be the next trillion-dollar company?

ASML’s dominance in EUV and the AI-driven semiconductor market has justified projections about its potential to be a trillion-dollar company. It currently has a net income of $7.5 billion and would need to generate at least $25 billion in net income with a price-to-earnings (P/E) ratio of 40. 

ASML forecasts 8-14% annual growth, and a 50% net income margin is not feasible given today’s margins. 

However, ASML is uniquely positioned in the market because of its monopoly on EUV technology, which is crucial for AI chip production. Meanwhile, its rivals in China, such as Shanghai Micro Electronics Equipment (SMEE) and Yangtze Memory Technologies Corp (YMTC), have also struggled to compete due to technological gaps. 

While a trillion-dollar valuation may be ambitious, ASML’s market hold and projected growth make it a compelling long-term asset for investors, even if these milestones are elusive in the immediate term.