Chip equipment maker ASML is pushing to raise prices on its EUV systems and plans a 10% increase on DUV equipment, but major customer TSMC is resisting the move.
ASML, the Dutch semiconductor equipment manufacturer, has initiated price discussions with Taiwan Semiconductor Manufacturing Company regarding its extreme ultraviolet (EUV) lithography systems, while planning a 10% price increase for its deep ultraviolet (DUV) systems, according to sources cited by The Information.
TSMC, the world's largest contract chipmaker and a key ASML customer, is opposing the proposed price increases. The resistance signals potential friction in a critical supplier-customer relationship that underpins global chip production.
EUV and DUV lithography systems are essential tools in advanced semiconductor manufacturing. EUV systems enable the production of the most cutting-edge chips, while DUV systems remain vital for older but still widely-used process nodes. Both technologies command premium prices, with EUV systems costing over $100 million per unit.
The timing of ASML's pricing initiative reflects broader industry dynamics. Semiconductor demand has fluctuated following pandemic-era supply chain disruptions and subsequent inventory corrections. Meanwhile, geopolitical pressures—particularly U.S. restrictions on chip equipment sales to China—have reshaped market conditions and buyer leverage.
For ASML, price increases could boost margins amid ongoing investment in next-generation technology. The company faces pressure to fund research into High-NA EUV systems, which promise even greater precision for future chip production.
For TSMC, equipment costs represent a significant operational expense. A 10% DUV price increase alone could impact its capital expenditure planning and, by extension, its competitive positioning and profitability.
TSMC's resistance suggests it may seek alternative suppliers, negotiate lower pricing, or delay equipment purchases. However, ASML's dominant market position—it controls roughly 80% of the EUV lithography market—limits TSMC's alternatives for cutting-edge systems.
The outcome of these negotiations could influence chip production costs across the industry and potentially affect semiconductor prices and availability.
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