ASML lifts outlook on record AI chip orders but analysts query capacity
- Stronger-than-expected fourth-quarter bookings on AI chip demand
- Set to cut 1,700 jobs, 3.8% of staff, in Netherlands and US
- Raises 2026 sales outlook amid increased AI-related investments
- ASML shares surge then reverse late in the day
EINDHOVEN, Netherlands, Jan 28 (Reuters) – ASML (ASML.AS),reported record fourth-quarter orders and raised its 2026 outlook on Wednesday, although the giant chip equipment maker faced questions from analysts about whether it had the capacity to meet surging demand from AI chipmakers.
The Dutch company also announced 1,700 job cuts, some 3.8% of its staff, as part of a broader plan to shed 3,000 management posts and hire engineers to focus on innovation.
ASML’s orders exceeded expectations as the global chip market ramps up production capacity for the rollout of artificial intelligence and data centers, with demand rising for its machines, which dominate the process for printing AI chips.
Orders leapt to a record 13.2 billion euros ($15.8 billion), from 7.1 billion euros a year ago, beating Visible Alpha analyst forecasts of 6.32 billion euros.
OUTPUT CAPACITY HIKES AT BIG CLIENTS BOOST ORDERS
ASML CEO Christophe Fouquet said production-capacity hikes at clients from Taiwan’s TSMC (2330.TW), which makes chips for Nvidia (NVDA.O), to Samsung (005930.KS), and Micron (MU.O), were feeding through to orders.
He said,
Micron has been announcing a groundbreaking almost every week for the last few weeks.
”There, you have a direct translation basically into shipments for us,”
Europe’s largest company by market capitalisation is looking to reduce complexity and focus on innovation.
Fouquet said, adding:
We want to really boost, again, our engineering capability, our innovation engine,
“Our engineers told us that a lot of the time they spend is no longer on innovation, because the organisation has become so complex”.
After spiking more than 6%, ASML shares fell shortly before U.S. trading and were down 1.9% to 1,194 euros at 1700 GMT. The stock has risen some 30% in 2026 and trades at 46 times forecast 2026 earnings of 10.5 billion euros, LSEG data shows.
ASML also said it would buy back 12 billion euros ($14.32 billion) worth of shares through 2028.
Analysts said that the longer-term outlook remained steady, while ASML flagged a near $39 billion backlog at end-2025, raising questions about capacity as it looks to expand.
Nick Rossolillo of Chip Stock Investor, said:
We think the investment thesis remains unchanged,
Rossolillo added,
TSMC and the DRAM memory cabal are finally comfortable expanding their capacity, which is great for ASML this year and possibly into 2027, but we’re not touching any guidance here yet,
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ASML lifts outlook on record AI chip orders but analysts query capacity, source
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