In a move that could send ripples through the semiconductor industry, ASML is contemplating price adjustments for its Low-NA EUV lithography tools. This potential shift has already sparked discussions with its largest client, TSMC according to reports. The Dutch toolmaker’s decision comes amidst a surge in demand for advanced chipmaking equipment, driven by the artificial intelligence boom.
The semiconductor industry’s reliance on ASML’s cutting-edge extreme ultraviolet (EUV) lithography machines has never been greater. These machines are essential for manufacturing advanced semiconductors, and ASML’s customers, including Intel CorpSamsung Electronics Co and SK Hynix Inc are experiencing booming results. However, ASML’s chief financial officer, Roger Dassen has indicated that price changes are not imminent due to long order lead times.
ASML’s Value-Based Pricing Strategy
ASML has long adhered to a value-based pricing model, gradually increasing quotes based on output, patterning costs, power consumption, and other benefits. This approach has led to significant price increases over time. For instance, early Twinscan NXE Low-NA EUV systems cost roughly €100 million–€120 million, while more advanced systems are priced starting at €170 million. These prices are still well below the rumored quotes for High-NA EXE scanners, which exceed €350 million.
The productivity of Low-NA EUV tools has seen substantial improvements, rising from 160–170 wafers per hour (WPH) to 220 WPH/260 WPH with NXE:3800E/NXE:3800F systems. Future NXE:4200G/NXE:4200H systems are expected to exceed 300 WPH and improve overlay to ≤0.8nm–≤0.7nm. These advancements provide a strong rationale for potential price improvements, according to Dassen.
The Impact on TSMC and the Semiconductor Industry
TSMC, ASML’s largest client, has expressed concerns about the potential price hikes. The foundry’s leading-edge roadmap through 2030 relies heavily on extending Low-NA EUV with better masks, computational lithography, and multipatterning. TSMC’s strategy has been to avoid High-NA EUV until at least its 10A-class (1 nm-class) technology. If ASML proceeds with price increases, it could affect TSMC’s plans for the next several years.
TSMC already operates the world’s largest Low-NA EUV fleet and needs many more scanners for its fabs in Taiwan, the U.S, and Japan. Even modest price increases beyond TSMC’s projections could add billions to capital spending, reduce the economic advantage of postponing High-NA, and ultimately raise manufacturing costs. Accepting higher prices now could establish the baseline for dozens or hundreds of future systems, allowing ASML to capture a larger share of the economic value created by increasingly productive lithography equipment.
Future Implications and Market Dynamics
ASML’s potential price adjustments are not expected to take effect immediately due to long order lead times. Orders in ASML’s backlog already carry a sales value, subject to inflation adjustments. Prices for much of the and early output may already be contractually determined. Higher pricing could therefore primarily apply to shipments and beyond, or for new orders that somehow get squeezed in in.
The NXE:4200G, due in, should naturally lift average selling prices anyway as it gets major performance improvements. This development, coupled with the potential price hikes, could reshape the market dynamics of the semiconductor industry. ASML’s decision will likely have far-reaching implications for chipmakers and the broader tech ecosystem.
