When considering the factors impacting the global chip supply, most people immediately think of major players such as AI data centers, smartphones, and electric vehicles. However, an emerging source of demand is the satellite sector, specifically the increasing usage of SpaceX's Starlink constellation, which has been identified as a significant driver of semiconductor demand. Each new satellite launched requires chips to function, and the ground terminals that connect users to these satellites add to this growing demand. This accumulation across numerous satellites and users represents an often underestimated demand force in the market.
The global semiconductor market is on a significant upswing, with figures reaching $791.7 billion in 2025 and expected to exceed $1 trillion by 2026. The current landscape is characterized by a supply-limited environment, primarily driven by AI workloads. However, satellite networks like Starlink are creating an additional demand curve that is rising rapidly. Furthermore, there are ambitious projects in the pipeline, such as Elon Musk's proposed TeraFab AI chip plant, which comes with a staggering projected cost of around $5 trillion. This suggests that the semiconductor industry is facing a period where production capabilities are struggling to keep pace with an insatiable appetite for chips.
ASML holds a unique position in this industry as the only manufacturer of extreme ultraviolet (EUV) lithography machines essential for crafting the most advanced chips. Every fabrication facility operated by leading companies such as TSMC, Samsung, or Intel relies on ASML's pioneering equipment. Consequently, every new avenue of chip demand, whether stemming from AI technology or satellite systems, ultimately translates to increased orders for lithography machines.
ASML's recognition of the growing satellite market signals a broadening of demand beyond the current AI landscape. The emergence of satellite networks provides a stable source of demand that remains unaffected by the dynamics of individual technologies.
For investors, the imbalance between supply and demand highlighted by ASML carries important implications for semiconductor pricing and investment allocation. A notable risk is the geopolitical environment, considering ASML's equipment is under export restrictions concerning China. Any further expansion of these restrictions could dramatically influence where and how quickly new fabrication capacity is developed.