ASML’s High-NA EUV Ambitions Meet a TSMC Reality Check

TSMC postpones deployment of ASML's €350M High-NA EUV chipmaking tools until at least 2029, opting for cost-effective existing tech, while Intel and Samsung race ahead.

The world’s most advanced chipmaking tools are getting a cooler reception than expected from the industry’s biggest player. Taiwan Semiconductor Manufacturing Co. has signaled it will hold off on deploying ASML’s next-generation High-NA EUV lithography systems for mass production until at least 2029, sending the Dutch equipment maker’s shares sliding.

Kevin Zhang, TSMC’s deputy co-chief operating officer, was blunt about the rationale: the machines are “very, very expensive,” with each unit carrying a price tag north of €350 million. Instead of rushing into the new technology, TSMC plans to squeeze more performance out of its existing Low-NA EUV fleet through advanced multi-patterning techniques. The company’s A13 chip, slated for production in 2029, could mark the first tentative step toward High-NA adoption.

The market reacted swiftly. ASML stock dropped 3.31% on Thursday to €1,209.80, though the shares remain up roughly 25% year-to-date. The selloff reflects investor concern that the world’s largest contract chipmaker is tempering its appetite for the most expensive gear in ASML’s arsenal.

Analysts See Little Cause for Alarm

Wall Street largely shrugged off the news, arguing the delay was already baked into expectations. Bernstein analysts noted that TSMC had indicated a year ago it would not use High-NA EUV for its A14 node. The baseline assumption, they said, had always been that the technology would debut no earlier than the A10 node in 2030. Speculation about a partial rollout for select layers in 2029, they added, never rested on solid ground.

In a counterintuitive twist, Bernstein suggested the slower adoption could prove neutral or even mildly positive for ASML. A more gradual High-NA ramp allows the company to lean longer on its established EUV portfolio, service revenue, and robust demand from memory chip makers — all while the next-generation technology matures at a measured pace.

A Tale of Two Chip Giants

The divergence between TSMC and its archrival Intel is becoming increasingly stark. Intel has positioned itself as the “first mover” on High-NA EUV, deploying the systems for its upcoming 14A foundry node. Samsung has also jumped in, securing a second High-NA scanner in early 2026 to fuel competition in both memory and logic segments.

This strategic split among ASML’s top customers will shape the company’s order book for years. While Intel and Samsung race ahead, TSMC’s caution underscores a fundamental tension: the technology may be cutting-edge, but the economics of wafer production still favor proven, cost-effective solutions.

Core Business Holds Steady

Away from the High-NA drama, ASML’s underlying performance remains solid. First-quarter revenue hit €8.8 billion with a gross margin of 53%. The company raised its 2026 revenue forecast to between €36 billion and €40 billion, up from a prior range of €34 billion to €39 billion. Memory chip customers are reporting fully booked capacity, and demand for 2-nanometer designs tied to AI applications is accelerating.

For the current year, ASML expects to ship five to ten High-NA systems, while deliveries of standard EUV machines should exceed 60 units. The strong pull from AI hardware, which does not yet require the extreme precision of High-NA optics, continues to underpin the core business.

Geopolitical Clouds and Capital Returns

A separate risk looms on the horizon. The U.S. MATCH Act, which would restrict DUV exports to China, is currently under debate. JPMorgan estimates that a full DUV export ban could shave up to 10% off ASML’s earnings per share, given that China is expected to account for roughly 20% of revenue in 2026.

On the shareholder front, ASML’s annual general meeting on Wednesday authorized a substantial capital return program. The board received the green light to buy back up to 10% of outstanding shares through October 2027. The company also reshuffled its leadership, appointing Marco Pieters to the executive board.

Despite the recent pullback, ASML stock has more than doubled over the past twelve months. The question now is whether the booming DUV business can fully compensate for the delayed High-NA orders from its most important customer — and whether other major foundries and memory makers will follow TSMC’s cautious lead.