ASML 2Q'26: Time to Flex Pricing Power

Back in 1Q’26 call, ASML management was asked whether they are willing to flex their pricing power given how demand for chips seems to materially outweigh the supply. ASML management indicated to prefer more measured approach across different set of customers throughout the cycle. From 1Q’26 call (emphasis mine):

“Now in our model of pricing, as you know, our model of pricing is not based on the squeeze that our customers find ourselves in. That’s not the way we do business. The way we do business is that we look at the value that we provide to our customers, generation on generation, tool on tool, and we take our fair share in that. And you might say in the current climate, can’t you squeeze out a little bit more? I understand that. But it’s also true that when the market is good, it goes down a little bit and the customers are going through more difficult times that it also pays these fees.

So fundamentally, we believe that the model that we have is a fair model. It’s also a model that is fair to all the players because I would find it difficult to explain why we’re charging more in, let’s say, the memory environment versus the logic environment. That’s just not the way we do business. So we’re very, very happy with the business model we have, which is based on the value of our tools, and we would gladly continue with that approach.”

Just a quarter later, there is a noticeable shift in tone which I will discuss behind the paywall.

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