ASML’s €12 Billion Buyback and TSMC’s High-NA EUV Pause: A Tale of Two Signals

ASML announces €12B buyback through 2028, but TSMC's delay on High-NA EUV systems until 2029 creates strategic tension. Analysts see net positive, as Intel charges ahead.

ASML sent a thunderous message of confidence at its annual general meeting on April 22, unveiling a €12 billion share buyback program running through 2028 — one of the largest capital returns in the Dutch lithography giant’s history. Yet beneath the headline-grabbing payout, a strategic tension is emerging: the company’s most important customer, Taiwan Semiconductor Manufacturing Co., is hitting the brakes on the next-generation chipmaking technology.

TSMC has decided to delay its purchase of ASML’s cutting-edge High-NA EUV lithography systems until 2029, a move driven by cost discipline. Each of those machines carries a price tag north of €350 million, and TSMC plans to rely on existing technology for its upcoming A13 chip generation, using only a handful of High-NA units for research purposes for now. The decision forces ASML to recalibrate its near-term expectations for the technology’s adoption curve.

Paradoxically, analysts view TSMC’s caution as a net positive. By pushing the upgrade cycle further out, customers preserve their balance sheets, which could ultimately support stronger margins across the supply chain. ASML’s quasi-monopoly in EUV lithography remains intact, and a sustained demand collapse is considered unlikely. While TSMC hesitates, Intel is charging ahead, positioning itself as an early adopter of High-NA for its next chip generation.

The market has largely shrugged off the TSMC news. ASML shares closed at €1,240.80 on Friday and have rallied roughly 25 percent since the start of the year, recovering more than 100 percent from the 52-week low hit in late April 2025. On Monday, the stock traded ex-dividend, with the annual general meeting having approved a total dividend of €7.50 per share for fiscal 2025 — a 17 percent increase from the prior year.

Operationally, ASML is firing on all cylinders. First-quarter revenue came in at €8.8 billion, with net profit reaching a hefty €1 billion-plus. The gross margin landed at 53 percent, at the top end of the company’s target range, though management expects it to dip to between 51 and 52 percent in the second quarter as the product mix normalizes. For the second quarter, ASML is guiding for net sales between €8.4 billion and €9.0 billion.

The revenue outlook for 2026 has been nudged higher, now pegged at €36 billion to €40 billion, compared with the previous range of €35 billion to €40 billion. CEO Christophe Fouquet attributed the upgrade to accelerated investment plans from customers in both logic and memory chip segments. ASML expects to ship at least 60 EUV systems in 2026, with Samsung and SK Hynix among the key buyers as they ramp up production of AI-optimized memory chips.

Geographically, the sales mix is shifting. China’s share of ASML’s revenue dropped to 19 percent in the first quarter, while South Korea surged to 45 percent, reclaiming the top spot. Geopolitical risks around export controls remain a persistent overhang, but institutional investors are showing conviction. WT Asset Management added roughly 69,500 ASML shares in the fourth quarter of 2025 for about $74 million, making the stock the 12th-largest position in its portfolio.

Wall Street remains broadly bullish. Deutsche Bank and Goldman Sachs have reiterated buy ratings, while RBC Capital lifted its price target to €1,700, citing sustained demand momentum. ASML’s order backlog stands at nearly €40 billion, providing long-term visibility. The broad commercial breakthrough for High-NA EUV is still expected from 2027 onward, even as TSMC’s timeline slips — a reminder that in the world of advanced chipmaking, the biggest players often move at their own pace.