ASML CEO Warns US China Export Curbs Could Spur Rival Technologies

Disco Corporation reported preliminary non-consolidated sales of ¥118.5 billion for the quarter ended September 2026, up from ¥85.3 billion a year earlier, with first-half sales of ¥213.6 billion versus ¥160.8 billion in the prior-year period. The semiconductor equipment maker also received a Zacks Rank #1 (Strong Buy) after analysts steadily raised earnings estimates over the past three months. The preliminary figures came in comfortably above the prior year and ahead of earlier non-consolidated guidance, reinforcing the near-term earnings story. The company continues to flag volatile semiconductor and electronic components demand, leaving cyclicality risk embedded in its investment case. Two fair value views in the Simply Wall St Community on Disco span roughly ¥25,000 to ¥81,000.

ASML Holding N.V. is scheduled to report third-quarter fiscal 2026 earnings on Oct. 14, before market open, with the Zacks Consensus Estimate pegged at $13.18 billion in sales and $12.47 per share. The company has delivered a four-quarter earnings surprise of 3.91%, on average, and its Earnings ESP of +4.49% with a Zacks Rank #3 points to a likely earnings beat. During the quarter, ASML announced a collaboration with Xanadu Quantum Technologies Limited to advance lithography processes for photonic quantum hardware, expanded its strategic partnership with Samsung Electronics in High-NA EUV lithography, began construction of a second major industrial campus in the Brainport region of the Netherlands expected to cover approximately 350,000 square meters and accommodate up to 20,000 workplaces, and extended its collaboration with Intel, whose Panther Lake production uses ASML's High NA EUV lithography. Management expects 2026 advanced foundry Logic revenues to rise about 25%, Memory revenue to increase 75%, EUV revenues to grow roughly 45%, and DUV, metrology and inspection revenue to increase about 25%, with customer commitments extending into 2027 and 2028. China is expected to account for roughly 20% of 2026 sales, leaving ASML exposed to changes in export restrictions, while the stock trades at a forward price-to-sales ratio of 11.74 versus the industry average of 11.11.

Applied Materials announced that the UCLA Samueli School of Engineering will join its EPIC Center in Silicon Valley as a research partner, with researchers working alongside Applied's scientists and engineers to shorten the time it takes to move semiconductor breakthroughs from research to commercialization. The collaboration will focus on 3D chip scaling, advanced packaging and the discovery of new materials for improving energy-efficient AI compute performance, and will complement UCLA's Semiconductor Hub, which Applied joined as a co-founding member earlier this year. Dr. Prabu Raja, President of the Semiconductor Products Group at Applied Materials, said the EPIC Center will convene the industry's top innovators to accelerate the path from breakthrough research to full-scale manufacturing, while Ah-Hyung "Alissa" Park, Ronald and Valerie Sugar Dean of UCLA Samueli, said the collaboration builds on the school's legacy of pioneering semiconductor research. UCLA researchers will gain access to advanced chipmaking tools so new ideas can be validated and tested in a commercial fab environment. Applied's EPIC Center, which the company describes as the largest-ever U.S. investment in advanced semiconductor equipment R&D, is on track to become operational in 2026.

Tesla and SpaceX have committed an initial $16.8 billion to Terafab, Elon Musk's plan to build one of the world's largest chip-making complexes in Grimes County, Texas, covering more than 100 million square feet and expected to start manufacturing chips by 2029. Intel Corp. joined the project in April, committing to design, make and package chips, and Musk has said the plant will use Intel's next-generation 14A process, a significant boost for an Intel foundry business that lost more than $10 billion at the operating level in 2025. Musk shut down speculation that Taiwan Semiconductor would help run the Texas plants, writing on X that Tesla and SpaceX will build and run the fab themselves, with TSMC at most given leased space inside the complex. The vertically integrated facility is designed to handle chip manufacturing, packaging and testing under one roof, with chips mostly built for edge computing and inference to power Tesla's Optimus robots and Cybercabs along with high-performance processors for SpaceX's planned space-based data centers. Investors positioned for the buildout could look to chip equipment makers such as ASML Holding, Applied Materials, Lam Research and KLA Corp, packaging and testing players including Amkor Technology, ASE Technology and Teradyne, materials and utilities suppliers such as Linde and Entegris, power and electrical infrastructure names including Eaton, Vertiv, Quanta Services and GE Vernova, or semiconductor ETFs such as the VanEck Semiconductor ETF and iShares Semiconductor ETF.

Applied Materials now expects its Applied Global Services business to grow more than 20% in 2026 and to maintain a sustainable long-term annual growth rate in the mid-teens. In the third quarter of fiscal 2026, AGS revenues reached a record $1.78 billion, up 22% year over year, while non-GAAP operating margin rose to 30.1% from 27.3%. More than 37,000 chambers are connected to AIx software for monitoring, diagnostics and predictive analytics, and the company added more than 1,500 manufacturing and AGS support employees in the quarter as it plans to double quarterly system output from current levels by 2028. China represented 28% of total revenues in the third quarter of fiscal 2026, up from 27% in the second quarter, and Applied Materials now expects China revenues to increase in 2026, led by 28-nanometer foundry-logic investment. Applied Materials expects non-GAAP earnings of $4.02 per share, plus or minus 20 cents, indicating 85% year-over-year growth at the midpoint, while the Zacks Consensus Estimate suggests growth of 87%.