ASML sells the most important machines in the chip industry. Now everything indicates that they will be more expensive
ASML, the only company in the world capable of manufacturing lithography equipment extreme ultraviolet (EUV) needed to produce the most advanced chips, is preparing for a rise in costs in its machinery. And the first to stand up has been, precisely, its most important client: TSMC. And according to has revealed The Information, the Taiwanese manufacturer is beginning to resist negotiations. Why is it important. ASML is the bottleneck of the entire semiconductor industry. Without their machines, neither Nvidia, nor Apple, nor TSMC, nor Samsung would be able to manufacture the chips that fuel the artificial intelligence boom. That it decides to raise prices, something The Information says it has rarely done in its history, is a sign of the extent to which demand for AI has given the company bargaining power it didn’t have before. In detail. ASML’s plans affect its two large families of machines. On the one hand, according to has confirmed The company’s own financial director, Roger Dassen, during the presentation of second quarter results, there is a way to increase the price of low numerical aperture (Low-NA) EUV systems, its most in-demand technology. On the other hand, ASML has already told several customers, including Chinese manufacturers, that their DUV (deep ultraviolet, somewhat less advanced but still essential) equipment will cost 10% more, according to share the middle. Some Chinese clients have already agreed to pay that extra cost; TSMC, on the other hand, has not wanted to jump through hoops for the moment. Each new generation of ASML machines processes more wafers per hour and improves etching precision, which means more and higher quality chips for its customers. It is what the company itself calls “value-based pricing”, since the logic that follows is that if its equipment generates more economic benefit for the factories that use it, ASML wants to keep a part of that additional benefit, as Dassen explained in the conference with analysts. Between the lines. TSMC’s anger has its explanation. And the Taiwanese manufacturer has been defending for years that You do not need to jump to the very expensive High-NA equipment (which exceed 350 million euros per unit) and that can continue to squeeze out its cheaper Low-NA machines through design improvements and computational photolithography techniques. In fact, according to they count From Tom’s Hardware, its entire manufacturing roadmap until 2030 is based on that premise. If ASML makes precisely those Low-NA machines more expensive as their performance improves, the cost advantage that TSMC had built with that strategy is reduced. Additionally, TSMC needs to buy dozens of these machines for its new plants in Taiwan, the United States and Japan, so even a moderate increase can add billions of dollars to its investment. It is also worth noting that ASML has practically sold its production capacity until 2027 and a good part of 2028, with prices already agreed in those contracts. That means that, in practice, the company could only apply the new rates to orders delivered from the second half of 2028. TSMC will not notice the blow immediately, but it knows that what is negotiated now will mark the price of hundreds of machines in the coming years. And now what. The pulse comes at a time of historic results for ASML. And on Wednesday the company raised its sales forecast for 2026 to a range of between 43,000 and 45,000 million euros, well above what the market expected, according to collect Bloomberg. Gross margin will also improve to 56%, up from 53% previously forecast. To meet demand, ASML plans to increase its manufacturing capacity of its most important EUV machines by 30% this year, and is studying another similar increase for 2028. Cover image | ASML In Xataka | The war in Iran and the Chinese veto redraw the world map of helium for semiconductors
