Why is ASML focusing on advanced packaging?

ASML’s lithography outlook shifts toward advanced packaging

ASML’s stock has risen sharply year to date, but Bloomberg’s coverage highlights a key caution: the company’s gains are trailing parts of the broader U.S. chip sector. The divergence is tied to where the industry is directing its next wave of capex.

Instead of spending concentrated only on classic lithography steps, chipmakers are increasingly allocating investment to processes outside lithography—especially advanced packaging. Advanced packaging can improve performance and manage power/heat constraints by enabling multi-die integration, heterogenous chiplets, and more efficient system-level design.

The practical implication for ASML is that even though it remains central to semiconductor manufacturing (particularly leading-edge lithography), some near-term demand for equipment may be shaped by a more balanced technology stack. If the industry’s spending emphasis tilts toward packaging capability—where other suppliers and toolsets can benefit—then ASML’s revenue and orders may not keep pace with every segment of the supply chain.

For investors, the headline is about relative exposure. ASML is still a core enabler, but the market is watching whether its growth rate is synchronized with the sector overall. For chip companies, it signals a shift in how they chase performance: not just by refining wafer processes, but by changing how chips are assembled.

Advanced packaging spending also tends to be more tied to product architectures (chiplets, stacking, and interconnect approaches) than to a single lithography milestone. That can create a different timing profile for equipment purchases compared with wafer-only process ramps.

Overall, the story frames ASML’s near-term performance as linked to a sector-wide capex reallocation, with packaging gaining share relative to lithography.