ASML Faces Crucial Q1 Test on April 15: €38.8 Billion Backlog Meets China Headwinds, 1,700 Job Cuts, and Analyst Downgrades

By NineScrolls Team · 2026-04-13 · 6 min read · Industry

What to Expect on April 15

ASML Holding, the Dutch company that holds a 100% monopoly on extreme ultraviolet (EUV) lithography systems required for sub-7nm chip manufacturing, will report its first-quarter 2026 financial results before market open on April 15. Management has guided Q1 revenue between €8.2 billion and €8.9 billion, with gross margins of 51% to 53%. Analyst consensus sits at approximately $7.67 earnings per share, and options markets are pricing in a potential 5% stock swing in either direction on earnings day.

The report arrives at a pivotal moment. ASML's stock has gained 25.2% year-to-date, pushing the company's market capitalization to €479 billion. But that rally masks a turbulent stretch: a 13.5% pullback following the announcement of 1,700 layoffs, an employee walkout at headquarters, and a string of analyst downgrades from Santander, Barclays, Mizuho, Erste Group, and Morgan Stanley.

Record €38.8 Billion Backlog and EUV Dominance

ASML enters 2026 with its largest-ever order backlog: €38.8 billion. Fourth-quarter 2025 bookings alone reached €13.2 billion — a record quarter — propelled by massive commitments from memory and logic chipmakers racing to secure EUV capacity for AI chip production. EUV system revenue grew 39% year-over-year in 2025, and more than half of all new bookings are now for EUV tools.

Two orders dominate the near-term pipeline. SK Hynix committed approximately $7.9 billion for roughly 30 EUV systems to support high-bandwidth memory production for AI, marking the largest single order publicly disclosed in ASML's history. Samsung is planning around 20 EUV systems worth approximately $4 billion for its Pyeongtaek P5 fab. Together, these commitments provide revenue visibility well into 2027.

ASML's installed-base management (IBM) business — servicing and upgrading the growing fleet of lithography systems worldwide — also hit a milestone, with sales growing 26% to €8.2 billion in 2025. For full-year 2026, management has guided total revenue between €34 billion and €39 billion, implying 4% to 19% growth over the €32.7 billion posted in 2025.

China Revenue Declining from 29% to 20%

The headline risk heading into April 15 is China. In 2025, Chinese customers accounted for roughly 29% of ASML's total sales. The company has flagged an approximate €850 million reduction in system sales to China and expects the country's share to normalize to around 20% in 2026. U.S. and Dutch export controls continue to restrict ASML's ability to ship its most advanced EUV and deep-ultraviolet (DUV) systems to Chinese fabs.

Investors will scrutinize whether booming demand from Taiwan, South Korea, and the United States can fully offset the China decline. TSMC, Samsung, Intel, and SK Hynix all rely on ASML for the lithography tools that pattern the most advanced logic and memory chips powering AI training clusters. Delivery lead times of 12 to 18 months for new EUV systems give ASML pricing power, but the geographic shift in revenue mix carries margin implications that Q1 results will begin to reveal.

1,700 Job Cuts Trigger Employee Walkout

On January 28, alongside record Q4 2025 earnings of €9.6 billion in net income for the full year, ASML announced it would eliminate approximately 1,700 positions — about 4% of its global workforce. The cuts target management and IT roles, primarily in the Netherlands with additional reductions in the United States. CEO Christophe Fouquet framed the restructuring as a move to strip out layers of bureaucracy and streamline operations.

The announcement drew sharp criticism from Dutch trade unions. The CNV (Christian National Trade Union Federation) said it "cannot reconcile" the layoffs with ASML's projected growth and plans to hire 20,000 new workers in the coming years. On March 24, over 1,000 employees staged a lunchtime walkout at ASML's Veldhoven headquarters in protest. As of late March, workers reported remaining in the dark about specific impacts, with the company pushing for union sign-off by April 1.

Analyst Downgrades Cloud the Outlook

Despite the record backlog, a wave of analyst downgrades has tempered expectations. Santander, Barclays, Mizuho, Erste Group, and Morgan Stanley have all cited caution on 2026 revenue growth, pointing to China export control risks, potential order timing shifts, and Q1 gross margins that may dip from the 54% level seen a year ago to the guided 51–53% range due to product mix and weaker servicing revenue.

The key metric investors will watch beyond headline revenue is backlog conversion efficiency — how much of that €38.8 billion ASML can translate into shipped systems and recognized revenue. With the high-NA EUV platform (the EXE:5200) now in early deployment at Intel and Samsung, the pace of commercialization for this next-generation tool will also shape forward guidance. ASML has set long-term 2030 targets of €44–60 billion in annual revenue with gross margins of 56–60%.

What This Means for Plasma Processing and Thin Film Deposition

Every EUV lithography system ASML ships triggers downstream demand across the semiconductor equipment supply chain — and that chain runs directly through plasma processing and thin film deposition. EUV patterning at sub-7nm nodes requires tighter etch uniformity, more conformal deposition, and additional film stacks. Each new layer patterned by an EUV scanner must be etched with angstrom-level precision using advanced plasma etch tools, and the resulting structures filled or coated using atomic layer deposition (ALD), chemical vapor deposition (CVD), or physical vapor deposition (PVD) systems.

ASML's €38.8 billion backlog is a leading indicator for etch and deposition equipment demand. When fabs install new EUV scanners, they simultaneously purchase plasma etch systems (from Lam Research, Tokyo Electron, and others), PECVD and ALD tools (from Applied Materials, ASM International, and Kokusai Electric), and the associated vacuum components, gas delivery systems, plasma sources, and sputtering targets that keep those tools running. SK Hynix's $7.9 billion EUV order for HBM production, for example, will require corresponding investments in high-aspect-ratio etch and conformal ALD for capacitor and interconnect formation.

The China factor matters here too. As ASML's most advanced systems are redirected from Chinese fabs to customers in Taiwan, Korea, and the U.S., the deposition and etch equipment orders follow. Equipment suppliers with exposure to these regions — and particularly those supplying plasma sources, RF generators, mass flow controllers, and process monitoring instruments — stand to benefit from the geographic rebalancing of the world's most advanced chip manufacturing capacity.