ASML Holding N.V. (NASDAQ: ASML) is ending the week in the spotlight after fresh reporting on China’s workarounds for chipmaking restrictions collided with the bullish “next wave” narrative around High‑NA EUV lithography. ASML’s U.S.-listed shares were last indicated around $1,056, up about 1.9% from the prior close in the latest available trade data (reflecting the final trading session before the weekend). [1]
For investors, the setup is familiar but newly sharpened: ASML remains the only company producing extreme ultraviolet (EUV) lithography systems, the most critical tools used to manufacture the world’s most advanced chips—yet it sits squarely in the crossfire of geopolitics, export controls, and China’s push for self-sufficiency. [2]
Below is what’s new from Dec. 20, 2025, how it connects to ASML’s 2026 outlook, and what forecasts and analyses are shaping sentiment heading into early 2026.
Dec. 20 headline: China boosts AI-chip output by upgrading older ASML tools
A major weekend catalyst came from reporting that Chinese chipmakers are upgrading older ASML deep ultraviolet (DUV) lithography machines—including Twinscan NXT:1980i-class tools—using aftermarket components (such as stages, lenses, and alignment sensors) to push output for chips used in AI and smartphones. The reporting notes that these upgrades may help sustain 7‑nanometre-class production without access to EUV, though the process can require multi‑patterning that raises cost and reduces yield. [3]
Why this matters for ASML stock is more nuanced than a simple “China found a loophole” narrative:
- Near term: China has been a meaningful market for ASML’s DUV systems and installed-base services. If older machines can be “sweated” harder, it may temporarily reduce the urgency for new tool purchases—especially where restrictions already limit what can be shipped.
- Medium term: Stories about retrofits and secondary-market parts raise the odds of tighter enforcement around spares, subcomponents, and service activities—areas where ASML also earns high-margin installed-base revenue.
- Long term: The bigger market question is whether China’s workarounds slow down demand for ASML systems inside China while demand outside China keeps accelerating due to AI infrastructure investment.
This dovetails directly with ASML’s own recent messaging that China demand is expected to cool in 2026.
ASML’s official view: strong 2025, “2026 not below 2025,” but China demand expected to fall
In its Q3 2025 results (released Oct. 15, 2025), ASML reported:
- €7.5 billion in total net sales and €2.1 billion in net income for Q3
- €5.4 billion in net bookings, including €3.6 billion EUV
- Q4 net sales guidance of €9.2–€9.8 billion and gross margin of 51–53%
- Full‑year 2025 expected sales growth of ~15% vs 2024, with gross margin around 52%
- A key line investors keep coming back to: ASML does not expect 2026 total net sales to be below 2025, and said it would provide more detail on the 2026 outlook in January 2026 [4]
However, ASML also warned that it expects China customer demand—and therefore China net sales in 2026—to decline significantly versus very strong business in 2024–2025. [5]
So while Dec. 20’s China-upgrade reporting is market-moving, it arguably reinforces what investors already suspected: China is a complex, politically sensitive revenue stream that could be volatile, and ASML is actively planning for a step-down.
The bullish counterweight: High‑NA EUV moves closer to commercial reality
On the optimistic side of the ledger, a key development this week was Intel’s announcement that it installed ASML’s Twinscan EXE:5200B, described as the industry’s first commercial High‑NA EUV lithography tool. According to reporting, the system has passed acceptance testing and is intended to support development of Intel’s 14A process, signaling High‑NA is moving beyond R&D toward high‑volume manufacturing readiness. [6]
The details matter for investors because High‑NA is widely viewed as ASML’s next pricing and growth engine:
- High‑NA EUV uses 0.55 numerical aperture optics (vs “low‑NA” EUV), supporting tighter patterning. [7]
- The tool is described as enabling 8nm resolution versus 13nm for low‑NA EUV (without multi‑patterning), and achieving overlay accuracy around 0.7nm—the sort of numbers that can become critical selling points as nodes shrink. [8]
In market terms, every credible sign that High‑NA EUV is becoming a “real production tool” strengthens the case that ASML can sustain premium pricing, expand service revenue, and remain deeply embedded in the roadmaps of leading-edge customers.
The industry backdrop: SEMI forecasts a new upswing in wafer-fab equipment spending
Macro demand is also being reinforced by new industry forecasts. A Reuters report citing SEMI projected that sales of equipment used to manufacture chip wafers will rise about 9% to $126 billion in 2026, and then grow a further 7.3% to $135 billion in 2027, driven largely by AI-related expansion in both logic and memory. [9]
The same report notes that ASML accounts for about a quarter of sales among top chip-equipment suppliers—an important data point when investors try to translate broad capex cycles into ASML revenue potential. [10]
The bear case grows teeth: China’s EUV ambitions and IP risk are back in focus
Beyond near-term workarounds, Reuters published an investigation (dated Dec. 18, 2025) reporting that a Chinese team in Shenzhen assembled a prototype EUV-style lithography machine in early 2025, using components from older ASML systems and involving former ASML engineers, according to sources. The report says the prototype is generating EUV light but has not produced working chips, and while China targets 2028 for working chips, sources suggested 2030 may be more realistic. [11]
From a stock perspective, this kind of story cuts both ways:
- It underscores how valuable and defensible ASML’s technology is—China is investing enormous resources to replicate it.
- It also highlights a serious strategic risk: talent leakage, reverse engineering, and long-cycle competition could eventually challenge the durability of ASML’s EUV monopoly, even if commercial competitiveness remains years away.
That’s why Dec. 20’s “retrofit” story and Dec. 18’s “prototype” story are being discussed together by investors: they point to China pushing in every available direction—incremental improvements now, more ambitious substitutes later.
Regulatory pressure hasn’t disappeared: China-linked customer scrutiny and export controls
Geopolitics remains a live variable for the stock. Earlier in December, Reuters reported on a Dutch TV program’s claim that ASML customers include at least one firm with links to the Chinese military; ASML responded that it abides by export laws and that any equipment sold was licensed or not restricted. The Reuters report also stated that China was ASML’s largest market in 2024, representing 36% of sales (about €10 billion). [12]
Investors often separate “systems” (new tool shipments) from “installed base” (spares, upgrades, field service). But export-control changes can affect both—especially if enforcement shifts toward parts, software, and performance upgrades.
Analyst forecasts: what Wall Street is expecting for ASML stock
Consensus ratings and price targets
As of Dec. 20 coverage, MarketBeat data described ASML as carrying a “Moderate Buy” consensus with an average price target around $1,171.83. With ASML trading around $1,056, that implies a low double‑digit upside in the consensus view (with wide dispersion behind the average). [13]
MarketBeat also framed valuation as elevated, citing a P/E around the low‑40s and a market capitalization in the low‑$400 billions range—numbers that reinforce that the market is already pricing in substantial long-term strength. [14]
“Wide moat” view from long-term research
Morningstar published an analysis (dated Dec. 18, 2025) arguing that ASML’s “wide moat” remains intact and that the stock is fairly valued in its framework—supporting the idea that even with geopolitical noise, ASML’s competitive position remains the core of the thesis. [15]
The “stock split” chatter (and why it’s not the real story)
With ASML trading above $1,000, stock-split speculation has resurfaced. Commentary from The Motley Fool points out that ASML is among a small group of stocks with a four‑digit share price and reviews ASML’s historical splits and reverse splits, while emphasizing that a split does not change fundamentals. [16]
For Google News readers, the practical takeaway is straightforward: a stock split could affect liquidity and retail accessibility, but it would not solve (or create) the real drivers of shareholder returns—orders, margins, export constraints, and ASML’s next technology ramps.
What investors will watch next: the 2026 outlook update, buybacks, and China policy
ASML has explicitly said it will provide more detail on 2026 outlook in January 2026. That upcoming update is likely to be the next major fundamental catalyst for ASML stock because it may clarify:
- How fast management expects High‑NA EUV to contribute to revenue mix
- Whether “2026 not below 2025” implies flat-ish growth or something stronger depending on order timing
- How large the expected China decline is in practice
- Whether demand momentum in AI-related logic and advanced memory is broadening enough to offset China volatility [17]
Capital return is also part of the near-term narrative. ASML stated it did not expect to complete its €12 billion 2022–2025 buyback program within the original timeframe and intended to announce a new share buyback program in January 2026—a detail that matters for investors modeling EPS support and shareholder yield. [18]
Finally, watch policy headlines. Dec. 20’s reporting on retrofits and secondary-market upgrades increases the chance of renewed debate over “subcomponent” controls—not only what machines are shipped, but what can be serviced, upgraded, or supplied over time. [19]
Bottom line for ASML stock after Dec. 20, 2025 news
ASML’s investment case remains a tug-of-war between two powerful forces:
- Technology leadership and structural demand
AI-driven expansion, High‑NA EUV adoption, and an industry capex cycle that SEMI expects to strengthen into 2026–2027 support the long-term bull case. [20] - Geopolitical and China-related uncertainty
Evidence of China upgrading older ASML tools, plus credible reporting on domestic EUV prototyping efforts, keeps pressure on how investors discount long-range China revenue, IP risk, and the possibility of stricter export controls. [21]
With ASML shares still near the upper end of their recent range and valued at a premium multiple, the market is effectively saying: ASML can keep winning—but it has to keep executing flawlessly, and it has to keep navigating geopolitics better than anyone else in global tech. [22]
References
1. www.fool.com, 2. www.reuters.com, 3. www.ft.com, 4. www.asml.com, 5. www.asml.com, 6. www.tomshardware.com, 7. www.tomshardware.com, 8. www.tomshardware.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.marketbeat.com, 14. www.marketbeat.com, 15. global.morningstar.com, 16. www.fool.com, 17. www.asml.com, 18. www.asml.com, 19. www.ft.com, 20. www.tomshardware.com, 21. www.ft.com, 22. www.marketbeat.com
