ASML plans to raise prices for chipmaking equipment, according to The Information, but the move has run into resistance from its largest customer, Taiwan Semiconductor Manufacturing Co. (TSMC). The report says booming demand for AI chips has tightened supply for advanced manufacturing tools, and ASML is not alone. Tokyo Electron (TEL) and other equipment makers are also preparing longer-term price increases.
TSMC is scheduled to hold its investor call in the afternoon of July 16. Investors are expected to focus on how the company intends to manage rising equipment costs while keeping its profit commitments intact.
Equipment makers signal broader price increases
In the current semiconductor equipment market, price increases are becoming more common. Tokyo Electron, one of Japan’s largest chip equipment makers, said in meetings with media and sell-side analysts that it plans to raise equipment prices by as much as 50% over the long term.
The report links that stance to much longer lead times across the semiconductor equipment industry and capacity constraints on the supply side. Under those conditions, higher prices from toolmakers are becoming easier to justify. ASML has also pointed to improving pricing in its earnings call commentary and expects equipment prices to continue moving higher.
TSMC faces questions on margins and capex
Against that backdrop, the report says TSMC has started pushing back. The company has long emphasized margin protection, especially its commitment to maintain gross margin above 53%. If it were to accept higher equipment prices across the board, heavier depreciation costs could weigh further on profitability.
In April, TSMC Senior Vice President of Global Business and Deputy Co-Chief Operating Officer Zhang Xiaoqiang said the company would continue upgrading existing EUV lithography systems and delay deployment of ASML’s latest High-NA EUV equipment in mass chip production until 2029.
That makes the July 16 investor call a key event for the market. Investors will be watching for any mention of TSMC’s resistance to ASML’s pricing plans, as well as any update on future capital spending.
ASML lifts sales outlook again as Intel adopts High-NA tools
Even with pricing friction involving a major customer, strong market demand has led ASML to raise its annual sales forecast for the second time this year. The company now expects full-year net sales of 43 billion euros to 45 billion euros.
ASML also confirmed that Intel has become the first company to use High-NA EUV lithography tools in chip production. Each system is priced at more than 350 million euros, or about $410 million.
That development contrasts with TSMC’s earlier view that the equipment was too expensive and suitable only for research use. In the report, Intel’s progress is presented as tangible support for the commercial viability of the new tools.