The AI Boom Isn't Slowing Down: ASML's Strong Sales Growth Outlook

The demand for artificial intelligence (AI) continues to surge, and ASML Holding N.V. (ASML), the world's leading supplier of photolithography equipment, is well-positioned to capitalize on this trend. At its 2024 Investor Day, ASML provided an update on its long-term strategy and global market trends, confirming potential 2030 scenarios for annual revenue between approximately €44 billion and €60 billion, with a gross margin of between approximately 56% and 60%. The company expects an average sales growth rate of 8% to 14% over the next five years, driven by the increasing demand for AI chips and the emergence of AI as a significant opportunity for the semiconductor industry.

ASML's President and CEO, Christophe Fouquet, stated, "We expect that our ability to scale EUV technology into the next decade and extend our versatile holistic lithography portfolio positions ASML well to contribute to, and leverage the AI opportunity, and allows ASML to deliver significant revenue and profitability growth." The company's strong industry partnerships and commitment to sustainability are essential to its overall success and will help maintain its leadership position in ESG sustainability.

The long-term outlook for the semiconductor industry remains promising, given the role of semiconductors as mission-critical enablers of multiple megatrends across society. In addition to the growth potential of several important end-markets, ASML believes that the emergence of AI creates a significant opportunity for the semiconductor industry, thanks to the potential that AI brings as the next big driver of productivity and innovation across wider society. These developments are expected to help fuel global semiconductor sales to over $1 trillion by 2030, which translates into an annual semiconductor market growth rate of approximately 9% in the period 2025-2030.

ASML's strong industry partnerships are essential to its overall success, and the company continues to work together with industry and the community to maintain a leadership position in ESG sustainability. Webcast and presentations from the Investor Day can be found on the ASML website, with the link to the live webcast available on the day of the event (no pre-registration required). The presentations and a recording will be made available afterwards on asml.com.

ASML's strong sales growth outlook is supported by the growing demand for AI chips and the company's technological leadership in advanced lithography. The company's EUV technology is unmatched, allowing chipmakers to print smaller features with greater precision, enabling next-generation semiconductor devices. This technology is crucial for producing advanced AI, 5G, and high-performance computing chips. ASML's EUV lithography machines, which cost up to €350m per unit, are essential for manufacturing the high-performance chips that power AI systems.

The key AI applications driving demand for ASML's lithography systems are primarily in the areas of server, data center, and storage, as these are the three main sectors expected to benefit the most from the AI wave. These applications require advanced semiconductors, which can only be produced using ASML's high-precision lithography machines. The growing demand for AI chips, fueled by these applications, is a significant driver of ASML's sales growth.

ASML's strategic partnerships with major chip manufacturers like TSMC, Intel, and Samsung play a crucial role in driving its sales growth in the AI sector. These partnerships enable ASML to supply its advanced lithography systems, including extreme ultraviolet (EUV) technology, which are essential for manufacturing high-performance chips required for AI applications. ASML's EUV technology is a key enabler for the semiconductor industry, allowing chipmakers to produce smaller, faster, and more efficient chips, which is vital for driving advancements in AI, autonomous systems, and high-performance computing.

In conclusion, the demand for AI remains strong, and ASML expects an average sales growth rate of 8% to 14% over the next five years. The company's technological leadership in advanced lithography, strong industry partnerships, and commitment to sustainability position it well for continued growth and industry dominance in the AI-driven semiconductor market. Investors seeking exposure to the semiconductor sector's structural growth, driven by advancements in AI, 5G, and high-performance computing, should consider ASML as a strong investment opportunity.