ASM International
Sells capital equipment (ALD, epitaxy, PECVD, vertical furnaces, PEALD) to chipmakers, plus a growing high-margin recurring Spares & Services annuity attached to the installed base. R&D-heavy, fab-light; revenue is cyclical and tied to leading-edge WFE (wafer fab equipment) capex.
Earnings, margins, COGS & capex
ASM delivered record FY2025 profitability (EUR 3.2B revenue, 51.8% gross margin, 30.2% operating margin) and accelerated into 2026 with a record-margin Q1 (53.3% gross, 33.1% adj operating). Growth is led by ALD for advanced logic/foundry (gate-all-around) plus a fast-growing Spares & Services annuity (+23% cc in Q1). Guidance points to a materially stronger 2026, with Q2 stepping up to ~EUR 980M and H2 expected above H1. Balance sheet is net cash. The 2025 soft patch was real: Q2 2025 book-to-bill fell to 0.8 and management guided book-to-bill below 1 through H2 2025.
Income statement — where each revenue dollar goes
% of revenueOf every $1 of revenue, ~0¢ is cost of goods and ~0¢ operating expense, leaving ~100¢ of operating profit (~1¢ net).
Revenue trend
Margins
rising, above the 47-51% 2026-2030 target range on favorable mix + efficiency programs
record levels, above the 28-32% target range
up strongly YoY (adj net +EUR 54M YoY) on volume + margin
COGS structure
COGS is dominated by high-precision mechanical/vacuum subsystems, RF power, gas-delivery and flow components, and materials/precursors; leverage on fixed cost plus manufacturing-efficiency programs drove the record ~52-53% gross margin. Favorable product mix (leading-edge ALD) is a key gross-margin tailwind.
Capex
Fab-light model; capital spend on cleanrooms, R&D/pilot lines and capacity expansion is modest relative to peers. Company targets >EUR 1B annual free cash flow by 2030 (up from EUR 534M in 2024), implying disciplined capex against rising revenue. Exact FY2026 capex not separately disclosed.
Latest earnings
Beat — revenue at the high end of the EUR 830M +/-4% range and record margins; shares rose on the print
Q2 2026 revenue guided to ~EUR 980M +/-5% cc; H2 2026 expected stronger than H1; memory to show healthy 2026 growth, China YoY growth, power/analog gradual recovery. Mid-term: 2027 revenue target EUR 3.7-4.6B (post-FX; EUR 4.0-5.0B pre-FX), gross margin 47-51%, operating margin 28-32%. 2030 target >EUR 5.7B revenue, operating margin above 30%, and >EUR 1B FCF.
- ALD market share
- >55% in the segments ASM competes in (leadership)
- Q1 2026 gross margin
- 53.3%
- Q1 2026 adj operating margin
- 33.1% (record)
- Spares & Services growth
- +23% cc YoY (Q1 2026); equipment +14% cc
- Cash position
- ~EUR 1B, net cash positive
Growth drivers
- Gate-all-around (GAA) logic transition — each node adds ALD/PEALD steps, structurally increasing ALD intensity per wafer
- Advanced foundry/logic capex (TSMC, Samsung, Intel) for 2nm-class and below
- High-bandwidth memory (HBM) and DRAM scaling lifting deposition content
- Fast-growing recurring Spares & Services annuity (+23% cc in Q1 2026) on an expanding installed base, aided by outcome-based service deals and high tool utilization
- Expanding epitaxy (Epi) position beyond core ALD leadership
- AI-driven broadening of leading-edge demand and new workloads
Bull & bear
ASM is a pure-play on the highest-growth corner of semiconductor equipment — ALD — where node transitions structurally increase its content per wafer, and it is compounding that with record margins, a rising services annuity, and a net-cash balance sheet.
- Structural ALD-intensity growth: every GAA/advanced node adds deposition steps ASM disproportionately captures with >55% share in its segments
- Record profitability (53.3% gross, 33.1% adj operating in Q1 2026) already running above mid-term targets, showing pricing power and mix
- Recurring Spares & Services (+23% cc) turns an installed base into a growing, less-cyclical annuity
- Clear management roadmap: EUR 3.7-4.6B revenue by 2027 and >EUR 5.7B by 2030 with >EUR 1B FCF (from EUR 534M in 2024)
- Net-cash balance sheet (~EUR 1B cash) funds R&D and shareholder returns through the cycle
- AI-driven leading-edge capex broadening demand across logic, memory (HBM) and China recovery
ASM is a small, single-category, deeply cyclical equipment vendor whose record margins and premium valuation assume an uninterrupted leading-edge capex cycle and durable ALD share against three much larger platform competitors.
- Cyclicality is real and recent: book-to-bill fell to 0.8 in Q2 2025 and stayed below 1 through H2 2025, and Q1 2026 FCF was negative on working capital — the cycle can turn fast
- AMAT, Lam Research and Tokyo Electron are far larger, fund competing ALD/deposition tools, and can bundle across the fab
- Customer concentration: demand hinges on a few leading-edge foundries/memory makers pushing nodes on schedule (tool reuse and Intel 18A slippage already hit 2025 orders)
- China export-control tightening caps a material end-market and seeds a future domestic competitor
- Premium valuation (~$55B on ~EUR 3.2B / ~$3.5B FY2025 revenue, ~15-16x trailing sales and a ~50x-ish P/E) prices in sustained double-digit growth and >50% gross margin — leaves little room for a capex air-pocket
- FX headwind: EUR reporting against USD-denominated semi capex can mask underlying unit demand (reported Q1 2026 growth was +3% vs +16% cc)
What it is worth
Peer WFE multiples (EV/revenue, P/E) cross-checked against growth and margin premium; context only, not a price target or recommendation.
A WFE capex air-pocket or China export tightening pushes book-to-bill below 1 (as in H2 2025), stalls revenue growth, and compresses the ~15x trailing multiple materially given the concentrated, cyclical exposure.
Mid-teens growth toward the EUR 3.7-4.6B 2027 midpoint with margins in the 47-51% gross / 28-32% operating bands sustains a premium-but-rangebound multiple as the cycle normalizes.
Sustained high-teens revenue growth to the top of the 2027 range (EUR 4.6B) with margins above target supports the premium multiple holding or expanding; ALD intensity per node and the services annuity compound the story.
At ~$55.3B market cap (~EUR 47.6B) on ~EUR 3.2B (~$3.5B) FY2025 revenue, ASM trades at roughly 15-16x trailing EV/revenue (net cash of ~EUR 1B trims EV modestly below market cap) and a rich (~40-50x-range) P/E — a clear premium to larger WFE peers (AMAT, Lam, TEL). On the 2027 revenue-target midpoint (~EUR 4.1B / ~$4.5B) the multiple compresses to ~11-12x forward EV/revenue. The premium is anchored to ALD leadership, ~52-53% gross margin, 30%+ operating margin, net cash, and a multi-year GAA-driven growth roadmap (EUR 3.7-4.6B by 2027, >EUR 5.7B by 2030 with >EUR 1B FCF). It is sensitive to WFE-cycle timing and China policy.
SWOT
Strengths
- Undisputed ALD technology leader with >55% share in the segments it competes in — the fastest-growing WFE deposition category
- Record and structurally high margins (52-53% gross, 30-33% operating) with a net-cash balance sheet
- Growing high-margin recurring Spares & Services revenue (+23% cc) reduces cyclicality
- Deep incumbency at leading-edge foundry/logic customers where ALD steps multiply with each node
Weaknesses
- Far smaller and less diversified than Applied Materials or Lam Research — concentrated in deposition, not a full front-end platform
- Highly cyclical, capex-driven demand — book-to-bill fell to 0.8 in Q2 2025 and stayed below 1 through H2 2025 during a soft patch
- Customer concentration among a handful of leading-edge chipmakers (TSMC, Samsung, Intel, memory makers)
- Exposed to FX (EUR reporting vs USD-priced semi capex — Q1 2026 reported growth was only +3% vs +16% cc) and to China export-control shifts
Opportunities
- GAA and future node transitions raise ALD/PEALD intensity per wafer for years; single-wafer ALD TAM guided from ~$3.0B (2024) to $5.1-6.1B by 2030
- Expansion into epitaxy (Epi) and adjacent deposition markets beyond core ALD
- HBM/DRAM and advanced-packaging deposition content growth
- AI-driven leading-edge capex broadening the customer base and utilization
Threats
- Larger platform rivals (AMAT, Lam, TEL) pushing competing ALD/deposition tools and bundling advantages
- US/EU export controls limiting China sales; China building domestic deposition capability over time
- Semiconductor capex cyclicality — an AI-capex digestion or memory downturn compresses orders (tool reuse at TSMC 3nm and Intel 18A challenges already dented 2025 bookings)
- Customer capex concentration: a single foundry pushing out a node ripple-effects ASM's order book
Moats, dependencies & bottlenecks
Moats
High through current node roadmap >55% share in single-wafer ALD segments it competes in; deep process know-how co-developed with leading-edge customers
Tools qualified into a customer's process flow are extremely costly to displace; ASM is designed into GAA recipes
Moderate-Strong Growing Spares & Services (+23% cc) creates a sticky, high-margin recurring stream
Focused R&D concentration in ALD/Epi outpaces generalist rivals in its niche, but is dwarfed by AMAT/Lam total R&D
Dependencies
Demand / customer GAA and advanced-node capex is the primary revenue driver; node push-outs directly hit orders
Demand / customer HBM/DRAM scaling adds deposition content; memory cyclicality swings demand
MKS, Advanced Energy, VAT, Entegris components are critical inputs; shortages constrain shipments
Regulatory / geopolitical Rules govern how much ASM can sell into a large end-market
EUR reporting vs USD-priced semi capex creates reported-revenue and margin FX sensitivity
Advantages
- Category leadership in the structurally fastest-growing deposition segment (ALD)
- Best-in-class margins with a net-cash balance sheet
- Recurring services annuity smoothing cyclicality
- Focused pure-play exposure to the GAA/leading-edge secular theme
Weaknesses
- Sub-scale versus AMAT/Lam/TEL as a full-platform vendor
- Single-category concentration and customer concentration
- High cyclicality and FX exposure
- Premium valuation leaves little margin for a demand air-pocket
Bottlenecks
- Component/subsystem supply (RF generators, vacuum, gas-delivery) can gate tool output during upcycles
- Working-capital intensity in a ramp — inventory/receivables build ahead of shipments (drove negative Q1 2026 FCF; days of working capital rose to 69 from 45)
- Customer node-transition timing controls order timing more than ASM's own capacity
- Skilled process/field-service talent to support a rapidly expanding installed base
Top signals & trends
Top signals
Demand and pricing/mix both strong entering 2026
Sequential acceleration signals a stronger year
Bearish / caution · Recent order softness (China normalization, Intel 18A, TSMC 3nm tool reuse) shows the cycle can wobble
Neutral / caution · Ramp-driven WC build, not a profitability problem, but watch cash conversion
Recurring annuity compounding faster than equipment (+14% cc)
Bullish (if delivered) · Management confidence in multi-year growth; execution-dependent
Trends
Raises ALD/PEALD steps per wafer — core structural tailwind for ASM
Broadens leading-edge logic + HBM demand and utilization
Adds deposition content in memory and packaging flows
Negative / uncertain · Caps China revenue and seeds future domestic competition
Order softness (H2 2025 book-to-bill <1) shows downside sensitivity
Ecosystem & competitor graph
Suppliers feed the company; customers pull from it. Line thickness shows the strength of each tie (supply-chain dependency, customer earnings contribution). Hover to isolate a tie.
RF power, vacuum, gas/flow subsystems critical to deposition tools
Precision RF/DC power delivery for plasma/ALD processes
Materials handling, filtration, precursors and specialty materials
Vacuum valves — essential vacuum-subsystem supplier to wafer tools
Leading-edge foundry; largest driver of GAA/advanced-node ALD demand
Foundry + memory; leading-edge logic and DRAM/HBM buyer
Advanced-node logic and foundry ramp customer (18A timing a swing factor)
DRAM/HBM leader; memory deposition demand
DRAM/HBM and NAND memory capex customer
Largest WFE vendor; broad deposition/etch/CMP platform including competing ALD tools
Deposition/etch leader; competes in ALD and adjacent deposition and can bundle across the fab
Major Japanese WFE maker with deposition/coater-developer breadth; direct ALD/furnace competitor
Batch/vertical furnace and ALD specialist — closest niche competitor to ASM's furnace/ALD lines
Process control, not deposition — adjacent WFE rather than head-to-head
Epitaxy/MOCVD and advanced-packaging deposition — overlaps ASM's expanding Epi push
MOCVD/deposition for compound semis; niche overlap in epitaxy