ASML Holdings (ASML) faced a notable decline in its stock price, dropping over 1% on Wednesday, following comments from Taiwan Semiconductor Manufacturing Company (TSMC) regarding its plans for ASML’s advanced chip-making equipment. TSMC’s co-COO, Kevin Zhang, indicated that the company does not intend to deploy ASML’s high-numerical-aperture extreme ultraviolet (NA-EUV) lithography machines until at least 2029, as it remains satisfied with its existing low-NA EUV technology.
This development is significant for ASML and the broader semiconductor sector, as TSMC is a major customer and a key player in the industry. The high costs associated with NA-EUV machines, estimated at over $410 million each, underscore the financial implications of delayed adoption. Despite an initial drop of 5.5% in ASML’s stock, the subsequent recovery suggests that investors view this setback as manageable rather than detrimental.
The key takeaway for market professionals is that while TSMC’s hesitance impacts ASML in the short term, the long-term demand for advanced chip-making technology remains strong, particularly as AI hardware development continues to drive innovation in the sector.
Source: fool.com