ASML to reap benefits from demand from Low-NA EUV adoption
Investing.com -- Semiconductor equipment giant ASML is expected to benefit more from strong demand for existing EUV lithography systems than from the industry’s next-generation High-NA technology over the next several years, according to a new research report from BofA Securities.
The firm reiterated a “Buy” rating on ASML shares and raises the company’s price target to €1,710 from €1,598, citing stronger-than-expected growth in Low-NA EUV tool shipments and improving earnings forecasts.
While High-NA EUV lithography promises significant improvements in chip manufacturing precision, analysts believe widespread adoption will be slower than previously expected because of technical and design challenges.
The report said that memory chipmakers such as Samsung and SK Hynix are likely to adopt High-NA systems first, potentially beginning in 2028, while Taiwan Semiconductor Manufacturing Company (TSMC) may delay adoption until around 2032 at its A10 node.
Researchers identified major hurdles including “stitching” issues caused by reduced exposure field sizes, new design constraints, and integration complexity for large AI chips. These challenges are especially problematic for advanced logic chips that approach reticle-size dimensions.
Instead of relying on High-NA adoption, ASML’s near-term growth is expected to come from rising demand for existing Low-NA EUV systems used in advanced logic and DRAM production.
BofA raised its forecast for Low-NA EUV tool shipments to 65 units in 2026, 85 in 2027, and 87 in 2028, up from earlier projections of 62, 81, and 75 units respectively.
The analysts predicts strong demand from TSMC, Samsung, Intel, Micron, and SK Hynix as semiconductor companies expand advanced chip manufacturing capacity and increase EUV layer usage in AI processors and high-bandwidth memory.
BofA increased ASML’s earnings-per-share estimates by up to 14.5% for 2028, forecasting EPS of €33.2 in 2026, €46.5 in 2027, and €58.1 in 2028. Revenue estimates were also raised, with projected 2028 revenue now approaching €57.8 billion.
The analysts argued that ASML does not need an accelerated High-NA rollout to sustain strong growth, pointing instead to increasing Low-NA productivity, service revenue, and the company’s dominant market position in EUV lithography.