ASML's EUV Machines Are Becoming More Valuable Due to Rising Demand
ASML (NASDAQ: ASML) remains the sole producer of extreme ultraviolet (EUV) lithography systems, essential for manufacturing advanced semiconductor chips. Major chipmakers like TSMC, Samsung, and Intel rely on these machines, making ASML a critical player in the global semiconductor supply chain. The company's low-NA EUV systems currently cost around $200 million each, while its newer high-NA models exceed $400 million due to their advanced capabilities. ASML is leveraging its dominant market position and technological edge by increasing prices for both older and newer machines. This pricing power stems from the company's monopoly in EUV lithography and rising demand driven by artificial intelligence (AI) development, which enhances chip productivity and profitability at foundries like TSMC. The global EUV market is projected to grow significantly over the next several years. TSMC plans to use low-NA systems until 2029 before transitioning to high-NA models, while Intel has already begun using them for its latest chips. Samsung aims to adopt high-NA technology in 2027. ASML's ability to raise prices is supported by the increasing complexity and cost of maintaining EUV machines as well as supply chain constraints.
Topics: ASML EUV lithography Intel Samsung TSMC