ASML Q2 2026 Earnings: Elon Musk's Terafab Demand Formally Included as EUV Capacity Sells Out Through 2027

Full-year 2026 outlook: ASML raised its full-year net revenue forecast to €43–45 billion ($49–$51 billion), a 16% increase at the midpoint from its earlier range of €36–40 billion . Q3 2026 is guided at €11.0–€12.0 billion in sales .

Terafab's Formal Inclusion in Capacity Planning

CFO Roger Dassen confirmed on the earnings call that ASML's 2027 and 2028 capacity expansion plans explicitly take into account demand from Elon Musk's Terafab project .

"We're in dialogue with all our customers and we know ... what their building plans are. Terafab is also part of those plans." — Roger Dassen, ASML CFO

Musk had previously addressed ASML employees in June 2026 about the project, a SpaceX-Tesla joint venture to build a chip factory in Texas costing at least $55 billion, with total investment potentially rising to $119 billion if fully built out . ASML CEO Christophe Fouquet has described Musk as "very serious" about Terafab, while cautioning that new projects of this scale could strain equipment supply .

Capacity Targets: 30% Expansion in 2027 and 2028

ASML announced plans to increase capacity for its low-NA EUV lithography machines by about 30% in 2027 and is considering another 30% expansion in 2028 .

• Nearly sold out for 2027: CEO Fouquet stated that ASML has "almost been able to receive all EUV orders needed for 2027" and has already locked in substantial 2028 EUV orders .
• Above the prior ceiling: JPMorgan analyst Sandeep Deshpande raised his price target, arguing ASML could deliver more than 110 low-NA EUV systems annually without adding new building space — well above the roughly 90-unit ceiling that had become the market's working assumption .

Impact on the Semiconductor Supply Chain

1. The EUV monopoly bottleneck intensifies. ASML is the sole supplier of extreme ultraviolet (EUV) lithography systems essential for fabricating the most advanced AI chips at 5nm and below. With 2027 EUV capacity already nearly sold out and Terafab absorbing additional allocation, other chipmakers — including TSMC, Samsung, and Intel — face tighter access windows and longer lead times for next-generation fabs .

2. AI demand is the primary driver. ASML's CEO described customer demand as "extremely strong" specifically for AI chipmaking tools . The Terafab project alone would consume a significant share of ASML's expanded output, compounding pressure on the existing order book .

3. Knock-on effects across the supply chain. ASML has warned that Terafab-sized megaprojects could create "knock-on effects across global chip manufacturing" by tightening supply of advanced lithography equipment . This strains not just ASML's own production, but the entire ecosystem of optics, mirrors, vacuums, and materials needed to build and operate EUV tools.

4. Geopolitical and allocation risks. With EUV supply effectively rationed by ASML's production ceiling, foundries and IDMs must place orders years in advance. The formal inclusion of Terafab in ASML's capacity planning signals that Musk's venture has secured a place at the table, potentially at the expense of other customers' timelines . ASML is restricted from shipping its most advanced EUV systems to China, further concentrating demand among a small group of Western and allied buyers.

Bottom line: ASML's Q2 2026 results confirm that the AI-driven semiconductor boom is in full swing, with revenue and margins beating expectations and full-year guidance raised sharply to €43–45 billion. The formal recognition of Terafab demand in its 2027–2028 capacity plans marks a structural shift — ASML's EUV monopoly now directly allocates a de facto scarce resource among the world's largest chip projects, creating a supplier-driven bottleneck that will shape the pace and geography of AI chip supply for years.