ASML Launches High-NA EUV Into Commercial Production as UBS Lifts Target to €1,900

The semiconductor industry’s most expensive manufacturing tools are finally leaving the test lab. ASML chief executive Christophe Fouquet confirmed at a specialist conference that the company’s High-NA EUV lithography systems have entered commercial production, with the first finished chips expected to reach customers within months. The milestone sent the Dutch equipment maker’s shares up 2.8% on Wednesday to €1,295, bringing the year-to-date gain to roughly 31% and pushing the stock back toward its mid-May record high.

The High-NA machines, which cost around $400 million each — roughly double the price of earlier EUV systems — can shrink transistor structures by as much as 66%. That reduction is essential for fabrication processes below the two-nanometer threshold, a frontier both logic and memory chipmakers are racing to cross. Some customers have balked at the upfront investment, but Fouquet argues the equipment cuts total patterning costs over time by slashing the number of process steps needed for advanced architectures.

Wall Street is betting the technology will pay off handsomely. UBS raised its price target on ASML to €1,900 on Wednesday, with analyst Francois-Xavier Bouvignies calling the stock a top pick and dismissing concerns about production bottlenecks as overblown. Barclays also upgraded the shares to “buy” with a fair-value estimate of €1,575. Institutional investors are taking note: hedge fund Coatue Management bought roughly 500,000 ASML shares in the first quarter, building a significant new position.

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Manufacturers are pursuing divergent strategies. Intel is integrating High-NA systems directly into its 14A process, already preparing hundreds of thousands of wafers. South Korea’s SK Hynix is also moving aggressively. Industry leader TSMC, by contrast, is taking a more cautious approach, planning to extend the life of its existing Low-NA EUV tools across several more generations before committing to the new gear.

Shifting the bottleneck is another key dynamic. ASML appears to have resolved its own capacity constraints; the company is now looking to foundries such as TSMC and Samsung to order more lithography systems — and build out the infrastructure — needed to meet surging demand for specialised AI processors. Fouquet forecasts that the AI boom will drive annual chip-market growth of roughly 20%, underpinning ASML’s ambitious revenue targets through 2030.

The technology roadmap does not stop here. Management is already developing a next-generation system dubbed Hyper-NA, ensuring ASML remains the sole supplier of these ultra-precision tools as the industry pushes ever deeper into sub-nanometer territory.

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