#ASML

Canon will begin operations at its expanded lithography equipment factory in Utsunomiya, Japan, this September, its first expansion in 21 years. Aimed at capturing AI-driven semiconductor demand and challenging ASML, Canon invested $345M in the facility and it will use both UV and nanoimprint lithography (NIL). NIL offers cost and energy savings. Production is projected to reach full capacity by 2027, increasing Canon’s total annual output by 30%. Canon hopes NIL will give it a foothold amidst rapid growth in the AI infrastructure market.

ASML, the Dutch lithography leader, is facing growth challenges due to U.S. trade policies and escalating geopolitical uncertainties. CEO Christophe Fouquet warned the company may not meet its 2026 growth targets. Vulnerability to potential U.S. trade restrictions and rising prices have created a challenging market environment. Investor concerns triggered a significant drop in ASML shares. While Q2 2025 results show strong revenue and net profit, the future outlook remains uncertain.

Leading foundries are scaling back their reliance on ASML’s High-NA EUV lithography machines, delaying adoption due to unexpected demand softening and the rise of new transistor architectures like GAAFET. This has led some institutions to lower price targets for ASML. Despite short-term adjustments, ASML’s established EUV technology remains crucial for advanced chip manufacturing, and long-term prospects are bolstered by AI-driven demand.