ASML Q2 Earnings Preview: Capacity Likely Fully Booked, China Business Faces Export Control Pressure
N.R. Finch
ASML reports Q2 earnings Wednesday; analysts expect revenue up 14% to €8.8 billion and a possible full-year guidance raise — but a proposed U.S. law pushing allies to align China export controls puts the company's roughly 20% China revenue share at risk.
Why do analysts expect ASML to raise full-year guidance?
AI chip demand is surging. SK Hynix, Samsung, and Micron are racing to expand capacity; TSMC is still building out; Intel's recovery and Musk's TeraFab plan may add further orders.
Analysts project Q2 net profit up 8.8% year-on-year to €2.61 billion, revenue at €8.8 billion, and expect the company to raise its full-year guidance of €36–40 billion.
This means → downstream customers are expanding almost simultaneously, and ASML — the sole maker of EUV lithography tools (machines that etch chip circuits with extreme-ultraviolet light) — has exceptionally high order visibility.
Where is the capacity ceiling — and how can it be broken?
ASML plans to ship 60 EUV systems this year, 80 next year, with a theoretical cap of 90 — JPMorgan believes the actual number could reach 110.
Susquehanna analyst Mehdi Hosseini says ASML's capacity through end-2027 may already be fully booked; Morningstar analyst Javier Correonero forecasts 2030 sales of €60 billion, well above the company's own €44 billion floor target.
In plain terms = the machines are effectively sold out. ASML says that beyond 90 units it will explore "creative solutions": upgrading older tools, speeding assembly, and shortening installation cycles. It has also pre-secured extra supply from Zeiss (lenses) and Trumpf (high-power lasers).
Why has the China business become a flashpoint?
China is expected to account for roughly 20% of ASML's sales this year, mostly from compliant purchases of lower-end DUV lithography tools — deep-ultraviolet systems, one generation below EUV — used in automotive, industrial, and consumer electronics.
ASML has denied selling its most advanced EUV equipment to China. Yet a proposed U.S. bill explicitly names ASML and would require allies to align export controls to curb China's advanced chipmaking capability.
This means → even though current sales are compliant, once such legislation passes, how much of that 20% revenue gets squeezed further is one of the key uncertainties heading into this earnings report.
Is a 49× forward P/E too expensive?
ASML shares are up nearly 70% year-to-date, giving the company a market cap of €610 billion (roughly $696 billion) — the most valuable listed company in Europe. The stock trades at about 49× estimated 2027 earnings.
KBC analyst Thomas Kufleur says "most of the upside is already priced in" and maintains a "hold" rating.
But ING analyst Marc Hesselink notes ASML has underperformed the Philadelphia Semiconductor Index this year. "Strong results plus further capacity expansion could support a catch-up rally," he says.
Which two numbers matter most in this report?
First: EUV delivery guidance — whether the 90-unit theoretical cap can be broken directly determines the revenue ceiling for the next two years.
Second: China revenue share trajectory — as export-control legislation advances, how much of that 20% share shrinks, and what management says about it.
In plain terms = one tests whether supply can keep up with demand; the other tests whether policy will cut off a chunk of revenue. Where those two lines cross is the answer to whether ASML's valuation can hold.
Content is for reference only, not financial advice.