What Does ASML Do? The Lithography Scanner Model

ASML sells lithography scanners and the upgrades that keep them running: it gets paid when a Low-NA EUV box is recognised, while 2027 Low-NA is already close to fully ordered.

SEMICONDUCTORS · Data as at 15 Jul 2026 · Next update: after ASML Q3 2026 results
Affects: Semiconductors · Taiwan · US

It is the equipment company on the semiconductors layer: the only firm that sells production EUV scanners. The foundry that buys most of the leading-edge boxes is TSMC. See foundry and advanced packaging.

In short: ASML designs, builds, and services the machines that print transistor patterns on wafers. Q2 2026 total net sales were €9.326 billion, with €6.565 billion of system sales — €3.8 billion of that EUV, including one High-NA — and €2.762 billion of Installed Base Management. The model works if Low-NA boxes keep shipping against a plan of about 65 this year, and if the extra 30% of Low-NA capacity planned for 2027 is already spoken for. High-NA is a later insertion clock, not this year's invoice.

Education only, not advice to buy or sell any security. Figures are from company filings and company releases dated as shown.

Numbers that matter

Sources: ASML Q2 2026 results (company), 15 Jul 2026; US GAAP financial statements (Form 6-K exhibit), 15 Jul 2026; investor call transcript, 15 Jul 2026. Status chips are Second Order's read. EUV system sales are the company's rounded call figure; the 6-K does not split EUV versus non-EUV in the income statement.

What does ASML actually do?

Three steps, in order.

Print. Ship. Service.

1. It prints the pattern. Lithography is how a foundry draws the circuit: light hits a mask, the mask throws a shadow onto resist, and that pattern becomes the transistor. Deep ultraviolet (DUV) uses longer-wavelength light. Extreme ultraviolet (EUV) uses 13.5-nanometre light so a single exposure can print tighter pitches. ASML sells both. Low-NA EUV (the NXE family, numerical aperture 0.33) is today's volume workhorse. High-NA (the EXE family, numerical aperture 0.55) prints a smaller field at higher resolution. They are not interchangeable boxes on the same clock. The mechanism is EUV, explained. This page is the company that sells the scanner.
2. It ships a finite number of boxes. In the quarter ended 28 June 2026 it sold 86 new lithography systems and 5 used ones — 91 in total, matching the 6-K unit count. CEO Christophe Fouquet said the company plans to ship around 65 Low-NA EUV systems in 2026, and about 130 DUV immersion systems. A foundry can raise a capital budget. It cannot print N2 layers without a scanner that has been built, installed, and qualified.
3. It services and upgrades the installed base. Installed Base Management is ASML's name for net service and field-option sales: the spare parts, field engineers, and upgrades that keep scanners running and lift output on machines already on a fab floor. That invoice does not wait for a new box to leave Veldhoven.

Optics for EUV are built with Carl Zeiss SMT. ASML is the assembler and the seller. Nikon and Canon still sell DUV. Neither sells a production EUV scanner.

How does ASML make money?

It gets paid when a system is recognised, and again when the installed fleet is serviced or upgraded. Three things decide which cash prints, and when:

• Recognition — a scanner in backlog is not revenue until ASML's accounting says it is
• Mix — EUV versus DUV, logic versus memory, Low-NA versus High-NA
• The installed base — idle tools still need parts; busy tools buy upgrades

On 15 July 2026 the 6-K printed €9,326.5 million of total net sales: €6,564.8 million of net system sales and €2,761.7 million of net service and field-option sales. Gross profit was €5,035.4 million (gross margin 54.0%). Net income was €2,917.6 million, or 31.3% of sales. Basic EPS was €7.59. Cash plus short-term investments were €7,581.5 million (cash €6,671.9 million + STI €909.6 million), matching the press-release €7,582 million rounding.

The call split the system invoice. Net system sales were €6.6 billion, of which €3.8 billion was EUV — including sales of one High-NA system — and €2.8 billion was non-EUV. Logic was 51% of net system sales, memory 49%.

Our arithmetic. Using the call's rounded €3.8 billion against the 6-K's €6,564.8 million of system sales, EUV was about 58% of the system invoice (3.8 ÷ 6.5648 = 0.579). Against total net sales of €9,326.5 million, EUV systems were about 41% (3.8 ÷ 9.3265 = 0.407). Installed Base Management was about 30% of the quarter (2.7617 ÷ 9.3265 = 0.296). Put another way, roughly seven-tenths of the invoice was a new or used box, and three-tenths was the fleet already on the floor.

Who gets paid. ASML, when a Low-NA system is recognised and when field options land. Zeiss, on the optics inside the EUV column. Who pays. TSMC, Samsung, Intel Foundry, and the memory makers adding EUV layers. Money sticks at the recognised scanner and at the upgrade, not at a foundry capex headline. TSMC's August board check put US$16.035 billion on advanced-technology machinery — the bucket a scanner sits in — but a board appropriation is not an ASML shipment this quarter. See the Taiwan CapEx-split Pulse.

Fouquet raised the 2026 sales outlook to €43–45 billion, with gross margin 54–56%. Q3 was guided at €11.0–12.0 billion. That is outlook. It is not Q3 cash.

What limits it?

Low-NA output first. High-NA mix second. Neighbour clocks third.

1. This year's Low-NA plan is still about 65, and 2027 is already spoken for. Fouquet said the company is adding 30% to 2026 Low-NA EUV capacity of around 65 for 2027, and investigating another 30% for 2028. The same step applies to DUV immersion from a 2026 base of around 130. Our arithmetic: 65 × 1.30 = 84.5, the ~85 Low-NA boxes that 2027's add implies. 65 × 1.30 × 1.30 = 109.85, the ~110 case it said it was investigating for 2028 — investigating, not a booked shipment plan. CFO Roger Dassen said 2027 Low-NA is "close to being fully covered with orders." A 30% add that is already covered is not an open queue.
2. High-NA is insertion, not a substitute for the 65. Q2 recognised one High-NA system inside that €3.8 billion of EUV sales. On 15 July 2026 ASML said Intel Foundry is using High-NA on Intel 18A for a subset of Core Ultra Series 3 (Panther Lake) layers, dual-qualified against the NXE (Low-NA) platform. On 7–8 September Intel Foundry and ASML said more than one million wafers had been processed across certification, R&D, and select production layers. That is insertion evidence. It is not one million commercial Panther Lake wafers on High-NA alone, and it is not a replacement for the Low-NA 65.
3. China is a DUV mix, not an EUV escape. Dassen said China-related business should stay around 20% of 2026 total net sales, "mainly related to an increased demand in mainstream logic." That is DUV. EUV remains a licensed, restricted tool.
4. A printed die still needs a stack and a slot. EUV is earlier than CoWoS and HBM. TSMC Chairman C.C. Wei said packaging capacity was "so tight that now it limits my customers' growth" (Q2 2026 call, 16 Jul 2026). SK hynix still has to allocate and attach the cube. The CoWoS-L Wire is the neighbour finish-line, not ASML's invoice. Do not read a sold-out scanner book as a shipped accelerator.

The honest uncertainty is conversion of the 65. A raised €43–45 billion guide can still miss the Low-NA unit plan if installs slip.

Who else does this?

Roles, not a league table.

What separates them is who can ship a qualified EUV box this year, and whether HBM and CoWoS-L then let a printed die become a module. ASML sits on the tool seat, not the package seat.

What would change this view?

The read on the model weakens if:

• Q3 or Q4 2026 prints Low-NA shipments tracking well below the ~65 plan
• 2027 Low-NA coverage opening up — cancellations, push-outs, or a capacity add that is not already ordered
• High-NA revenue staying "one system a quarter" while being sold as this year's volume clock
• China mix moving EUV, or export licensing tightening DUV enough to hit the guided ~20%
• Foundry capex cuts that show up in ASML's order language, not only in a TSMC monthly sales print
• CoWoS or HBM remaining so tight that printed wafers queue anyway — the neighbour clock stealing the bind

It stays intact while the ~65 Low-NA plan is the volume clock, 2027 is close to fully covered, Installed Base Management keeps a large share of the invoice, and High-NA remains insertion at Intel rather than a replacement for NXE.

Practical takeaways

• ASML's model on this layer is Print → Ship → Service: scanners, a counted number of recognised boxes, then Installed Base Management
• Q2 2026: €9.326bn sales, €6.565bn systems, €3.8bn EUV including one High-NA, €2.762bn IBM, 54.0% gross margin, €2.918bn net income
• Our arithmetic: EUV ~58% of system sales and ~41% of the quarter; IBM ~30%; 86 new + 5 used = 91 lithography systems
• Stuck step: ~65 Low-NA systems this year, with 2027 close to fully ordered on a 30% capacity add (~85 on our math)
• High-NA is Intel 18A insertion (one Q2 system; >1 million wafers across certification, R&D, and select layers as at 7–8 Sep 2026), not the 65
• A printed die still waits on HBM and CoWoS

FAQ

What does ASML do?
ASML designs, builds, and services lithography scanners — the machines that print transistor patterns on wafers — plus metrology and inspection. It is the only company that sells production EUV scanners. Low-NA systems do today's volume; High-NA is a later insertion clock.

What does ASML do in simple terms?
It makes the machines a chip factory uses to draw the circuit on a wafer, then charges again to keep those machines running and upgraded.

Is ASML profitable?
Yes on the dated print. Q2 2026 net income was €2.918 billion on €9.326 billion of sales, a 31.3% net margin, with a 54.0% gross margin (Form 6-K, 15 Jul 2026). That is not a forecast.

How is ASML different from TSMC?
TSMC prints dies and joins them to HBM on CoWoS. ASML sells TSMC — and Samsung, Intel Foundry, and memory makers — the scanners that print the tightest layers. One is the foundry. The other is the tool vendor. See What Does TSMC Do?.

What is ASML's Low-NA plan?
Around 65 Low-NA EUV systems in 2026, with a 30% capacity add planned for 2027 that Dassen said is close to fully covered with orders, and a further 30% under investigation for 2028.

Should I buy ASML shares?
We do not make buy or sell calls, and nothing here is a recommendation. What we can tell you is what the company does, how it gets paid, and which figures would change the picture. The decision is yours.

Keep reading on the map

• The layer: Semiconductors
• The mechanism: EUV, explained
• The foundry: Foundry and advanced packaging · What Does TSMC Do?
• The neighbours: CoWoS, explained · HBM, explained · What Does SK hynix Do?
• The Wire: CoWoS-L through 2028 · SK hynix HBM5–CoWoS validation
• Where it happens: Taiwan · TSMC CapEx split · US · Korea
• Who designs the die: Who makes AI chips

The members cut on the long clock is already live: Where does the stuck step move?. This page stays the free Stack read of the ASML model.

Sean

Writes Second Order by TKN — a plain-English map of AI infrastructure. Who gets paid, where money sticks, which step is stuck. Not investment advice.

Author page → · Editorial standards →

How we check this

Figures come from company filings and company releases, each dated below. EUV versus non-EUV system sales are the investor-call split; the 6-K prints the totals. 2027–2028 capacity adds are company plans or investigations, not shipments. The one-million-wafer High-NA print spans certification, R&D, and select layers. Where we work something out ourselves, the arithmetic is shown in full.

Last reviewed: 2 Oct 2026 · Next review: after ASML Q3 2026 results print Low-NA EUV shipments against the ~65 plan

Spot an error? Tell us and we will correct it and note the change here.
Our editorial standards →

Sources

1. ASML, ASML reports €9.3 billion total net sales and €2.9 billion net income in Q2 2026 (company), 15 Jul 2026 — €9.3bn sales, 54.0% gross margin, €2.9bn net income, 86 new / 5 used lithography systems, IBM €2.762bn, Q3 guide €11.0–12.0bn, FY 2026 sales €43–45bn, Low-NA ~65 with +30% for 2027, DUV immersion ~130
2. ASML, Financial statements US GAAP Q2 2026 (Form 6-K exhibit 99), 15 Jul 2026 — net system sales €6,564.8m, net service and field option sales €2,761.7m, total net sales €9,326.5m, gross profit €5,035.4m, net income €2,917.6m, 91 lithography systems, cash €6,671.9m, short-term investments €909.6m
3. ASML, Form 6-K, 15 Jul 2026 — exhibit index for the Q2 release
4. ASML, Q2 2026 investor call transcript, 15 Jul 2026 — €3.8bn EUV system sales including one High-NA, €2.8bn non-EUV, logic 51% / memory 49%, ~65 Low-NA, 2027 close to fully covered, China ~20% mainly mainstream logic
5. ASML, Intel Foundry and ASML Collaborate to Accelerate Industry Readiness for High-NA EUV (company), 8 Sep 2026 — more than one million wafers processed on High-NA across certification, R&D, and volume production on select Panther Lake layers
6. Intel Foundry, Intel Foundry and ASML Accelerate Industry Readiness for High-NA EUV (company), 7 Sep 2026 — same High-NA wafer print; overlay, throughput and availability meeting expectations
7. TSMC, Q2 2026 quarterly results, 16 Jul 2026 — C.C. Wei packaging capacity limiting customer growth

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