ASML Shares Decline#
ASML Holding's shares dropped by 3.3% on Thursday following an announcement from Taiwan Semiconductor Manufacturing Co. (TSMC) regarding a delay in the deployment of ASML's advanced lithography machines. These machines are crucial for producing smaller and more efficient chips.
TSMC's Decision on High-NA EUV Machines#
TSMC, ASML's largest customer, revealed that it has no plans to adopt ASML's latest high numerical aperture extreme ultraviolet lithography machines, commonly referred to as high-NA EUV, for chip production until at least 2029. Each of these advanced machines costs over €350 million (approximately $410 million), making them a significant investment for any company.
TSMC's Deputy Co-Chief Operating Officer, Kevin Zhang, emphasized that the company will continue using existing EUV technology, labeling the high-NA EUV machines as "very, very expensive." This announcement coincides with TSMC's plans to begin production of its leading-edge A13 chip in 2029.
Implications for ASML#
This delay could create challenges for ASML, which had anticipated that high-NA EUV machines would enter high-volume production by 2027 and 2028. The company is aiming for revenue of up to €60 billion by 2030, with the adoption of this advanced technology being a key focus for investors.
Analysts from Bernstein noted that TSMC's decision should not come as a surprise, as the company had previously indicated it would not use high-NA EUV for its A14 node. They also mentioned that while the adoption of high-NA technology is seen as a significant milestone, a slower rollout might not negatively impact ASML and could even be viewed positively.