Despite being the undisputed overlord of chip-making kit, ASML is now facing the brutal reality that the cutting edge might not need its most advanced tools.

The reason is an executive at Troubled Chipzilla who last month muttered that lithography isn’t quite the belle of the fab ball anymore. And when lithography takes a back seat, so does ASML.

BofA now expects ASML’s earnings per share to take a five per cent hit in 2026 and 2027.

This is caused by a cocktail of market wobbles, softening demand for high NA EUV machines, and Chipzilla’s inability to get its 18A production act together.

SK hynix’s push toward vertically stacked 3D memory designs has added more gloom to the lithography outlook, given that such chips care more about vertical density than ultra-fine horizontal resolution. That, along with Intel’s production misfires and Samsung’s GPU memory setbacks, all fed into BofA’s pessimism.

The analysts are jittery about looming US restrictions on chip kit exports to China, which could further kneecap ASML’s potential markets.
BofA stuck to its ‘Buy’ rating, pointing to ASML’s decent enterprise value to operating income ratio of 19.6. They’re  bullish on the long-term prospects of AI chips, forecasting a juicy $795 billion market by 2030. Since AI silicon craves leading-edge manufacturing to squeeze out performance and power efficiency, ASML’s gear could yet find itself back in demand.