[2026 Outlook] Plan Ahead! Share the Investment Opportunities You Are Optimistic About
阿斯麥2025Q4業績直播
Key Takeaways (AI-Generated)
Financial Performance:
- ASML reported Q4 2025 net revenue of EUR 9.7 billion, highlighting the inclusion of 2 High NA systems revenue.
- The full year 2025 saw a revenue of EUR 32.7 billion, marking a 16% increase from 2024.
- Q4 gross margin was 52.2%, with the full year margin slightly higher at 52.8%.
- Net income for Q4 reached EUR 2.8 billion, with a total of EUR 9.6 billion for the full year.
- Net bookings for the year stood at EUR 13.2 billion, with EUR 7.4 billion attributed to EUV systems.
Business Progress:
- ASML experienced a significant demand for EUV systems from customers, leading to a strong backlog of EUR 38.8 billion at the end of 2025, with EUR 25.5 billion dedicated to EUV.
- The company has plans to ramp up output, particularly benefiting from strong demand in AI applications.
- ASML also demonstrated a record quarter for order intake and free cash flow, underpinned by robust customer assessments on AI demand sustainability.
Opportunities:
- ASML is capturing the growing AI-driven demand across various sectors, including data centers and infrastructure.
- Significant investments from customers in capacity building due to positive medium-term market outlooks, particularly in AI, are enhancing demand for ASML's offerings.
- Advancements in technology nodes (from 4-nanometer to 3-nanometer) by clients are expected to surge demand for more advanced manufacturing tools, creating opportunities for ASML.
Next Quarter Guidance:
- Q1 2026 revenue is expected to range from EUR 8.2 billion to EUR 8.9 billion.
- Gross margin for Q1 is projected between 51% and 53%.
- Installed Base revenue forecast for Q1 is approximately EUR 2.4 billion.
- Total net revenue for 2026 is anticipated to be between EUR 34 billion and EUR 39 billion.
- The company sees strong EUV business growth continuing into 2026, alongside expectations for the non-EUV systems business to remain relatively flat.
Risks:
- ASML faces a tight supply situation predicted for 2026, especially for high-bandwidth memory (HBM) and DDR in the DRAM sector, which could challenge production schedules and delivery commitments.
Full Transcript (AI-Generated)
Operator
Good day and thank you for standing by. Welcome to the ASML 2025 Fourth Quarter and Full Year Financial Results Conference Call on January 27th, 2026. At this time, all participants are in a listen only mode. After the speaker's introduction, there will be a question and answer session. To ask a question during the session, you need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11. Again, please be advised that today's conference is being recorded. I would not like to end the conference. Over to Mr. Jim Kavanagh. Please go ahead.
Jim Kavanagh
Thank you, operator. Welcome, everyone. This is Jim Kavanagh, Head of Investor Relations at ASML. Joining me today on the call are ASML CEO, Christophe Fouquet and our CFO, R.J.M. Dassen. The subject of today's call is ASML's 2025 fourth quarter and full year results. The length of this call will be 60 minutes and questions will be taken in the order that they are received. This call is also being broadcast live over the Internet at www.asml.com. A transcript of management's opening remarks and a replay of the call will be available on our website shortly following the conclusion of this call.
Before we begin, I would like to caution listeners that comments made by management during this conference call will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve material risks and uncertainties. For the discussion of risk factors, I encourage you to review the Safe Harbor statement contained in today's press release and presentation found on our website at www.asml.com and in our ASML's annual report on Form 20F and in other documents as filed with the Securities and Exchange Commission. With that, I would like to turn the call over to Christophe Fouquet for a brief introduction.
Christophe Fouquet
Thank you, Jim. Welcome, everyone, and thank you for joining us for our fourth quarter and full year 2025 results conference call. Before we begin the Q&A session, Roger and I would like to provide an overview and some commentary on the fourth quarter results and full year 2025 results as well as provide some additional comments on the current business environment and on our future business outlook. Roger.
R.J.M. Dassen
Thank you, Christophe, and welcome everyone. I will first review the fourth quarter and full year 2025 financial accomplishments and then provide guidance for the first quarter of 2026. Let me start with our fourth quarter accomplishments. The fourth quarter of 2025 total net revenue were €9.7 billion, which is within our guidance. Net system sales were €7.6 billion, which includes €3.6 billion from EUV system sales, including two High NA systems and €4 billion from non EUV system sales. Net system sales were driven by logic at 70% with the remaining 30% coming from memory installed. Base management sales for the quarter came in at €2.1 billion as guided.
Gross margin for the quarter was also within guidance at 52.2%. On operating expenses, R&D expenses were slightly higher than expected at rounded €1.3 billion, mainly due to higher non recurring personnel costs and the recognition of a grant that shifted into 2026. SG&A expenses also came in higher than guided at €375 million driven mostly by higher mainly non recurring salary related costs, the sale of receivables and pull in of certain IT spending. The effective tax rate for Q4 was 18%. For the full year 2025, the annualized effective tax rate came in at 17.7%. Net income in Q4 was €2.8 billion, representing 29.2% of total net sales, resulting in earnings per share of €7.35.
Turning to the balance sheets, we ended the fourth quarter with Cash, Cash equivalents and short term investments at a level of €13.3 billion. For Q4, free cash flow was €10.9 billion which was significantly higher relative to the previous quarters of this year with the majority of the cash coming in at the very end of the quarter. Moving to the order book, Q4 net bookings came in at €13.2 billion split between €7.4 billion of EUV systems and €5.8 billion of non EUV systems. Net bookings in the quarter were slightly weighted towards memory with 56% in bookings and logic accounting for the remaining 44%.
Turning now to the full year, net revenue came in at €32.7 billion with a gross margin of 52.8%. EUV system sales realized from 48 systems including High NA were €11.6 billion, which was 39% higher than 2024. DUV system sales decreased 6% year over year to €12 billion. For metrology and inspection system sales increased 28% from 2024 to €825 million. Looking at the market segments for 2025, logic system revenue was €16.1 billion, 22% higher than 2024. Memory system revenue was €8.4 billion, 2% lower than 2024 and installed base management sales were €8.2 billion, 26% higher than 2024. We concluded 2025 with a backlog of around €38.8 billion.
In 2025, we continue to invest in innovation across our full product portfolio, increasing R&D spending to €4.7 billion or about 14% of sales. SG&A increased to €1.3 billion in 2025, which was about 4%. Net income for the full year was €9.6 billion, 29.4% of net sales, resulting in an earnings per share of €24.73 for 2025. We generated free cash flow of €11 billion. With that, I would like to turn to our expectations for the first quarter of 2026. We expect Q1 total net revenue to be between €8.2 billion and €8.9 billion. We expect our Q1 installed base management sales to be around €2.4 billion. Gross margin for Q1 is expected to be between 51% and 53%. Expected R&D expenses for Q1 are around €1.2 billion and SG&A is expected to be around €300 million.
For the full year 2026, we expect net revenue to be between €34 billion and €39 billion with a gross margin of between 51% and 53%. Regarding our cash return to our shareholders in Q4, ASML second interim dividend over 2025 of €1.60 per ordinary share. ASML intends to declare a total dividend for the year 2025 of €7.50 per ordinary share, which is a 17% increase compared to 2024. An interim dividend of €1.60 per ordinary share will be made payable on February 18th, 2026. Recognizing this interim dividend and the two interim dividends of €1.60 per ordinary share paid in 2025, this leads to a total dividend, a final dividend proposal to the Annual General Meeting of €2.70 per ordinary share.
In Q4 2025, we purchased shares for a total amount of around €1.7 billion. This program finished in December 2025 with a total of €7.6 billion we purchased out of the up to €12 billion program. We returned €8.5 billion to shareholders through a combination of dividends and share buybacks in 2025. ASML announced a new share buyback program effective today and to be executed by December 31st, 2028. We intend to repurchase shares of an amount up to €12 billion, of which we expect a total of up to €2 billion will be used to cover employee share plans. We intend to cancel the remainder of the shares repurchased. With that, I would like to turn the call back over to Christophe.
Christophe Fouquet
Thank you, Roger. As Roger has highlighted, we finished the year with a very strong quarter with good financial results. The market outlook has improved notably over the last months, especially as related to the continued buildup of data centers and AI related infrastructure. This build up is now translated into additional capacity needs at our advanced logic and DRAM customers and in turn an increased demand across our product portfolio, especially in our EUV business. For the past quarters, we have seen a notable increase in acceleration of capacity expansion planning across a large majority of our customer base.
In advanced logic, our foundry customers have become more positive on the long term sustainability of AI demand. On a number of fronts, AI accelerators are migrating from the 4-nanometer node to the more litho intensive 3-nanometer node. At the same time, customers continue to ramp the 2-nanometer node in support of next generation HPC and mobile application. In memory, our customers are reporting very strong demand for both HBM and DDR products with supply remaining very tight through at least 2026 as they ramp both their 1b and 1c nodes in support of the demand. In addition, DRAM customers continue to adopt more EUV layers on those nodes. This is expected to continue on their future nodes as they migrate more multi patterning DUV to single exposed EUV resulting in an increase in litho intensity.
As a result of these dynamics, we see our customers in both segments increasing and accelerating capacity expansion plans to support the very strong demand they are seeing. We expect these investments to generate business for ASML in 2026 and beyond. Starting first with EUV, we expect revenues to be up significantly this year as a result of the dynamics in both advanced logic and DRAM. In non EUV, we expect revenues for 2026 to be similar to last year's as our advanced logic and memory customers expand capacity. As part of the outlook for non EUV, we expect the China region share in our total net sales in 2026 to be in line with our current system backlog, which is around 20%. We also expect our metrology and inspection businesses to grow significantly as customers increasingly invest in enhancing their process control strategy.
For installed base management, we expect another year of revenue growth. This is primarily the result of increasing service revenue from our growing installed base of EUV systems and of our customers' plans for performance upgrades to support their rapidly increasing capacity requirements. Turning to technology in EUV, we continue to make progress driving down the cost of technology on our customers' most advanced processes. We ramped our NXE:3800E in 2025 and its productivity gains support further replacement of complex multi patterning with single exposed EUV for multiple layers on current and future DRAM. We also expect both immersion and EUV litho intensity to increase as customers migrate from 6F squared technology to 4F squared architectures.
With regard to High NA, our customers are reporting good progress on their qualification of the technology for logic and DRAM applications in their R&D facilities. Intel announced last month the qualification and acceptance of their NXE:5200B system which will be used in high volume manufacturing for their leading edge nodes. We expect more systems to be released to our customers in 2026 supporting their preparation for the insertion of High NA in high volume manufacturing. With the continuing increase of 3D structures in advanced logic and memory, we see more adoption of our multi E-beam inspection system to detect optically non visible yield limiting defects. Our progress on system maturity and productivity supports further use of this multi beam system in high volume manufacturing on the most advanced nodes.
In summary, our product portfolio road map remains focused on supporting the road map requirements of our customers and driving our overall competitiveness. We look forward to sharing more performance data at the SPIE Advanced Lithography Conference in February. Looking longer term, the last few months have confirmed the positive impact of AI on customer demand for our advanced products and especially for our EUV systems. As we shared during our Capital Markets Day in November 2024, we see the end market dynamics supporting a shift in product mix towards more demand for our advanced lithography products and an increase in litho intensity. The combination of strong productivity road map on Low NA and the introduction of High NA supports further cost of technology reduction.
It also supports the conversion of more multi patterning DUV to single EUV exposure, especially on advanced DRAM nodes. In line with what we shared at the 2024 Capital Markets Day, we expect a 2030 revenue opportunity between €44 billion and €60 billion with an expected gross margin between 56% and 60%. With that, we will be happy to take your questions.
Jim Kavanagh
Thank you, Roger and thank you Christophe. Now the operator will instruct everyone momentarily on the protocol for the Q&A session. Beforehand, I would like to ask that you kindly limit yourself to one question with 1 short follow up if necessary. This will allow us to get through as many callers as possible. Now operator, could we have your final instruction and then the first question please?
Operator
Thank you. As a reminder, to ask a question, you need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11. Again, we are now going to proceed with our first question. And our first questions come from C Jamies from Cantor Fitzgerald. Please ask your question.
C Jamies
Yeah, good afternoon. Good morning. Thank you for taking the question. So I guess first question, trying to better understand your outlook for calendar 26. Based on your EUV bookings, it looks like you're entering the year with about 114 low NA tools and your implied guide is about 56, you know, give or take low NA. So is this a function of lack of certainty around the precise timing of clean room space adds? Are you facing challenges and sourcing lenses from Carl Zeiss? Are you seeing an extension of lead times? Would love to hear your thoughts around those moving parts.
Christophe Fouquet
Yeah, CJ, good morning to you. Indeed, I think it's a number of the things you just called out, right. So obviously we are ramping during the year to accommodate the demand is there, but the demand is also a little bit dependent on the progress that our customers are making in terms of the completion of their fabs during the year. So that's an important element in the bandwidth if you like of the guidance that we provide. So to a large extent it's driven by that. It's driven by our ability to execute and you know, to continuously ramp our move rates, you know, quarter on quarter on quarter. Those I would say are the most important drivers of the corridor that you just alluded to.
C Jamies
Great, thanks. And as a follow up, I guess on the High NA side, you know, is there any change in terms of your vision for revenue in four to seven tools in calendar 26? And then more importantly, how are you thinking about adoption? Do you think there's an opportunity for follow on High NA orders in the second-half and could we be surprised by seeing DRAM adopt sooner than logic? Thanks so much.
Christophe Fouquet
Well, I think there's no major changes compared to what we discussed last quarter, CJ. So I think that in terms of adoption, I mentioned it, we continue to see good progress at both DRAM and logic customers. I think some of our customers are even starting to play with limited product wafers to see the performance of the tool which is good news. We still expect, you know a lot of those qualification data collection to last most of the year, which means that when it comes to decision for insertion new orders, we indeed look at the second-half of this year for 2027 insertion. On the question, you know, if it's going to be DRAM or logic first, I think well, it's a bit of a neck to neck race right now. So hard to say. We see really good progress on both and the appetite to test the technology I would say in the coming months on products in both DRAM and logic customers.
R.J.M. Dassen
And maybe a final comment to CJ because he referenced I think 114 tools in the backlog. If I understood you correctly on EUV, I would tell you, I think that's a little bit on the high end at €25.5 billion of total value of EUV and that obviously includes also High NA, you might be a little bit on the high end of your unit number there.
Operator
We are now going to proceed with our next question. And the next questions come from the line of Joe Trokey from Wells Fargo. Please ask your question.
Joe Trokey
Yeah, thanks for taking the question. I guess I wanted to just go back to the 2026 kind of revenue growth guidance. If I look at the range, you know, between 4% and 19% growth, what type of those variables, I guess are ASML controlled versus your customers controlled?
Christophe Fouquet
Joe, I think I just said it right. So I mean it's obviously to a very large extent driven by the progress that our customers are making in completing the fabs and their ability to take in the tools. So that's a significant one in terms of, you know, whether the demand falls in 26 or whether it falls a little bit beyond 26. And then of course there is our ability to execute it, but it all starts with the ability of our customers to get the fabs in order and clean rooms in order in due time. So it's a bit of a combination of both I would argue.
Joe Trokey
OK. So I guess just maybe as a follow up, just can you remind us just how do we think about the manufacturing capacity capabilities in terms of just like the number of low NA EUV tools? I know you've had some targets out there, you know, from some analysts previously, but then maybe just an update there.
R.J.M. Dassen
So what we've done and this is the way we talked about it in the past, we have put in, you know, infrastructure such that we can respond, let's say within a 12 month or a little over that to demand. So that means that what we call the long lead time items anything that takes, you know, longer than let's say 12 to 18 months and that is in place so we have clean room space, we have the equipment in place etcetera, etcetera. So now what we're doing you know based on the stronger demand signals as we've gotten them in the past couple of months, now we're ramping up our capacity. Now you will appreciate you won't move from 44 EUV tools in one year to I'm just throwing it out 80 tools in the other year right. So obviously that's a gradual process and that's the process that we're doing. So you will see us increase our move rate quarter on quarter. So training, getting the people in, training the people, etcetera, etcetera. And that way quarter on quarter you will see an increase on the move rate. And we will do that hand in hand with our supply chain. So you will see the move rate increase during 2026 and in all likelihood if what we're seeing today is sustainable, you will continue to see that also beyond 26.
Joe Trokey
Thank you.
R.J.M. Dassen
You're welcome.
Operator
We will now take our next question and the questions come from the line of Andrew Gardner from Citi. Please ask your question.
Andrew Gardner
Thanks very much. Good afternoon everybody. Christophe, Roger, you've spoken today about the customers' medium term plans being revised up. I mean we can see that too in their public statements around revenue growth and CapEx for the coming years in particular from your biggest customer TSMC who said CapEx will be significantly higher for the next few years. And I mean some of that's quite clearly reflected in the record order intake that you just reported, but also quite clearly not all of it. And I'm just wondering in terms of the plans you just outlined Roger, in terms of increasing that move rate over the coming quarters, how much more visibility are the customers providing you in terms of the equipment needs for next year and the year after? I mean, no one wants to be the bottleneck in the kind of, you know, growth that we're seeing in this industry. And I presume that goes for you guys as well. And you must be having those conversations with the customers. Can you give us any insight as to how that visibility is improving into next year and the year after?
R.J.M. Dassen
I think the public commentary of customers on, you know, the sustainability of the particularly the AI related demand that they see on advanced logic and on memory. I think they also share that in the conversations with us. And of course that also translates into indications that they provide to us either for very concrete orders or what we call firm demand. So their indication of how they see the demand to develop, you know, I think the order intake in Q4, I think is strong evidence of that conversation and that it's not just a conversation, but that they're actually also, you know, putting evidence and money into that. But they're also talking, you know, beyond this year about what their expectations are. I would say in particular for 27. So our move rate plans that we have also takes that element into consideration. So what they tell us, I think direction is very much in line with what they say publicly. But of course they also you know give us a strong indication of how they see their demand develop year on year.
Christophe Fouquet
Maybe one thing to add to that, Andrew, I think you have to be aware that so you have seen indeed our customers being far more vocal about their capacity planning. I think this has been also the result of many, many discussions with their customers, which are also providing, I would say this midterm demand. So what we have seen really in the last three months is the alignment between the different parties that you know on the midterm, as Roger explained, we see basically a strong build up of demand and we have got many, many proof of that also in the last few weeks coming out of either logic or DRAM customers. So I think it took a bit of time to really get to that point, but we really see that happening very strongly in the last few weeks. And I think this is aligned across a large part of the ecosystem.
Andrew Gardner
Thanks very much.
Operator
We are now going to proceed with our next question and the questions come from the line of Alexander Duval from Goldman Sachs. Please ask your question.
Alexander Duval
Yes, thank you very much indeed for the question. Firstly on 2026, I wanted to just go back to assumptions for the top end of your sales guidance. I was curious to what extent that would assume that China is meaningfully down. And then going back to the discussion about long term capacity, you've obviously talked about customers being more confident on midterm demand and the longer term situation. I think in the capacity planning you've done in the past, you talked about 80 to 90 EUV tools. But if we think very much towards the 2030 time frame, the kind of plans that the customers are talking about would imply something bigger than that. So what kind of lead time would be required for you to push beyond that kind of outcome? And would there be other means through which you could deliver the capacity needed, for example, making your tools more productive by investing in R&D? Thanks very much.
R.J.M. Dassen
So when it comes to the top end of the expectation, you know, when we talk about China being 20% of sales, I would argue that's across the entire range, right? So which obviously means that if we're talking about €39 billion, you're looking at approximately €8 billion of China. So I would say that probably our expectation on China probably moves with that. If you look at what are the key expectations on the upside of that, well, as we just said, it means that our customers indeed are, you know, are able to take our tools that we're able to execute on as we currently plan. And probably also that the installed base business is running on all cylinders, particularly on upgrades, which is not illogical because upgrades obviously are in very high demand right now, because it's the easiest, fastest and most effective way for customers to get additional capacity, which in the current market is obviously very, very important to them. So those would be the key elements that I would say that would drive that. And you know in that model you could also envisage a China market at 20% of that total sales number.
When you talk about the long term amount. Let me make a few comments and then Christophe, maybe you can weigh in. First, you should not forget that when we get to the 2030 time frame, obviously at that stage, yes, we're looking at Low NA, but we're also definitely looking at High NA. And the Low NA tools that we would be providing at that point in time would of course be Low NA tools with again a higher throughput than what we have today. So back to your question on R&D, absolutely you know, we will continue to push the road map on our Low NA tools and continue to drive capacity such that per tool, you know, the customers get more productivity than what they get today. But also at that stage we expect, you know, a more meaningful number of High NA tools that would provide significant additional output capacity. And in that combination, you know, I think the numbers that you were just throwing out I think will provide, you know output capability to customers way ahead of the numbers that we're talking about today.
Christophe Fouquet
Yes, I think Roger is right, I think the way we summarize it is that we have I would say the flexibility to react to the development of the market. I think we talked about you know, mid, short term already. I think it's also true for the long term. And yeah, Roger is right, the contribution of High NA, the work we continue to do on productivity we already planned for that will give us even additional flexibility. So with the steps we have done on our capability on EUV and DUV in the last few years, which you remember we did execute despite the fact maybe the demand was a bit lower at some point. We have created basically the right flexibility to see the market coming.
Alexander Duval
Thanks very much.
Operator
We are now going to proceed with our next question and the questions come from the line of Krish Sankar from TD Cowen. Please ask your question.
Krish Sankar
Hi, thanks for taking my question. I had two. First one Roger for you to reconcile your bookings between EUV and memory. Typically memory has been 30% of the EUV mix. So looks like a big jump in the memory orders last quarter was driven by DUV. Is that fair? And then on EUV for memory for 1c node DDR5, are we talking about 7 to 8 EUV exposures or lower than that? And then I had a follow up.
R.J.M. Dassen
I'll take the first one and Christophe can take the second one. No, I think the order intake you know for memory strong but not just DUV also EUV. And in all likelihood if we look at the composition of our sales in 2026, you will see a major memory play in there. So the demand in 26 is far more balanced in terms of logic versus memory than it was in 2025. So that's what you see. But this is not just DUV, this is definitely also EUV.
Christophe Fouquet
Yeah. And I think on EUV, I think when it comes to DRAM, I think we are going to benefit both from of course the demand for capacity which we already discussed is very strong, you know. This year and most probably beyond that and you know we've been talking about the number of EUV layers increasing on DRAM. This has been one of our focus. We have seen that happening in 2025. We continue to see that happening and I mentioned it in the introduction on 6F squared, but also on 4F squared. And this is a bit what I would call the perfect storm because when it comes to EUV as a result DRAM share most probably will increase over time. So this is a very good dynamic on DRAM, which again based on all the work we do with our customers, discussions we have, we don't see stopping. So there's still some runway for more EUV layers for more litho intensity on DRAM for sure. And we should benefit from that in the years to come.
Krish Sankar
Got it, got it. There's a quick follow up. Sorry to get back to this manufacturing capacity, is it fair to assume your EUV manufacturing capacity is around maybe 70 units and does that potentially constrain your growth next year? The reason I'm asking is that is your manufacturing capacity limit causing movement of tools between this year and next year leading to your wide range of revenue guide for 26.
R.J.M. Dassen
Yeah, Krish, as I said, our capacity is very dynamic because you can't, we cannot move from one point to the other just like that in one quarter, right. So that's why I said, you know, we had 44 units revenue units of EUV Low NA last year. You cannot go from one quarter to the other even from one year to the other from 44 to 80. So we will crank it up every quarter. You will see us increase move rate, you will see us increase capacity. And you know if the demand signals remain as strong as they are that will continue into 2027 as well. And then I would say 70 would not be the limit that I would certainly be looking at. I think that is higher.
Operator
We are now going to proceed with our next question and the questions come from the line of Mehdi Hosseini from Susquehanna Financial Group. Please ask a question.
Mehdi Hosseini
Yes, thanks for taking my question. My first one has to do with just the capacity that Roger you just highlighted. I want to better understand EUV capacity and the topic has been around since 2021 when we had the shortages. I want to better understand what are the key factors as you ramp the EUV capacity, is that going to impact the booking trend? In other words, are your customers actually waiting to have a conviction of you adding committed capacity before they commit to booking or backlog that would be shippable in 27 and beyond and I have a follow up.
R.J.M. Dassen
No, I don't think Mehdi, that's what is going on. Customers know what we're doing. We share pretty openly with customers. You know how we're looking at our ability to increase. I think customers appreciate that we built in far more flexibility into our model than what we had before. If anything, you know if customers start to smell that for a certain year, you might be supply constrained actually the dynamic is the other way around. They want to make sure that they get their booking in before they are too late, right. So as a matter of fact, I would say if they believe that the capacity might become a choke point, then they will jump to put in the order. So I think it's more that than that they're waiting for confirmation that the capacity is there, but we very openly share with them what our plans are. And again they appreciate the flexibility that we built in and the significant reduction of response time that we have created as a result of creating the long lead time items.
Mehdi Hosseini
OK, great. Thanks for clarification and I want to go back to the comments in the transcript that was posted with the earnings report. There was a comment that some of the bookings would be shippable in 27. So the question that I have is what would it take for you to hit the high end of revenue guide for this year? Is that China, I'm assuming that China book backlog has a shorter lead time and to that extent, is that China that is going to impact your ability to hit the high end of your revenue guide range?
R.J.M. Dassen
I think I said it, I think first and foremost, it's the readiness of our customers to take tools. I think that is number 1. So their ability to complete fab construction, put the pedestals in and take our tools. I think that's constraint #1. Constraint #2 our ability to execute. So I just talked about what we're doing to increase the ramp. We're comfortable with that. But of course, you know, everyone needs to sing from the same song sheet, not just us, but also the supply chain. So we got to make sure that everyone is tuned in to the same ramp that we have planned. So that would be the second one. So that would be more of a supply factor on the demand side. I think it's the demand for upgrades and I gave some color on that earlier on. And as I mentioned on China, I think you know in our guidance, China is 20% of revenue. So China would breathe along with the corridor that we have given.
Mehdi Hosseini
Thank you.
R.J.M. Dassen
You're welcome.
Operator
We are now going to proceed with our next question and the questions come from the line of Didier Scemama from Bank of America. Please ask your question.
Didier Scemama
Thank you. Good afternoon gentlemen. I'm just asking about 4F squared and DRAM really. So I think Christophe, you mentioned in the press release that you see in your interaction with your customers that in fact DUV and EUV layer counts could go up with 4F squared. So I'm just wondering, you know, obviously there is a school of thought in the market that 4F squared would lead to a cliff in EUV demand from DRAM customers whenever we see 4F squared introduction say 2028. So is that a risk that you think is significantly diminishing because you know obviously the view is reuse of tool capacity or do you think that now as EUV layer count goes up and you know there is also a view that wafer capacity in DRAM is going to have to expand dramatically over the course of the next five years because of AI and you know more complex LLMs that effectively this risk of a cliff and significant reuse of EUV tools is effectively really diminishing dramatically. I'm going to have a follow up as well. Thank you.
Christophe Fouquet
Yeah, I'll try to answer all the points. So I think the first thing to say is if you look at 4F squared, the structure requires more advanced litho masks. So that's the first thing. So you get basically to look at a more complex structure and that structure is going to require more lithography. This is why we mentioned that both in fact immersion and EUV will go up. Now you talk about cliff a lot, customers don't like cliffs. Cliffs are very bad for operations, but customers like optimized technology over several nodes. And therefore when we talk about EUV insertion with our customers, of course the transition to 4F squared is taken into account because no one wants to buy a lot of tools and be stuck with them. So cliffs are never good for customers when it comes to operations. And what you see happening with DRAM is that EUV basically has become a very handy tool to simplify processes, to simplify the number of steps, to reduce cycle time, and even to bring more capacity. Because if you have less masks, if you have less multi patterning, you end up basically with more space in your fab. So EUV, I would say that the more DRAM customers use it, the more they like it because they get benefit on all those counts. And again, they want to avoid the cliffs. So when we made the statement in our release, basically it's really out of many, many discussions with customers. And I think that well, I don't know if the risk is going down. We never saw that the risk was pretty high. But I think we're very, very confident that again, litho intensity will grow with 4F squared both on DUV and EUV. And as I said before, we see EUV number of layers continuing to grow both before and after this transition.
Didier Scemama
Thank you. So my follow up is on the gross margin side. So I think perhaps one element of disappointment in the guide is the gross margin. And I think you mentioned, you know, the mix of High NA, obviously, you know, immersion probably going to decline because of China and then also the, let's say, the upgrade business and the sort of milestone payments that might not be as strong in 26. I'm just wondering if you look into 27, do you think that your mix of Low NA EUV will sort of revert back to, you know, what you had said before, which is the majority will be NXE:3800E? Or is there any reason why you know 3-nanometer capacity expansion will continue to grow into 27? I guess the question on China is anyone's guess, but if you want to hazard an answer, I'm very happy to hear it.
R.J.M. Dassen
Didier on the mix for EUV. You know, customers liked our NXE:3800E so much that they took as much as they could get in terms of 3800Es rather than NXE:3600Ds. But of course, you know, we had a number of 3600Ds that still needed to be completed that we had all the parts for and those will be shipped in all likelihood in 26. So the 27 mix in terms of EUV should be substantially better. And also at that point in time we're probably looking at the next generation. So the EUV mix by 27 should be better than 26. And you're right that is an important element because if you look at how we plan to work and get to the 56% to 60% gross margin in 2030, it's pretty clear that new generations of Low NA EUV are critical in that regard. So the EUV mix in 27 will be better than it is in 26. Another mix effect that is in there indeed is on the DUV side. So quite a bit more DUV rather than immersion. I would say in all likelihood that is less a matter of demand, but it's supply, right. So on the supply side, we are constrained in terms of immersion for 2026. So it's as a result that you know with higher DUV business and restrictions on the immersion side that gives you a less favorable DUV mix that goes into the equation and that's an important swing factor because you know you still have a 2% bandwidth in the gross margin. Important element of the swing will be installed base and will be upgrade business that gives you the upside. Didier not sure if you want to say what you think will be the right number on High NA in 26, the amount of High NA units, right. OK, OK. Yeah, probably a bit more than we had this year, but don't want to go into too much detail there.
Didier Scemama
OK, Fair enough. Thank you.
R.J.M. Dassen
Thank you.
Operator
We are now going to proceed with our next question and the questions come from the line of Francois Bouvignies from UBS. Please ask your question.
Francois Bouvignies
Thanks a lot. One for Christophe and one for Roger. I mean the first one maybe is for Christophe on High NA. I just wanted to, you know, get more details here. I mean we see the industry moving into a rush in terms of capacity both at TSMC and advanced logic, I should say and memory as well. And I was wondering if you have a rush in this capacity could that delay the High NA adoption? You know, do you see some risk of delay because the industry is simply too busy to add capacity that they don't want to add another risk in terms of transition. So I was just wondering if it's something that's possible.
Christophe Fouquet
Well, you know, I think from day one I've been talking about 3 phases of High NA adoption with R&D qualification for high volume manufacturing, then insertion in high volume manufacturing with, you know, limited amount of layers and then the whole thing. And I would say that plan always provides basically the time to have a real qualification. So you know, the acceleration you see today on capacity of course is on existing nodes that are ramping with known technology and those nodes will call for the use of the existing products we ship today. So that's Low NA, that's DUV, that's, you know, metrology inspection as we know it today. The preparation of High NA for the next nodes is such that it does leave the time if customers want to use it to insert it. So sometimes, you know, maybe some of you could believe that the 3 phases is a bit long, but this is on the other hand the way to secure the insertion on the node, because once the decision is made to use it on the node, they really want to use it, they prepare the masks for it, they qualify the whole process with it. So it's very difficult to change your mind and say, hey, I'm going to go back to the old stuff. So I think customers try to do those things in such a way that they are not too sensitive to either major acceleration or slow down of their capacity. So it's a longer answer to say no basically. So we don't see a risk there.
Francois Bouvignies
Perfect, thank you. And maybe my question is for 26, I mean if China is 20% of revenues, if we take the midpoint, it would imply China is down what 20-25% year on year, which is mainly in DUV. And you guided DUV flat for 26, which means non China DUV needs to go up by 40% year on year kind of to get the flat DUV. And I remember, you know, last year, I guess it's kind of a Deja vu where last year you said there is a strong correlation between the non China DUV and EUV growth. But when I look at 25, your non China DUV was actually not growing much compared to EUV. You had a big disconnect between the two. So I was wondering if there was a catch up, you know, somehow from 25 to 26. I just want to understand why this year you would see this strong growth happening and we didn't see that in 25.
R.J.M. Dassen
So that's a really good question. And indeed this is what we observed. So 24 was strong also in the non China business, 24 was pretty strong also in the DUV business for customers across the board, 25 disappointed a bit. If we look at 26, we see the market come back with our leading customers. Frankly, I think many of our customers are doing what we do, which is you put in the long lead time items, which in our case is more the EUV and you take a bit more flexibility in your shorter lead time items, which is the DUV business. I think that's what they've done for a significant part of the year. We actually could see the non China DUV business come back in the last months of the year and we frankly see that trajectory continue into 2026. So you're right in that we found that 25 non China DUV business disappointed, that is clearly the case. But we do see a, you know, a reversal of that trend in the last months of the year and see that reversal continue into 2026.
Francois Bouvignies
Thank you.
R.J.M. Dassen
Thank you.
Operator
We are now going to proceed with our next question and the questions come from the line of Chris Caso from Wolfe Research. Please ask your question.
Chris Caso
Yes, thank you, Good morning. My question is with regard to the expected timing of deliveries within the backlog and you mentioned a few things in your earlier comments, you know, including, you know customers recognizing that capacity may be tight, there is availability of customer clean room space. I'm not sure you wish to quantify, you know, how much of the backlog is expected to ship in 26, but would you say that timing of those expected deliveries is stretching out, you know, as compared to you know what's happened over the past few quarters?
R.J.M. Dassen
Chris, I think the second-half will be stronger than the first half. But I would say that's a function of what I just said, which is A, the availability of fab space of our customers and B, our continuous quarter on quarter ramp of move rate. So as a result we expect the second-half to be stronger than the first half of this year, that's the way we certainly model our shipments in discussion with the customers, but clearly you know quite a bit of the order intake that we had in Q4 and clearly you know part of the backlog is for 27, that is pretty clear and it is for 27, right. So the majority, the lion's share of the orders that came in Q4, some of it is 26, but the lion's share will be for 27.
Chris Caso
Thank you. My follow up question is with regard to gross margins and you spoke about that a bit, but perhaps you could clarify, you know what are the headwinds and tailwinds with respect to gross margin for this year? You know, I presume that China is one factor, but you know, what are the factors that cause you to be on the upper end or lower end of gross margins as you go through the year.
R.J.M. Dassen
I wouldn't say it's China per se. I would say it's immersion, right. So immersion tools, immersion is a significant contributor to the gross margin. As I mentioned before, we do expect the immersion sales this year to be below 2025, which is not the result of demand, but it's result of supply constraints on the immersion side. So that is a bit of a drag. Then you see quite a bit of DUV sales. As we said, we also expected DUV sales which was fairly low in 2025. We already saw that reverse itself in the last months of the year and we see that reversal continue into this year. But DUV tools come with lower gross margins. So that's a drag on the gross margin. On the EUV side, there is a bit of a mix effect because we have you know, NXE:3600Ds in the year that we didn't have that much in 2025. So and then you know, if we have a bit more High NA then of course that also comes with a slightly depressing effect on the gross margin. So that's all the negatives in terms of all the positives, I would say, you know, higher EUV numbers, right. So we're clearly looking at a significant step up in the number of EUV tools this year and that is margin accretive. So that's for the positive side. And as I mentioned, the big swing factor as I look at it today is on installed base. And to the extent that the installed base will manifest itself in a positive way, high demand for upgrades, which you know at least theoretically you could assume to be the case this year with all the appetite for capacity additions that our customers have, that should be helpful on the gross margin. So those are all the puts and takes as I see it for the gross margin this year.
Chris Caso
Very helpful. Thank you.
R.J.M. Dassen
You're welcome.
Operator
We are now going to proceed with our next question and the questions come from the line of Tammy Qiu from Berenberg. Please ask your question.
Tammy Qiu
Hi, thank you for taking my question. So the first one is on logic road map. So over the next few years, we do have A16, A14, A14C and A10. Can you confirm that for every single generation, are we still going to have EUV insertion of couple of layers or some of the customers really try to minimize the incremental EUV layers, please.
Christophe Fouquet
Well, so let me try to answer that. So I think if you look at, you know, the midterm, so we talked about 2-nanometer, indeed we're going to go to A16, which is very similar to 2-nanometer. To be honest, this is not a big difference. I will skip that. We see EUV layers increasing again at A14 as we discussed in the past, you know, most probably 10% to 20%. We see that being even more true for A10 where the structure change could call for even more EUV layers. So that's a bit the view we have all the way to A10. And in the discussions with our foundry customers, again, there's a lot of focus on that because this is key in enabling their future technology. So that's a bit where we see today on the foundries.
Tammy Qiu
OK, thank you. And I have a follow up also on capacity issue. So I remember that back in 2021 you were very clear about you will do 90 EUV tools and that is the capacity we need. Then of course, you know the unfortunate 2022 happened, so we took a pause on that and it seems like today your capacity addition plan has been more cautious than you were previously. If there is any reason for that or just basically after 2022, it's better to take a cautious approach from a capacity perspective.
R.J.M. Dassen
I think I tried to explain, but I guess I didn't completely succeed in that. So what I said is what we did in the earlier years of this decade is to put in what we call the long lead time items, which means that you know, anything that takes more than let's say 12 to 18 months to get done, we did right. So we built additional factory, we put in equipment, etcetera, etcetera. So we built clean rooms. So all of the things that take time we did now. So that's good news. So that gives you more flexibility. But as I mentioned before, you cannot from one year to the other move from a move rate, an annual move rate of 44 to 80 in one year's time simply doesn't work because you need to take in people, you need to hire people, you need to train those people. And you cannot double that in one year's time. That needs to be a gradual approach. So this is the process that we're in right now because we also took a decision back in 2022-2023. We're not going to put in people for an output of 90 because that would make no sense, they would have nothing to do and it would be very, very costly. So we're gradually moving our move rate up. So there's our supply chain, same story there. They're also gradually quarter on quarter moving up their move rate. And in that way, you know we will very meaningfully increase our capacity over what we had in last year. So that's what we're doing. So we have the structural big investments to get to 90 and now we're gradually moving our move rate up in order to move our annual capacity to cater to the demand. And we think that our increase in capacity goes nicely hand in hand with the completion of fabs by our customers such that we will not be the limiting factor in them being able to increase their capacity.
Christophe Fouquet
Yeah, maybe to add to that, Tammy. So I think what we said you know back in 2026. So we said that the major factor in fact on tool delivery would be the execution of our customers. Because you have to realize a lot of decisions have been made in the last few months. And this also means that they are extremely active in putting capacity in place etcetera, etcetera. And you know in 2026 as we just said, we can nicely follow basically right now their ambition, which is good. When it comes to beyond 2026, as you know, the lead time on our EUV machines is at least 12 months, which means that as we speak we are capable to have that discussion with our customers looking at next year basically. And as we do that, we can adjust basically our planning exactly in the way Roger mentioned it. But so far you know if we look at the short midterm, we are capable to nicely follow basically what our customers are asking for. So I think I sense a bit some concern that we may be the bottleneck basically for our customers. This is not the case, certainly not this year and again for next year. We have plenty of time to continue to follow basically their demands. So I just want to make that clear, what you described is the process and the flexibility we have thanks to the investment we have made on our 90 capability for EUV and 600 for DUV to follow basically very carefully what our customers are going to need in the next few quarters.
Jim Kavanagh
OK, Unfortunately, we've run out of time. But if you were unable to get through on this call and still have questions, please feel free to contact the ASML Investor Relations department with your question. So now on behalf of ASML, I would like to thank you for joining the call with us today. Operator, if you could formally conclude the call, I would very much appreciate it. Thank you.
Operator
This concludes ASML's 2025 fourth quarter and full year financial results conference call. Thank you for participating. You may now disconnect.
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