ASML Holding(US:ASML) Ge Long Hui·2025-10-16 11:09Core Viewpoint - The global AI infrastructure investment reached $350 billion in a single year, surpassing the total investment of the Apollo program, with ASML holding nearly €30 billion in backlog orders, equivalent to 92.3% of its projected 2025 revenue, while aiming for €60 billion in revenue by 2030. However, ASML's Q3 2025 revenue of €7.52 billion fell short of market expectations, raising questions about AI demand and technological transitions [1][2]. Financial Performance Analysis - ASML's Q3 2025 financial report showed a revenue of €7.52 billion, which was €270 million below market expectations, but the high sales ratio of EUV systems at 37.5% indicated a healthy trend towards advanced processes. The fluctuations in non-EUV business were attributed to the completion of prior orders from China, aligning with expectations [3][6]. - The adjusted earnings per share (EPS) of €5.49 exceeded market expectations by €0.12, with a net profit of €2.13 billion and a net profit margin of 28.3%, driven by high-margin EUV equipment and installation management services [3][6]. - Net system orders surged by 105% year-on-year to €5.4 billion, with EUV orders making up 66.7%, indicating strong demand for advanced equipment and a projected backlog of €30 billion by year-end [3][6]. Competitive Advantages - ASML's monopoly in the semiconductor equipment industry is supported by three key strengths: 1. Unique technology that is difficult for competitors to replicate, with EUV lithography machines requiring over 100,000 parts and collaboration from over 500 suppliers, alongside a consistent R&D investment of over 15% of revenue [7][9]. 2. Strong customer dependency, as the demand for EUV technology increases with the evolution of AI chips and high-end memory, creating a stable demand loop [9]. 3. Strategic positioning in the ecosystem, engaging deeply with clients in advanced process R&D and integrating AI technology into its products, making it challenging for competitors to enter the market [9][10]. Future Growth Drivers - ASML's future growth is anticipated to be driven by: 1. High-NA EUV technology, with the first device already validated and expected to generate large-scale orders by late 2026, potentially exceeding €300 million per unit [10][11]. 2. 3D integration technology, which enhances production capacity and positions ASML as a provider of advanced packaging solutions, opening new market opportunities [11]. Revenue Target and Pathway - ASML's ambitious revenue target of €44-60 billion by 2030 is supported by a clear pathway: - Short-term growth through Low-NA EUV sales to offset DUV business normalization, with EUV revenue expected to rise from 28% to over 35% [12]. - Mid-term growth driven by High-NA EUV entering mass delivery and 3D integration contributing to revenue, with a forecasted return to double-digit growth rates [12]. - Long-term growth from High-NA EUV becoming mainstream and 3D integration becoming a core segment, alongside high-margin installation management services [12]. Key Indicators for Success - To assess ASML's ability to meet its €60 billion revenue target, three critical indicators should be monitored: 1. Achievement of Q4 2025 revenue targets of €9.2-9.8 billion to validate production capacity effectiveness [13]. 2. Timing of High-NA order surges in late 2026, which will influence mid-term growth momentum [13]. 3. Recovery of the Chinese market post-Q1 2026 to stabilize DUV business and overall revenue [13].