ASM International posts record €1bn quarterly revenue on AI demand
ASM International has reported a record quarterly revenue of €1,003 million for the second quarter of 2026, up 20% year-on-year as reported and 24% at constant currency. The Almere-headquartered wafer-processing equipment maker beat the midpoint of its own guidance range of €980 million plus or minus five per cent, citing sustained investment in AI infrastructure as the primary demand driver.
Gross margin held steady at 51.9%, marginally above the 51.8% posted in Q2 2025, while the adjusted operating margin came in at 33.0%, virtually flat with the prior quarter's 33.1%. Adjusted net earnings rose €120 million year-on-year to €292.9 million, with a favourable currency swing contributing €22 million compared with a loss of €60 million in the same period a year ago. Free cash flow reached a record high of €355 million, partly reflecting a normalisation in working capital following a build-up in Q1 2026.
Revenue drivers and product mix
Leading-edge logic and foundry remained the dominant revenue stream. Chief executive Hichem M'Saad said demand at the 2nm node accelerated during the quarter, and the 3nm-to-7nm segment also saw a sales uplift tied to CPU and agentic AI workloads. ASM said its 1.4nm node business is on track to make its first meaningful revenue contribution in the second half of this year, with the company reporting market share gains in both atomic layer deposition (ALD) and epitaxy (Epi) technologies at that node. The company also highlighted recent customer wins in its molybdenum (Mo) ALD offerings at 1.4nm, a relatively novel process step that is attracting chipmaker attention as conventional tungsten contacts reach scaling limits.
Memory was the second growth vector. High-bandwidth memory (HBM) DRAM demand drove a solid increase in memory sales, and ASM said it was selected by an additional DRAM customer for its Epi solution during the quarter. The company is positioning itself to capture share in both ALD and Epi across multiple DRAM customers. Mature logic and foundry sales in China remained solid, though ASM said it expects this segment to ease slightly in the second half relative to the first.
Outlook and competitive context
For Q3 2026, ASM projects revenue of €1,100 million at constant currency, plus or minus five per cent, implying continued double-digit growth. Second-half revenue is expected to rise by more than 20% compared with the first half at constant currency, driven by leading-edge logic, the 1.4nm ramp, and incremental recovery in power, analogue and wafer segments. Notably, ASM said it now expects 2027 revenue to exceed the top end of the €3.7 billion-to-€4.6 billion range it set at its September 2025 Investor Day, citing stronger-than-anticipated wafer fab equipment (WFE) spending forecasts and order intake visibility.
The guidance upgrade is a meaningful signal for the broader semiconductor equipment sector. ASM competes in the deposition and epitaxy segments of the equipment market alongside larger players such as Applied Materials and Lam Research, as well as Japanese incumbents in specialist process steps. The sustained push by TSMC, Samsung and Intel towards sub-2nm nodes is generating a multi-year equipment upgrade cycle, and vendors with strong ALD and high-k dielectric process positions are benefiting disproportionately as new materials and architectures proliferate.
M'Saad described ASM as "a materials discovery company," framing its value proposition around precursor chemistry and atomistic process technology rather than tool throughput alone. That positioning could prove durable as chipmakers grapple with the physics constraints of advanced nodes, though any slowdown in AI capital expenditure among hyperscalers would quickly feed back into leading-edge foundry orders and equipment demand.
On the management front, ASM confirmed it plans to nominate Chris Figee as CFO, with a December 2026 start date subject to shareholder approval at an extraordinary general meeting expected in March 2027. Incumbent CFO Paul Verhagen will remain in post until the transition is complete.