ASML shares rose about 4% after Aletheia Capital upgraded the stock to Buy, citing strong demand driven by expanding semiconductor factories, increased orders for EUV lithography tools used in AI and high-performance computing, and expectations of higher earnings in 2026 and 2027 due to increased chip manufacturing capacity, especially from TSMC.
Chinese scientists in Shenzhen have built a prototype EUV lithography machine, marking a significant step toward semiconductor independence and rivaling Western technology, with testing underway and a target to produce working chips by 2028 or 2030, despite ongoing technical challenges and US-led export restrictions.
ASML, a key supplier of EUV lithography equipment crucial for AI chip production, is forming a bullish base and is considered a strong buy with an 83% rally from 2025 lows, supported by positive analyst outlooks and robust revenue growth prospects.
Extreme ultraviolet lithography (EUV) is a groundbreaking technology used to create the world's fastest microchips, essential for powering advanced AI models. This technology, once thought impossible, involves using a powerful laser to create extreme ultraviolet light that etches circuits onto silicon wafers. The Dutch company ASML is the only firm capable of producing these advanced etching machines. The development of EUV was nurtured in U.S. nuclear labs and tech companies, and the U.S. is keen to prevent China from accessing this technology.
Intel Foundry, formerly known as Intel Foundry Services, is expanding its foundry business with the addition of the 14A process to its roadmap, marking the first extension in over two years. The company is aiming to become a one-stop shop for chip production, offering not only wafer lithography but also advanced packaging, chip assembly, and testing services. Intel is on track to deliver on its promise of 5 nodes in 4 years, with products based on its first EUV-based node, Intel 4, already available in the market. The company is also focusing on collaborating with Electronic Design Automation (EDA) providers and IP vendors to ensure a complete ecosystem for chip design and manufacturing.