ASML Plans Price Increases for Chipmaking Equipment, Despite TSMC Resistance
The Takeaway
- Chip toolmaker ASML plans price hikes, sparking resistance from TSMC.
- ASML plans capacity expansion amid surging AI chip demand.
- ASML lifted 2026 sales forecast to €43-45 billion due to strong demand.
Chip toolmaker ASML, which makes equipment that plays a central role in chip production around the world, plans to raise prices, according to four people with knowledge of the discussions. That’s likely to bring ASML into conflict with Taiwan Semiconductor Manufacturing Co., the world’s biggest chipmaker and ASML’s largest customer, which recently complained about ASML’s high prices.
TSMC has already begun to push back against ASML’s pricing plans, said two of the four people. That highlights the growing tensions in the chip world as manufacturers try to balance the need to increase capacity with keeping a rein on costs.
ASML is the primary supplier of highly specialized lithography equipment used in semiconductor manufacturing, supplying companies such as TSMC, Samsung, SK Hynix and Chinese chipmakers. Its equipment—enormously complex printerlike devices that project circuit patterns onto light-sensitive silicon wafers—plays a key role in the production of chips designed by Nvidia, Apple and many others. ASML rarely raises its prices, the four people said.
But soaring demand for AI and memory chips has prompted a wide range of chipmakers to expand their production lines, which is in turn driving demand for ASML’s equipment. The Dutch manufacturer reported on Wednesday 21% growth in revenue in the June quarter, and it lifted its 2026 sales forecast to between 43 billion euros ($49.2 billion) and 45 billion euros ($51.5 billion), representing growth of 35% compared to 2025. Last year ASML’s revenue rose 15.5%.
On a conference call with analysts Wednesday morning, ASML Chief Financial Officer Roger Dassen acknowledged the possibility of price increases, noting that the company has “a pretty strong runway for potential price improvements going forward” for its Low-NA machine, the older generation of its extreme ultraviolet lithography systems. He added that “long order lead times” mean “that doesn’t translate into pricing effects tomorrow.”
EUV systems print the smallest and most intricate features in cutting-edge processors and memory chips. ASML is the world’s only producer that makes EUV systems at scale.
The rising demand for its systems has prompted ASML to invest in expanded manufacturing capacity. CEO Christophe Fouquet said Wednesday that the company plans to increase annual capacity for two of its most important chipmaking machines by 30% this year. It is considering another 30% expansion for both product lines in 2028.
ASML has recently discussed raising prices for its EUV systems with TSMC, according to two other people with direct knowledge of those talks. Separately, it has told some customers in recent weeks, including chipmakers in China, that it intends to charge 10% more for its deep ultraviolet systems, according to four people with direct knowledge of the discussions.
DUV systems, which use a less advanced form of light and print many of the less intricate layers in advanced chips, are also widely used to make semiconductors found in cars and home appliances. AI servers also require large numbers of mature-node chips produced by DUV machines to regulate power and perform other supporting functions.
Some Chinese chipmakers have agreed to pay the higher prices for the DUV systems, two of the four people said. But TSMC is resisting ASML’s efforts to raise prices for either type of equipment.
ASML and TSMC declined to comment.
DUV equipment is important to TSMC’s expansion of advanced packaging, another bottleneck in the AI supply chain. Packaging connects processors with high-bandwidth memory so they can exchange data rapidly. TSMC uses its advanced packaging technology, Chip on Wafer on Substrate, to assemble AI accelerators designed by companies including Nvidia and Google. The heavy demand for CoWoS gives TSMC another reason to secure additional lithography capacity.
DUV is ASML’s largest product business by unit volume. The company generated about 12 billion euros ($13.8 billion) in net system sales for DUV and about 11.6 billion euros ($13.3 billion) for EUV in 2025.
A delay in obtaining lithography equipment can hold up the opening or expansion of an entire chip production line.
Potential demand for chipmaking equipment is continuing to grow. Elon Musk is planning a giant semiconductor complex, known as Terafab, to produce advanced chips for his AI, robotics and space businesses. ASML said last month that it expects to be among the equipment companies collaborating on the project.
The lithography machines carry some of the highest price tags in a foundry. ASML sells its most advanced DUV systems for about $90 million apiece, while its last-generation EUV machines cost about $220 million and the newest EUV models can approach $400 million.
China is particularly exposed to any DUV price increase. DUV systems are among the most capable lithography machines that Chinese manufacturers can still legally purchase from ASML under U.S. export restrictions, and there are limited local alternatives for lithography. (ASML is affected by U.S. export rules because the Dutch government has agreed in the past to collaborate with the U.S. on blocking the sale of EUV equipment to China).
China represented 33% of ASML’s net system sales by customer location in 2025, the largest share of any country or region. ASML has said it expects China to account for about 20% of total net sales in 2026 partly as a result of demand cooling following heavier lithography purchases by Chinese chip makers.
Those restrictions are part of Washington’s effort to slow China’s progress in advanced semiconductors. ASML has never sold EUV equipment to China, and Dutch licensing rules already prevent it from shipping some advanced DUV models to the country. U.S. lawmakers have proposed expanding the scope of DUV models affected by the export restrictions.