ASML makes the machines that build the world's most advanced computer chips. One of its top-of-the-line EUV lithography machines already costs upwards of €350 million, or roughly $410 million apiece, according to TSMC. Now the company wants to charge even more.
During Wednesday's earnings call, CFO Roger Dassen hinted at the possibility of price adjustments for the less advanced EUV tool, the low‑NA model. "We keep on increasing the productivity of the low NA tools so, of course, that gives us a pretty strong runway for potential price improvements going forward," Dassen said.
For the second time this year, ASML raised its full‑year sales outlook. The Dutch firm now projects net sales in the range of €43 billion (about $49.2 billion) to €45 billion for the year, well above analysts' expectations.
Artificial intelligence is fueling a surge in the chip industry. Record profits at major ASML customers like TSMC, Samsung, and SK Hynix have set the stage for possible price hikes, according to a Monday note from RBC Capital Markets analyst Srini Pajjuri.
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Additionally, ASML noted that Intel Corp., one of its clients, has begun utilizing the company's most cutting‑edge machine for manufacturing chips - a step that CEO Christophe Fouquet called a positive signal for the technology's commercial readiness. This follows TSMC's earlier statement that the equipment is prohibitively costly for production purposes, although the Taiwanese chipmaker does employ them for research.
Here is where things get interesting. Neither ASML nor TSMC responded to inquiries for comment.
ASML's CFO acknowledged that any price changes would take time to show up in revenue anyway. Long order lead times mean a price increase would not "translate into pricing effects tomorrow," as Dassen put it. So even if ASML raises prices now, the financial impact could be months or even years down the road.
The real question is whether TSMC will ultimately accept higher prices or force ASML to back down. TSMC needs those machines to keep building the chips that power AI, but it also has the size and clout to push back hard.
For investors, watch how this plays out. If TSMC accepts higher prices, ASML's already impressive revenue growth could accelerate further. That is good news for anyone holding ASML stock or a broader tech fund that includes the company.
If TSMC holds its ground and forces a compromise, ASML's pricing power may have a ceiling. That would not be a disaster - the company still has a near‑monopoly on the most advanced chipmaking tools - but it would mean slower profit growth than bulls expect.
The bottom line: AI is driving demand for chips at a pace that makes machine makers like ASML essential partners. Their customers are making record money, which gives suppliers room to raise prices. But the biggest customer has the most to lose - and the most power to say no. Keep an eye on TSMC's next earnings call. That is where this story will take its next turn.
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