Source: Analysis by eToro market analyst Jean-Paul van Oudheusden, editorially edited and enriched for Baaz.

Why is the demand for AI chips rising so quickly?

The global rise of AI is accelerating at a rapid pace. Companies are investing massively in computing power, data centers, and specialized chips to remain competitive. Where AI was once primarily a topic for tech companies, it now affects almost every sector.

The reason is clear: applications such as machine learning and generative AI require enormous amounts of computing power. As a result, the demand for advanced chips is growing faster than supply can keep up. This creates structural scarcity in the market.

What is ASML's role in the chip industry?

ASML plays a unique role in the global chip production. The company is the only manufacturer of EUV machines, essential for making the most advanced chips.

Without these machines, chip manufacturers like TSMC and Samsung cannot produce modern AI chips. Thus, ASML is a crucial link in the entire chain.

The demand for these machines continues to exceed supply. Therefore, ASML is increasing its production capacity:

• from at least 60 EUV machines in 2026
• to at least 80 machines in 2027

This scaling forms the basis for higher long-term objectives.

Why are tech companies massively investing in chip capacity?

In the global AI race, major technology companies are significantly increasing their investments. A significant portion of those budgets goes to chip production and thus indirectly to ASML.

This involves both memory chips and computing chips. Especially with computing chips, a clear shift is visible: manufacturers are switching to 2-nanometer technologies to make AI models faster and more efficient.

Due to the scarcity, buyers are also willing to commit for longer periods. This gives ASML the certainty to further invest in production capacity.

What does the chip shortage mean for companies?

The limited availability of chips has direct consequences for organizations that depend on IT and AI.

Companies face:

• higher costs for hardware and cloud
• longer delivery times
• less flexibility in IT choices

Therefore, more and more organizations are securing capacity through long-term contracts. IT is thus shifting from an operational choice to a strategic factor.

Why is ASML seen as a bottleneck?

The capacity of ASML largely determines how quickly the chip industry can grow. In the sector, the company is seen as a bottleneck.

By 2030, a production of about 100 EUV machines per year is expected. Due to long-term investments from parties like Microsoft, Google, OpenAI, and Anthropic, that number may possibly increase even further.

ASML itself is currently maintaining its revenue target of 44 to 60 billion euros in 2030, but an increase in the lower limit seems likely according to analysts.

What does ASML's growth mean for investors and companies?

For investors, the picture is mixed. On one hand, an annual revenue and profit growth of about 15 percent until 2030 is becoming increasingly likely. This underscores the structural demand for chip technology.

On the other hand, the valuation has risen sharply. The stock is currently trading at about 50 times the expected earnings, well above the historical average.

Additionally, the short-term outlook has been less convincing. The revenue forecast of 8.4 to 9.0 billion euros for the current quarter was slightly disappointing, causing investors to remain cautious for now.

For companies, the structural trend is particularly relevant: the dependence on chip capacity is increasing, and thus the strategic impact of players like ASML is also growing.

How is the chip market developing towards 2030?

The demand for advanced chips is expected to continue growing. AI applications are becoming more complex, data volumes are increasing, and the need for computing power remains high.

At the same time, the importance of the so-called 'installed base' is growing: all machines that are in use worldwide. As that base grows, so do the revenues from maintenance and upgrades. Those margins are higher than from the sale of new systems.

This makes ASML's business model more stable and strengthens the company's position in the chain.

Conclusion: chip capacity becomes a strategic factor

The combination of AI growth and limited production capacity is changing the rules of the game. Access to chips is becoming increasingly important for innovation and competitiveness.

ASML plays a key role in this. The company indirectly determines how quickly new technology becomes available and how much capacity is available worldwide.

For organizations, the challenge lies not only in applying AI but especially in making the right strategic choices. In a market with scarcity, technology itself becomes a competitive factor.