Fitch Affirms ASML's 'A+' Rating on Unrivaled Lithography Leadership

Fitch Ratings on Thursday affirmed ASML Holding N.V.'s (NASDAQ:ASML) Long-Term Issuer Default Rating at 'A+' with a Stable Outlook, underscoring the company's critical and dominant role in the global semiconductor manufacturing supply chain.

Dominant Market Position

The rating reflects ASML's unparalleled position in the market for lithography tools, which are essential for producing advanced microchips. According to Fitch, ASML's credit strength is anchored by its status as the exclusive producer of the industry's most advanced extreme ultraviolet (EUV) lithography machines and its commanding market share.

Key factors supporting the rating include:

• A market share of nearly 90% in the immersion deep ultraviolet (DUV) segment.
• A strong order book, with its most revenue-generating low numerical aperture EUV tools nearly fully sold out for 2027.
• Aggressive capacity expansion plans, with a projected 30% increase in tool capacity for 2027 and a further 30% expansion planned for 2028.

Financial Outlook and Projections

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Fitch projects a strong financial trajectory for the Dutch equipment maker, forecasting average year-over-year revenue growth of close to 30% for 2026-2027. The rating agency also anticipates gross margins will hold at approximately 55% in 2025 before gradually improving to 56% by 2029.

The agency expects ASML to maintain positive cash flow generation even through a moderately weak phase of the semiconductor cycle or under the pressure of heavier export restrictions. This resilience is a key component of its stable credit profile.

Key Risks and Constraints

Despite the positive assessment, Fitch identified several business risks that constrain the rating. The company faces significant customer concentration, with its four largest customers accounting for a combined 61% of total sales in 2025.

Geopolitical risks also factor heavily, particularly in its customer base. Customers in Taiwan and South Korea represented 26% and 25% of 2025 sales, respectively. Meanwhile, revenue from China is expected to fall to approximately 20% of total revenue in 2026, down from 29% in 2025. Fitch stated that a rating downgrade could occur if ASML loses significant market share or if its EBITDA net leverage rises above 0.8x on a sustained basis.