⚠ Fewer Machines Sold Means Fewer Future BladesModerate threat

The razor-and-blades model has a dependency worth naming: the blade revenue grows only as long as razors keep being sold. The installed base — and the service annuity it generates — expands because ASML ships more machines each year than are retired. In a deep or prolonged equipment downturn, when system sales slump, the growth of the installed base slows, and with it the future growth of the service stream. The annuity is a floor, but a floor that rises fastest when the equipment business is booming and more slowly when it is not.

There is also a longer-term ceiling: the service revenue per machine is ultimately tied to the machines running in advanced production, and if leading-edge fab expansion ever stalled for years, the installed base would plateau and the annuity's growth would fade toward maintenance-only levels. None of this is a near-term worry — the fleet is growing rapidly and the AI build-out is adding machines fast — but it is a reminder that the service annuity, wonderful as it is, is not fully independent of the cyclical equipment business it sits on top of. The blades are recurring and sticky, but their growth is chained, with a lag, to how many razors the cycle — and the export rules that govern a market worth 29% of 2025 sales¹ — lets ASML sell.