AI boom drives surge in lithography machine demand! ASML aims to raise prices, but TSMC says “no”

According to Zhitong Finance APP, media sources familiar with the matter report that ASML (ASML.US) is planning to raise the prices of its chip manufacturing equipment, which may lead to disagreements with its largest client, TSMC (TSM.US). The report states that TSMC has expressed opposition to the Dutch equipment manufacturer's price hike plan.

ASML produces cutting-edge extreme ultraviolet (EUV) lithography machines essential for manufacturing advanced semiconductors. Driven by the artificial intelligence (AI) boom, demand for the company's equipment is surging. In a report released on Monday, RBC Capital Markets analysts including Srini Pajjuri stated that ASML’s clients, including TSMC, Samsung Electronics, and SK Hynix, are delivering strong performance, indicating that the current environment is “mature” for a price increase.

ASML Chief Financial Officer Roger Dassen raised the possibility of adjusting the price of the company’s lower-spec EUV equipment—low numerical aperture EUV lithography machines (low NA EUV)—during the earnings call on Wednesday. He said: “We are continuously improving the production efficiency of low NA EUV, so this naturally gives us ample room to further increase prices in the future.” He added that, given the long delivery cycle for equipment orders, any price adjustments would not “immediately reflect in prices as soon as tomorrow.”

ASML also stated that one of its customers, Intel (INTC.US), has started using the company’s most advanced lithography machines for chip production. Reportedly, Intel Foundry has begun mass production of certain Intel Core Ultra Series 3 processors (codenamed Panther Lake) on its Intel 18A process node using ASML’s High Numerical Aperture Extreme Ultraviolet (High NA EUV) lithography technology, making it the world’s first to achieve high-volume shipment of logic chips using High NA EUV.

High NA EUV is ASML’s most advanced lithography technology, allowing for more precise patterning and the creation of more advanced chips. ASML CEO Christophe Fouquet stated that this demonstrates the strong commercial viability of the equipment. Previously, TSMC indicated that each unit of such equipment sells for over 350 million euros (about $410 million), making the cost prohibitively high for mass production, though the company will still use it for research and development. Intel’s early adoption helps to dispel market doubts regarding this technology.

On Wednesday, ASML released its Q2 2026 financial report and announced its second upward revision of its full-year guidance in 2024. The report showed that ASML’s Q2 sales rose by 21% year-on-year to 9.33 billion euros, far exceeding analysts’ average expectations of 8.85 billion euros. Net profit reached 2.92 billion euros, also beating the market’s anticipated 2.64 billion euros. The gross margin was 54.0%, better than the expected 52%, mainly benefiting from the increased proportion of high-margin service income.

Given the strong performance momentum, ASML raised its 2026 full-year net sales forecast to 43–45 billion euros and its gross margin forecast to 54%–56%. This marks the company’s second upward revision this year, following its April adjustment from 34–39 billion euros to 36–40 billion euros. The new guidance implies that the company’s year-on-year revenue growth in the second half of the year will rise to about 45%–55%, significantly higher than the 21% in Q2, indicating the company will enter a period of high growth in the latter half of the year. Meanwhile, ASML announced capacity expansion plans to meet the continuously growing market demand for its lithography machines.