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Management shared that customers are already asking to place orders for 2029 and 2030. This is a strong signal of how far ahead the world's major chipmakers must plan their factories, which rely entirely on ASML's lithography machines to print circuits onto silicon wafers.

For a long-term owner, this visibility is a major advantage. Because these machines are so complex and take so long to build, early interest in the next decade suggests that the massive spending on chip factories is not just a short-term burst, but a multi-year cycle that keeps ASML at the center of the industry.

Source: Market Watch

After ASML reported its October results, we updated our revenue and profit projections. We moved our rating from Watch to Buy. We added the company’s entry into chip packaging and its new partnership with TSMC on larger photomasks to what we track. We have also started accounting for how higher interest rates affect the value of high growth technology businesses.

ASML is reportedly working on its own hybrid bonding product, a specialized way of stacking and connecting chip layers to make them faster and more efficient. This technology is becoming vital as AI chips get more complex and traditional wiring reaches its physical limits.

While ASML is famous for the machines that print chip designs, this move would take it into the assembly and packaging phase of manufacturing. If successful, it would allow the company to capture more of the spending on high-end AI hardware, though it puts them in competition with Besi, a long-time partner in this specific field.

Source: Reuters

Taiwan is preparing to tighten its rules on exporting advanced AI chips to China to match recent US restrictions. As the home of TSMC, the world's largest chipmaker and a major ASML customer, Taiwan's trade policies directly affect how many advanced machines are needed.

This adds to the pressure on ASML's sales outlook. Because ASML makes the only machines capable of printing these restricted chips, any rule that stops its customers from selling the finished product eventually reduces the need for ASML to ship new equipment to those factories.

Source: Bloomberg Markets and Finance

The US is considering the Match Act, a new set of rules that would further limit the sale of older chip-making machines to China. These machines, known as DUV systems, are less advanced than the cutting-edge tools used for AI but still make up a large portion of the company's revenue.

China has historically accounted for about a quarter of the company's market. While the most advanced tools are already restricted, losing the ability to sell these older systems would remove a major source of steady cash. Management's public pushback suggests they see these potential rules as a real threat to their sales targets over the next few years.

Source: Reuters

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