Lithography systems: ASML's China revenue expected to collapse in 2026
Although ASML's revenue has decreased, the stock market is happy. The reason is primarily a single sentence in the business report.
ASML's lithography system Twinscan NXT:1980Di, one of the lithography systems that ASML is still allowed to sell to China.
(Image: ASML)
ASML generated good 7.5 billion euros in revenue in the third quarter of 2025, minimally less than in the three months prior (7.7 billion). Analogously, operating and net profit also decreased minimally to just under 2.5 billion and good 2.1 billion euros, respectively.
Compared to the previous year, there is almost a standstill. However, sequential comparisons are more meaningful because ASML does not have a traditionally seasonal business.
No decline expected in 2026
For the entire year 2025, ASML expects around 15 percent growth, meaning around 32.5 billion euros in revenue. This corresponds to the downwardly revised forecast from the beginning of the year. However, one sentence in the business report is particularly important: “ASML does not expect total revenue in 2026 to be below the 2025 level.”
In July 2025, the manufacturer was still more uncertain: “At the same time, we continue to observe increasing uncertainty due to macroeconomic and geopolitical developments. Therefore, while we continue to prepare for growth in 2026, we cannot confirm this at this time.”
The last sentence caused a significant stock price drop at the stock exchange at the time. The update now apparently brings back security, so that ASML's stock has risen by about five percent since the publication of the business report. However, the all-time high from the summer of 2024 of good 1000 euros remains unreached.
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China business expected to fall significantly
The outlook already considers a significant decline in revenue from Chinese chip manufacturers in 2026. ASML downplays the significance: the manufacturer had “underserved” the Chinese market before 2022, leading to a large backlog of orders over the past few years. The turnaround came before the tightening of export restrictions to China; revenue then shot up sharply.
According to this, sales are expected to normalize in 2026. However, Chinese companies are also gradually making progress with domestic lithography systems, so they could invest more money there. At the same time, the USA wants to further tighten export restrictions to China.
In the third quarter, the Chinese revenue share increased significantly again. Worldwide, ASML earned almost 5.6 billion euros from the sale of lithography systems. 42 percent of this came from China.
(Image:Â ASML)
In total, ASML recorded 66 new lithography systems and six refurbished ones in the third quarter. The remaining almost two billion euros in revenue were generated by the company from servicing existing systems and installing upgrades.
Temporary growth expected
In the current fourth quarter, ASML expects revenue of 9.2–9.8 billion euros. With the upper end of the forecast, the manufacturer would approach its revenue record from the end of 2024. Based on the expectations for the coming year, revenue will decrease again at the beginning of 2026.
(mma)
