ASML’s Market Dominance Remains Unshaken by Competitive Ambitions

In March 2026, China’s semiconductor industry publicly confirmed a long-held strategic objective: to develop its own EUV lithography system and break ASML’s monopoly. This announcement triggered a brief 5.5 percent decline in ASML’s share price, which subsequently recovered nearly all of its losses in subsequent trading. The swift rebound underscores the fundamental challenges inherent in China’s stated goal.

Financial Performance and Strategic Moves

ASML concluded its 2025 fiscal year with revenue of €32.7 billion, a gross margin of 52.8 percent, and a net profit of €9.6 billion. The fourth quarter alone saw net bookings reach €13.2 billion, of which €7.4 billion were for its cutting-edge EUV systems. Looking ahead, the company forecasts 2026 revenue in a range between €34 and €39 billion.

Shareholders are set to receive a total dividend of €7.50 per share for 2025, representing a 17 percent increase from the prior year. Complementing this, a share buyback program of up to €12 billion is underway and will run through the end of 2028.

A shift in geographic revenue mix is anticipated for the coming year. ASML expects China’s contribution to total sales to fall to approximately 20 percent in 2026, following an unusually high level in the previous period. The company anticipates that robust capital expenditure budgets from key clients like TSMC, Samsung, Micron, and SK Hynix will offset this decline over the medium term.

Should investors sell immediately? Or is it worth buying Asml?

Investor attention will also turn to the Annual General Meeting scheduled for April 22 in Veldhoven. Key agenda items include proposed management board changes, with Marco Pieters nominated to join as the new Chief Technology Officer. CFO Roger Dassen and COO Frédéric Schneider-Maunoury are proposed for reappointment. Furthermore, Benjamin Loh, former CEO of ASM International, is slated for a new appointment to the Supervisory Board. The subsequent quarterly report will provide the first concrete 2026 order data, offering clearer insight into the pace at which non-China business is filling the emerging gap.

The Enduring Technology Lead

The rapid market recovery following China’s announcement points to ASML’s deeply entrenched competitive advantage. The company’s EUV technology is the culmination of over three decades of research and relies on a global supply network encompassing roughly 5,000 specialized suppliers and 100,000 individual components per system. Notably, Chinese industry representatives—including the heads of Naura Technology, YMTC, and Empyrean Technology—acknowledged in their joint statement that integrating these components into a fully functional system remains the core unsolved challenge. Additional bottlenecks in EDA software, silicon wafers, and process gases further complicate the endeavor.

While competitors work to catch up, ASML continues to advance. In February, the company announced a significant breakthrough: its EUV light source had achieved 1,000 watts of usable EUV power for the first time, a substantial leap from the 600 watts in current production systems. This technological stride serves to widen the gap between ASML and its nearest rivals even further.