European semiconductor equities advanced Wednesday following a sizable guidance upgrade from ASML Holding, a key supplier of lithography systems used to manufacture advanced logic and memory chips. Shares of ASML jumped sharply in early Amsterdam trade, and other chip-related stocks also posted gains.
By 07:15 GMT ASML shares were up 5.3% in Amsterdam. France-based materials specialist Soitec rose 3.6%, optics and photonics company Jenoptik jumped 5.5%, and BE Semiconductor added 0.8%.
ASML raised its full-year sales forecast to a range of 243 billion to 245 billion, revising up from its prior guidance of 236 billion to 240 billion. The company simultaneously lifted expected gross margin to between 54% and 56%, up from the earlier range of 51% to 53%.
"AI-related investments and continued progress in AI technologies are driving demand for advanced logic and memory chips, further strengthening the semiconductor industrys growth outlook," Chief Executive Christophe Fouquet said.
For the third quarter, ASML guided for sales of 11.5 billion, about 11% higher than the Visible Alpha consensus of 10.37 billion, and projected a gross margin of 56%, ahead of the 52.1% analysts had expected.
Bank of America interpreted ASMLs guidance as pointing to fourth-quarter revenue of 14.41 billion versus a consensus of 11.62 billion, and gross profit of 8.08 billion at a 56% margin, compared with consensus estimates of 6.11 billion and 53%.
Bank of America analysts highlighted that ASML delivered "robust 2Q results driven by stronger Installed Base Management (IBM) sales & margins." The company reported second-quarter sales of 9.33 billion, up from 7.69 billion a year earlier and above the 8.83 billion analysts had forecast, according to Visible Alpha.
Memory and storage chip prices have climbed as AI demand continues to exceed supply, and ASML indicated memory-related revenue is expected to rise 75% this year, underlining the appetite for equipment that produces those chips. Fouquet also said the company was close to securing all the orders it needs for next years extreme ultraviolet (EUV) lithography systems and is planning to expand capacity to ship additional machines.
EUV systems are ASMLs most advanced machines and are used to print the intricate layers on cutting-edge chips; they are deployed by customers such as Intel for some of their highest-end products. ASML executives are considering roughly a 30% increase in EUV output for 2027, followed by another 30% rise in 2028, noting that customers have already placed large volumes of orders for 2028.
Summary: ASMLs second guidance raise this year and stronger-than-expected quarterly outlook signalled robust demand for chipmaking equipment tied to AI, lifting a range of European semiconductor stocks. The company expects substantial memory revenue growth and is evaluating significant capacity increases for its EUV systems.