ASML Holding N.V. shares gained 2.3% in Amsterdam late Friday after the company reported first-quarter net sales of €8.8 billion and raised its 2026 revenue forecast to between €36 billion and €40 billion. The Dutch chip-equipment giant also posted net income of €2.8 billion for the quarter. However, the market's focus quickly shifted to a cautious signal from its largest customer, Taiwan Semiconductor Manufacturing Co. (TSMC), which said it will not rush to adopt ASML's next-generation High-NA EUV lithography machines, each priced at over €350 million (approximately $410 million).
TSMC's Cautious Approach
TSMC, widely recognized as ASML's top client, unveiled its A13 and N2U technologies but indicated it plans to continue leveraging existing EUV tools rather than immediately transitioning to the more expensive High-NA systems. Kevin Zhang, a TSMC executive, noted that the company's strength lies in "leveraging existing EUV technology" through its research and development efforts. This decision introduces a layer of uncertainty for ASML, as the High-NA machines are critical for enabling finer chip details needed for advanced AI processors.
AI Demand vs. Machine Orders
While tech giants like Microsoft, Google, Amazon, and Meta continue to ramp up spending on AI infrastructure, ASML faces the challenge of converting that demand into shipments of its most advanced gear. The company aims to deliver at least 60 standard EUV machines in 2026 and 80 in 2027, while investing about $2.2 billion in capacity expansion this year. CEO Christophe Fouquet highlighted "very strong" order intake, noting that "demand for chips is outpacing supply." However, he also warned investors that missing delivery deadlines could push clients toward rivals or alternative technologies, stating that ASML would avoid becoming a bottleneck "by all possible means."
Analyst Perspectives
Analysts offered mixed views on TSMC's stance. Francois-Xavier Bouvignies at UBS told MarketWatch that TSMC's comments might reflect timing rather than a fundamental shift in direction. Citigroup analysts pointed out that Intel and Samsung remain relatively upbeat on High-NA adoption. Bernstein weighed in, noting the delay "probably shouldn't be a surprise" and suggesting that slower High-NA uptake could be "neutral, or even positive" for ASML if it boosts demand for existing EUV tools and related upgrades.
Risks and Uncertainties
ASML's business faces several headwinds. CFO Roger Dassen said it is still too soon to gauge the impact of U.S. export restrictions targeting China, which is projected to account for 20% of 2026 sales. Additionally, the company plans to stop disclosing quarterly order figures, a move that reduces transparency for investors. Shareholders must now piece together signals from ASML's guidance, customer budgets, and chipmaker commentary.
Shareholder Returns
On the positive side, ASML's shareholders have approved a final dividend of €2.70 per share, bringing the total 2025 dividend to €7.50. The board also has authorization to buy back up to 10% of issued shares through October 2027.
Market Context
European semiconductor and electrical-equipment stocks held their ground this week, with shares of ASM International, ASML, and BE Semiconductor moving higher as investors continued to seek exposure to AI and data-center demand. The key question for ASML remains whether it can ship enough standard EUV machines now and convince buyers to eventually adopt High-NA systems, especially with TSMC holding back and China curbs adding uncertainty.
