Chip Equipment Shortage: ASML Unable to Meet Market Demand Until 2028

Due to limited production capacity, chipmakers have pushed their equipment purchase order queues to 2030.

Due to the lack of production capacity, the chip manufacturers have extended the equipment purchase order queues to 2030.

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ASML has announced that with its current production plans, it will not be able to meet all the market demand for chipmaking machines in 2027 and 2028. The Dutch giant is trying to find a way to make more devices; However, the market's thirst is so high that some customers are already looking to sign contracts for 2029 and 2030.

According to a report from Bloomberg, the company has raised the floor of its revenue forecast for 2026 and announced the range of sales between 44 billion and 45 billion euros; The issue that caused its share value to reach 1551.60 euros in the Amsterdam Stock Exchange with a growth of 2.8%. ASML recently said it will increase its production capacity by about 30 percent for 2027 and is considering another 30 percent increase for 2028.

However, Christophe Fouquet, CEO of ASML, says the company is looking to increase capacity beyond these figures. According to Fouke, customers want more machines every day and insist on placing orders even for 2029 and 2030.

The announcement of this news happened right in a volatile week for the technology market. Recently, after Broadcom's CEO likened investor behavior to a high-risk "casino" environment, chip companies' stocks plummeted, and the Seoul Stock Exchange plunged a record 7 percent. Despite these concerns, ASML's order statistics are the strongest document to prove the real prosperity of this industry; Because the manufacturing and delivery of each of the most advanced devices of this company takes more than a year, and its order list is not based on the promise, but based on the definite payments of the chip giants.

Recent financial warnings point to the dangers of investment bubbles; For example, the International Monetary Fund has warned against cyclical financing models in the field of artificial intelligence, as investments lose value if projected revenues do not materialize. But buying a lithography device (optical equipment for printing circuit on a chip) is actually a physical purchase of an unrivaled production tool from the only company in the world that has the technology to manufacture it.

This absolute monopoly has made ASML the most valuable company in the entire European continent. The company's stock value has grown by 64% since the beginning of the year, and at its peak price in the summer, it was only 300 billion dollars away from crossing the market value of one trillion dollars; However, most of this jump occurred in the first half of the year and followed a slow and stable trend in the fall.

At the same time, ASML has started the construction of its second largest production complex, the first phase of which will be ready in 2029; It means exactly the same period of time that customers queued up to receive its pre-invoice.

My professional career in the world of technology goes back almost 10 years; The path that started with hardware, continued with software, and now continues as a technology reporter in Sefir Arjan. I am Javad and more than three decades have passed and in addition to the world of technology, I love movies and cinema, classic rock music and Real Madrid.