TSMC Opts Out of ASML's New Lithography Machines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy ASML?
Source: stocktwits
- Cost-Saving Strategy: TSMC's decision to forgo ASML's new lithography machines, which cost upwards of $400 million, is a strategic move aimed at saving billions and reflects a cautious approach to capital expenditure while enhancing profitability.
- New Technology Launch: TSMC introduced its A13 and N2U technologies, with production slated for 2029, where N2U will cater to chip manufacturing for phones and laptops, showcasing the company's competitive edge and innovation in the AI chip market.
- Market Reaction: ASML's stock fell 1% following TSMC's technology showcase, indicating market concerns regarding TSMC's advancements and the potential threat to ASML's future sales, which could impact ASML's market share.
- Industry Trend: With the global semiconductor market projected to grow by 22% to $772 billion in 2023, TSMC's decision reflects a broader industry shift towards simplified processes and advanced packaging rather than reliance on expensive hardware, signaling a transformation in the sector.
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Analyst Views on ASML
Wall Street analysts forecast ASML stock price to rise
12 Analyst Rating
12 Buy
0 Hold
0 Sell
Strong Buy
Current: 1458.970
Low
1385
Averages
1583
High
1911
Current: 1458.970
Low
1385
Averages
1583
High
1911
About ASML
ASML Holding N.V. is a holding company based in the Netherlands. The Company operates through its subsidiaries in the Netherlands, the United States, Italy, France, Germany, the United Kingdom, Ireland, Belgium, South Korea, Taiwan, Singapore, China, Hong Kong, Japan, Malaysia and Israel. The Company operates through one business segment which is engage in development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting of lithography, metrology and inspection systems. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
ASML Reports Strong Earnings, Stock Doubles
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- Robust Market Demand: Customers have indicated that memory chip demand is sold out for 2026, with supply constraints expected to persist, driving increased capital expenditures in advanced logic and memory markets, ensuring future growth potential for ASML.
- Enhanced Shareholder Returns: Despite record R&D spending, ASML plans a 17% increase in dividends and a €12 billion stock buyback program from 2026 to 2028, demonstrating a strong commitment to shareholders and healthy cash flow.
- Long-term Investment Value: With a forward P/E ratio of 39.3, ASML's valuation is high, yet its leadership in AI and semiconductor manufacturing, along with sustained high margins, positions it as an ideal choice for long-term investors.
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- Dividend Proposal: A final dividend of €2.70 per ordinary share was proposed, leading to a total dividend of €7.50 per share for 2025, reflecting the company's commitment to shareholder returns amidst strong performance.
- Management Appointments: The AGM approved the reappointment of Terri Kelly and An Steegen, along with the appointment of Benjamin Loh to the Supervisory Board, ensuring stability and continuity in leadership.
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See More
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- Cost-Saving Strategy: TSMC's decision to forgo ASML's new lithography machines, which cost upwards of $400 million, is a strategic move aimed at saving billions and reflects a cautious approach to capital expenditure while enhancing profitability.
- New Technology Launch: TSMC introduced its A13 and N2U technologies, with production slated for 2029, where N2U will cater to chip manufacturing for phones and laptops, showcasing the company's competitive edge and innovation in the AI chip market.
- Market Reaction: ASML's stock fell 1% following TSMC's technology showcase, indicating market concerns regarding TSMC's advancements and the potential threat to ASML's future sales, which could impact ASML's market share.
- Industry Trend: With the global semiconductor market projected to grow by 22% to $772 billion in 2023, TSMC's decision reflects a broader industry shift towards simplified processes and advanced packaging rather than reliance on expensive hardware, signaling a transformation in the sector.
See More
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- Technology Launch: TSMC introduced the A13 process and N2U technology, with A13 set for production in 2029 and N2U in 2028, aimed at addressing the growing demand for AI and mobile applications, thereby enhancing its competitive edge in the global semiconductor market.
- Cost Control Strategy: TSMC opted to continue utilizing existing extreme ultraviolet lithography machines instead of investing in new high NA machines costing $400 million each, which is expected to save substantial capital expenditures and further improve profit margins.
- Optimistic Market Outlook: Driven by surging demand for AI chips, TSMC raised its revenue outlook for 2026, with a 58% year-over-year increase in net income for the first quarter, indicating strong market demand and improved profitability.
- Innovation Expansion: At the North America Technology Symposium, TSMC showcased plans to expand its CoWoS technology, with larger chip stacking solutions on the horizon to meet future needs for integrated computing power and memory, further solidifying its technological leadership.
See More
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- Strong Customer Demand: ASML highlights that its customers are experiencing healthy demand, leading to expectations of increased production capacities in 2026 and 2027, which will further enhance ASML's performance and solidify its leadership in the semiconductor industry.
- Memory Chip Shortage: ASML's management noted during the latest earnings call that memory chip supply is unlikely to meet demand in the foreseeable future, which is positive news for Micron Technology investors, as its stock has surged 60% this year.
- Favorable Pricing Environment: Analysts anticipate Micron's non-GAAP earnings to increase nearly sevenfold this fiscal year, with DRAM and NAND flash prices expected to rise by 125% and 234%, respectively, making Micron stock a compelling buy for investors.
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- Revenue Guidance Upgrade: ASML has raised its 2026 revenue forecast to €38 billion, reflecting a 16% year-over-year increase, up from a prior expectation of 11.6%, driven by increased capital expenditures from customers, highlighting robust demand for advanced chips.
- Increased Customer Investments: ASML notes that customers, including TSMC and Samsung, are ramping up capital investments to meet surging demand, which will enhance their production capacities and further solidify ASML's leadership position in the semiconductor equipment market.
- Positive Outlook for Micron Stock: Micron's stock has surged 60% this year, with analysts expecting an additional 21% increase over the next year; 92% of analysts rate it as a buy, reflecting strong market confidence in its earnings growth potential.
See More
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- Strong Performance: ASML reported €8.8 billion in net sales for Q1 2026, achieving a gross margin of 53% and a net income of €2.8 billion, reflecting robust performance in the semiconductor sector.
- Robust Market Demand: Customers have indicated that memory chip demand is sold out for 2026, with supply constraints expected to persist, driving increased capital expenditures in advanced logic and memory markets, ensuring future growth potential for ASML.
- Enhanced Shareholder Returns: Despite record R&D spending, ASML plans a 17% increase in dividends and a €12 billion stock buyback program from 2026 to 2028, demonstrating a strong commitment to shareholders and healthy cash flow.
- Long-term Investment Value: With a forward P/E ratio of 39.3, ASML's valuation is high, yet its leadership in AI and semiconductor manufacturing, along with sustained high margins, positions it as an ideal choice for long-term investors.
See More
ASML Discloses Results of 2026 AGM
- AGM Resolutions: ASML held its AGM on April 22, 2026, where the statutory financial statements for the 2025 fiscal year were adopted, indicating a robust financial position that enhances investor confidence.
- Dividend Proposal: A final dividend of €2.70 per ordinary share was proposed, leading to a total dividend of €7.50 per share for 2025, reflecting the company's commitment to shareholder returns amidst strong performance.
- Management Appointments: The AGM approved the reappointment of Terri Kelly and An Steegen, along with the appointment of Benjamin Loh to the Supervisory Board, ensuring stability and continuity in leadership.
- Share Buyback Authorization: A proposal was made to authorize the management to repurchase up to 10% of ASML's issued share capital from April 22, 2026, to October 22, 2027, demonstrating confidence in the stock's value and a strategic response to market fluctuations.
See More
TSMC Opts Out of ASML's New Lithography Machines
- Cost-Saving Strategy: TSMC's decision to forgo ASML's new lithography machines, which cost upwards of $400 million, is a strategic move aimed at saving billions and reflects a cautious approach to capital expenditure while enhancing profitability.
- New Technology Launch: TSMC introduced its A13 and N2U technologies, with production slated for 2029, where N2U will cater to chip manufacturing for phones and laptops, showcasing the company's competitive edge and innovation in the AI chip market.
- Market Reaction: ASML's stock fell 1% following TSMC's technology showcase, indicating market concerns regarding TSMC's advancements and the potential threat to ASML's future sales, which could impact ASML's market share.
- Industry Trend: With the global semiconductor market projected to grow by 22% to $772 billion in 2023, TSMC's decision reflects a broader industry shift towards simplified processes and advanced packaging rather than reliance on expensive hardware, signaling a transformation in the sector.
See More
TSMC Launches Next-Gen Chip Manufacturing Technology
- Technology Launch: TSMC introduced the A13 process and N2U technology, with A13 set for production in 2029 and N2U in 2028, aimed at addressing the growing demand for AI and mobile applications, thereby enhancing its competitive edge in the global semiconductor market.
- Cost Control Strategy: TSMC opted to continue utilizing existing extreme ultraviolet lithography machines instead of investing in new high NA machines costing $400 million each, which is expected to save substantial capital expenditures and further improve profit margins.
- Optimistic Market Outlook: Driven by surging demand for AI chips, TSMC raised its revenue outlook for 2026, with a 58% year-over-year increase in net income for the first quarter, indicating strong market demand and improved profitability.
- Innovation Expansion: At the North America Technology Symposium, TSMC showcased plans to expand its CoWoS technology, with larger chip stacking solutions on the horizon to meet future needs for integrated computing power and memory, further solidifying its technological leadership.
See More
ASML Raises 2026 Revenue Guidance Amid Strong AI Demand
- Revenue Guidance Increase: ASML has raised its 2026 revenue guidance to €38 billion, reflecting a 16% year-over-year increase, significantly up from the previous 11.6% forecast, indicating robust growth in customer capital expenditures driven by strong AI infrastructure demand.
- Strong Customer Demand: ASML highlights that its customers are experiencing healthy demand, leading to expectations of increased production capacities in 2026 and 2027, which will further enhance ASML's performance and solidify its leadership in the semiconductor industry.
- Memory Chip Shortage: ASML's management noted during the latest earnings call that memory chip supply is unlikely to meet demand in the foreseeable future, which is positive news for Micron Technology investors, as its stock has surged 60% this year.
- Favorable Pricing Environment: Analysts anticipate Micron's non-GAAP earnings to increase nearly sevenfold this fiscal year, with DRAM and NAND flash prices expected to rise by 125% and 234%, respectively, making Micron stock a compelling buy for investors.
See More
ASML Predicts Continued Shortage of Memory Chips
- Memory Price Surge: ASML management predicts that the shortage of memory chips will persist, indicating that high memory prices are unlikely to disappear soon, which strongly supports earnings growth for memory manufacturers like Micron, with non-GAAP earnings expected to jump nearly sevenfold this fiscal year.
- Revenue Guidance Upgrade: ASML has raised its 2026 revenue forecast to €38 billion, reflecting a 16% year-over-year increase, up from a prior expectation of 11.6%, driven by increased capital expenditures from customers, highlighting robust demand for advanced chips.
- Increased Customer Investments: ASML notes that customers, including TSMC and Samsung, are ramping up capital investments to meet surging demand, which will enhance their production capacities and further solidify ASML's leadership position in the semiconductor equipment market.
- Positive Outlook for Micron Stock: Micron's stock has surged 60% this year, with analysts expecting an additional 21% increase over the next year; 92% of analysts rate it as a buy, reflecting strong market confidence in its earnings growth potential.
See More
