Goldman Sachs sees additional EUV upside for ASML as capacity, demand visibility and High NA economics improve

Overview

This conference takeaway assesses ASML's capacity plans, lithography demand outlook, High NA roadmap and pricing economics. Goldman Sachs argues that management commentary reinforces a constructive view on EUV growth and profitability, while regulatory restrictions remain an explicit but likely limited near-term concern.

Core views

Goldman Sachs sees the newly announced facility as a potential source of further EUV upside. Management indicated that the site should come online around 2029-30 and initially focus on DUV production. In the report's view, that could free capacity at Veldhoven for EUV tools and allow EUV output to exceed the roughly 120-130 systems currently being evaluated. The demand backdrop appears supportive: EUV output is booked through next year, with some visibility into 2028, while customer prepayments support management's confidence in strong DUV unit growth over the next two years. The institution also points to strong customer-roadmap visibility, particularly in memory, where customers' multi-year agreements with their own customers add credibility to the demand trajectory. On High NA, management does not expect the recent initiative to develop 12-inch reticles to change the adoption cadence during this decade. Goldman Sachs nevertheless views the larger reticle as an important next-decade technical development because it can improve cost of ownership and throughput. For logic, it could reduce stitching, simplify design and shorten cycle times, alongside the separate trend toward higher-productivity platforms; memory applications should also benefit. Management does not expect an initial gross-margin headwind from the program and believes higher productivity can support higher prices under its value-based pricing model. Intel is using High NA on its 18A node in small volumes, Samsung has guided to 2028 high-volume manufacturing, and TSMC has indicated adoption by 2030. While management does not expect an immediate increase in High NA volume demand, Goldman Sachs expects Intel's production deployment and broader adoption, especially for DRAM, to support unit volumes from 2027 onward. The report argues that ASPs and gross margins should benefit from product mix, productivity gains and potential pricing rebalancing. ASML's value-based pricing approach has historically translated better throughput into higher ASPs while customers gain imaging and overlay performance. Goldman Sachs believes the company may have scope for a one-time price reset on products delivering unique customer value. Existing EUV purchase orders through 2028 would not be affected, and 2027 would not be affected because orders were already placed; however, new orders could lift the EUV ASP mix in 2028, with a greater contribution from repriced products over time. DUV lead times are shorter. Management said the 3800E Low NA tool contributes gross margin above the corporate average, while High NA is profitable on initial shipments. The 5200 High NA tool remains below corporate margins at low volumes, but profitability could improve with productivity and scale, potentially approaching the corporate average once annual shipments exceed about 20 systems. Regarding Match Act-related restrictions, Goldman Sachs takes no view on whether new restrictions will enter US law. If they do, it expects a lengthy process before incorporation into Dutch or Japanese law, implying limited impact next year. Restrictions could ultimately cover all DUV systems, including immersion, but the degree of implementation remains unknown. ASML believes additional restrictions would primarily shift manufacturing capacity for the rest of the world outside China rather than materially alter total tool demand. Goldman Sachs also emphasizes ASML's approximately 5,000-supplier ecosystem and more than two decades of immersion development across product generations, arguing that a new entrant would need many years to replicate a scalable immersion platform and would remain materially behind ASML's technology roadmap.

Analysis framework

Goldman Sachs synthesizes management comments from the conference with ASML's production capacity, customer order visibility, technology-adoption milestones, product profitability and regulatory implementation path. It then links these operating factors to EUV volumes, ASPs, gross margins and its target-price valuation.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Forward P/E multiple valuation

  The €2,200 target is based on a 32x blend of HCY27 and HCY28E P/E, applying an earnings multiple to the institution's forecast period.

• Industry AnalysisSupply-demand framework

  Lithography capacity and customer-demand analysis

  The report connects ASML's DUV and EUV production capacity, order bookings, customer prepayments and node-adoption plans to expected tool volumes and pricing.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ASML Holding (ASML.AS)

  Primary covered company; expected to benefit from EUV capacity upside, leading-edge demand visibility, High NA scaling and pricing support.

  Strengths

  EUV bookings through next year with some 2028 visibility; value-based pricing; an extensive immersion ecosystem; Low NA tool margins above the corporate average.

  Weaknesses

  High NA 5200 margins remain below corporate levels at current low volumes.

  Comparison

  The report cites Intel's small-volume 18A use, Samsung's planned 2028 high-volume manufacturing and TSMC's indicated adoption by 2030 as markers of customer adoption.

  Risks

  EUV delays, capex cyclicality, unfavourable market-share shifts, and potential new regulatory restrictions.

Key data

• 12-month price target€2,200Based on a 32x HCY27/HCY28E P/E multiple
• Closing price€1,497.60As of 9 Sep 2026 close
• Implied upside46.9%Versus the stated closing price
• Potential EUV outputBeyond c.120-130 systemsPotentially supported by DUV production at the new site freeing Veldhoven capacity
• High NA margin-scale thresholdAbove c.20 systems annuallyManagement indicated margins could approach the corporate average at this shipment level
• 2028E revenue€74,328.0mnGoldman Sachs forecast
• 2028E EBIT€35,861.5mnGoldman Sachs forecast
• 2028E EPS€78.52Goldman Sachs forecast

Impact & implications

Goldman Sachs believes ASML's capacity expansion and customer demand visibility support continued EUV growth, while High NA adoption and improved tool productivity can strengthen the longer-term earnings and margin profile. Potential regulatory restrictions remain a risk, but the report expects any near-term operational impact to be constrained by a lengthy implementation process.

Risks

• EUV delays could undermine the expected volume and earnings trajectory.
• Capex cyclicality could weaken demand for ASML's tools.
• Unfavourable market-share shifts are a risk to the investment view and price target.
• Potential Match Act-related restrictions could eventually extend to DUV systems, including immersion, although implementation remains uncertain.

What to watch

• Timing and initial DUV focus of the new facility expected around 2029-30, and whether it frees additional Veldhoven capacity for EUV.
• EUV order visibility beyond 2028 and DUV unit growth supported by customer prepayments.
• High NA production deployment, including Intel's 18A rollout, Samsung's 2028 HVM plan and TSMC's indicated 2030 adoption.
• Whether productivity gains, new EUV orders and any pricing rebalancing lift ASPs and gross margins from 2028 onward.
• The development and implementation path of potential US, Dutch and Japanese restrictions.