asml's euv monopoly faces headwinds: intel and samsung pull back

2025-04-03 asml

Amsterdam, Thursday, 3 April 2025.
asml, the sole provider of euv lithography machines, faces a stock downgrade by mizuho. the rating change came after intel and samsung signaled reduced investments. the anticipated cutbacks could hurt asml’s financials. the company’s euv technology is critical for producing advanced chips. despite its current market dominance, asml’s reliance on key customers makes it vulnerable to investment shifts. analysts project a potential decrease in euv shipments in 2026, highlighting concerns about long-term growth. the downgrade reflects broader worries about asml’s future business outlook and the impact of customer concentration.

mizuho’s downgrade and asml’s outlook

Mizuho downgraded ASML from buy to neutral, citing downside risks to the company’s 2026 business outlook [4]. The firm also lowered its price target for ASML to EUR 650, down from EUR 810 [4]. This revision reflects concerns that ASML’s revenue could decline by 3% year-over-year in 2026, with minimal earnings per share growth [4]. The downgrade highlights potential challenges for ASML despite its leading position in EUV lithography [1][2].

impact of customer investment decisions

The downgrade is attributed to anticipated reduced investments from key customers like Intel and Samsung [1]. Mizuho anticipates limited upside potential from Samsung and Intel in 2026 [4]. ASML’s reliance on a concentrated customer base, particularly TSMC, is seen as a factor that could increase business volatility [4]. This customer concentration makes ASML susceptible to shifts in capital expenditure plans of major semiconductor manufacturers [1].

euv shipment forecasts and tsmc’s role

Mizuho projects a decrease in ASML’s total EUV shipments from 53 units in 2025 to 49 units in 2026 [4]. While TSMC’s N2 monthly production capacity is expected to increase significantly from 2024 to 2026, EUV shipments to TSMC could decline from 18 units in 2025 to 15 units in 2026, according to Mizuho’s estimates [4]. This shift suggests a possible adjustment in the timing of EUV deployments by TSMC, impacting ASML’s revenue stream [4].

china’s demand and valuation concerns

Despite an anticipated 35% decrease in revenue from China in 2025, which is an improvement from the previously expected 45% decrease, Mizuho expects ASML’s revenue and gross profit margin to reach or slightly exceed the high end of guidance in the first quarter of 2025 due to strong demand from China [4]. Mizuho’s price target is based on a projected price-to-earnings ratio of 25 for 2026-27, aligning with the historical average [4]. Factors influencing this valuation include EUV demand, wafer fabrication equipment cycles, and costs [4].

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euv lithography stock downgrade