ASML, a manufacturer of chip equipment, eliminates 1,700 jobs and approximately 4% of its workforce

ASML Posts Record Q4 Orders, Raises 2026 Outlook as AI Demand Surges, Cuts Jobs

ASML, the world’s largest maker of computer chipmaking equipment, reported record fourth-quarter orders on Wednesday and raised its 2026 sales outlook, as strong demand from artificial intelligence-focused customers outweighed concerns over job cuts announced alongside the results.

The Dutch company said it would cut about 1,700 jobs, or 3.8% of its workforce, a rare move following years of rapid expansion. The reductions will mainly affect leadership roles in research and development teams in the Netherlands and the United States and are aimed at improving technical agility, ASML said.

Fourth-quarter bookings — the industry’s most closely watched metric — surged to a record €13.2 billion ($15.8 billion), up from €7.1 billion a year earlier and well above analyst expectations of €6.32 billion, according to Visible Alpha.

ASML shares rose as much as 7.5% to a record high before easing to trade up 4.2% in morning trading. The stock is up about 38% so far this year.

“It will be the last time that ASML reports quarterly order intake, and the company is going out with a bang,” ING analyst Marc Hesselink said, referring to ASML’s decision to stop disclosing bookings figures, which it says contribute to unnecessary share price volatility.

Outlook raised

ASML lifted its 2026 net sales guidance to between €34 billion and €39 billion, exceeding analysts’ expectations of about €35 billion, according to LSEG data. Previously, the company had forecast flat-to-higher sales compared with €32.7 billion in 2025.

“In recent months, customers have shared a more positive view of the medium-term market outlook, primarily based on stronger expectations for the sustainability of AI-related demand,” Chief Executive Officer Christophe Fouquet said in a statement.

Net profit at ASML, the sole maker of extreme ultraviolet (EUV) lithography machines used to produce the world’s most advanced chips, rose 26.3% in 2025 to €9.6 billion, from €7.6 billion a year earlier. Sales increased 15.5% to €32.7 billion.

AI investment drives orders

The strong order intake reflects rising investment by ASML’s customers, including TSMC, Samsung, SK Hynix and Micron, as they expand capacity to meet demand for AI logic and memory chips used by cloud computing giants such as Microsoft, Amazon and Alphabet’s Google.

“Overall, there is good fourth-quarter order momentum and a strong 2026 outlook, driven by AI demand for EUV tools in both logic and DRAM,” Mizuho analyst Kevin Wang said.

ASML also announced plans to buy back up to €12 billion worth of shares through 2028.

Job cuts and China exposure

Chief Financial Officer Roger Dassen said the workforce reduction was the largest in absolute terms in ASML’s history, following prolonged expansion during the 2010s and 2020s.

“Job cuts amid record bookings should make for fascinating talks with labour unions,” said Michael Roeg, an analyst at Degroof Petercam.

China remained ASML’s largest single market in 2025, accounting for 33% of sales, down from 41% in 2024. Dassen said that figure is expected to fall further to around 20% in 2026, as U.S.-led export restrictions limit Chinese access to ASML’s most advanced tools.

ASML reaffirmed its long-term outlook, forecasting revenue of between €44 billion and €60 billion and a gross margin of 56% to 60% by 2030.