JP Morgan has concluded that consensus earnings estimates for ASML Holding NV (NASDAQ:ASML, XETRA:ASME), the Dutch semiconductor equipment maker that holds a global monopoly on extreme ultraviolet (EUV) lithography machines used to manufacture advanced chips, are materially too low and require significant upgrades for 2027 and 2028.
The bank's reassessment follows a shift in ASML's own messaging, which has moved from guiding cautiously on unit volumes to signalling that its manufacturing capacity is more flexible than previously communicated.
At its first-quarter results, ASML indicated it expected to ship at least 80 low-NA EUV tools in 2027, where low-NA refers to the standard generation of the technology as opposed to the newer and more expensive high-NA variant.
Since then, the company has indicated that its previously communicated capacity ceiling of 90 EUV tools is not a hard limit and that volumes can be expanded without constructing new cleanrooms.
JP Morgan identifies four routes through which ASML can achieve higher output: reducing manufacturing cycle times in the second half of 2027; repurposing cleanroom space currently used for research and development; diverting capacity earmarked for high-NA tools to produce additional low-NA units until high-NA demand accelerates; and reactivating fast-shipment protocols used during the Covid-era supply crunch if demand requires it.
The bank now believes ASML could deliver 110 or more low-NA EUV tools without additional building capacity, and has raised its own unit estimates to 90 tools as an initial step, flagging further upgrades as likely.
