TSMC (2330.TW) and semiconductor equipment leader ASML announced a joint initiative to upgrade extreme ultraviolet (EUV) photomasks from the current 6-inch standard to 12-inch. The major collaboration continued to drive momentum on September 9, with TSMC shares rising as much as NT$15 intraday to touch NT$2,485, marking a new swing high. Photomask carrier supplier Gudeng Precision Industrial (3680.TW) briefly surged to its daily limit of NT$573, making the related supply chain a focal point in the session.

The two companies unveiled the collaboration ahead of the BACUS International Society for Optics and Photonics (SPIE) Advanced Lithography conference in Monterey, California, targeting the establishment of a 12-inch photomask pilot production line by 2031 and full lithography system readiness by 2033 to support advanced process volume production. TSMC Chairman C.C. Wei stated that TSMC firmly believes only through industry collaboration can complex problems be solved, unlocking possibilities that no single company could achieve alone, and expressed hope that continued innovation will lower barriers and enable advanced solutions to scale broadly.

12-Inch Photomask Upgrade Reshapes Supply Chain Specifications

Industry analysis indicates that High NA EUV systems carry a total unit price of approximately $380 million to $410 million (approximately NT$12 billion to NT$13 billion), roughly double the price of first-generation EUV systems, making them the most expensive semiconductor equipment in history. Operating costs are far higher than existing EUV systems, with volume production expected to begin as early as 2030, supporting the advancement of angstrom-level processes such as A10.

TSMC noted that High NA EUV lithography will be integrated into advanced process volume production starting in 2030. As process technology continues to advance—particularly with AI applications driving increasingly complex transistor architectures—the number of photomask layers requiring High NA EUV exposure will increase accordingly. The transition of photomasks from 6-inch to 12-inch will change specifications for critical semiconductor manufacturing components, improving production efficiency, reducing costs, and keeping pace with the growth rate of AI demand.

As photomask dimensions scale up, future transport, protection, and carrier specifications will also be adjusted. Gudeng, the leader in wafer and photomask carriers, has long positioned itself in EUV photomask carriers, and its High-NA EUV POD has passed ASML certification, making it a key market focus.

Gudeng opened at its daily limit of NT$573 on September 9 before the limit was lifted. As of 1:08 p.m., the stock traded at NT$567, up NT$46 or 8.83%, with volume of 7,240 lots, significantly higher than the previous session’s 2,101 lots, and turnover of approximately NT$4.139 billion (approximately $131.5 million).

Gudeng’s latest July consolidated revenue came in at NT$871 million (approximately $27.7 million), up 15.81% month-over-month and 71.69% year-over-year, approaching the record high of NT$886 million (approximately $28.2 million) set in April. Cumulative revenue for the first seven months reached NT$5.051 billion (approximately $160.5 million), up 28.67% year-over-year. The company attributed July’s revenue growth primarily to increased photomask carrier product sales, with advanced process-related demand continuing to support operations.

Looking further at Gudeng’s product mix, photomask carriers accounted for 58% of revenue in the first seven months and wafer carriers 31%. Overseas EUV POD growth of 150% far outpaced the 68% growth in Taiwan, indicating that high-end photomask carriers and overseas customer expansion have become the primary growth drivers. Advanced packaging carriers also surged 244% in the first seven months. On the regional front, Gudeng’s new plant in Japan will serve as a key base for its “Taiwan Plus One” strategy, while its U.S. operations have already integrated basic processing equipment into existing leased space, with long-term opportunities highly anticipated.

TSMC Shares Strong; Analysts Caution Against Chasing Rallies

Amid escalating U.S.-Iran conflict in the Middle East, international oil prices surged toward the $100-per-barrel mark, lifting market risk-aversion sentiment and causing most U.S. stocks to close lower on September 8, with only the Philadelphia Semiconductor Index showing resilience. Buoyed by the Philadelphia Semiconductor Index, TSMC’s U.S.-listed ADR rose 2.35% to close at $439; the Taipei-listed shares also performed impressively intraday on September 9.

Chen Po-chou, president of CTBC Investments Advisory, noted that TSMC’s share price gains were driven not only by the Philadelphia Semiconductor Index but also by the ASML collaboration to advance EUV photomasks from 6-inch to 12-inch large format. He believes the TSMC-ASML partnership was already part of the existing technology development roadmap, representing a methodical accumulation of positive catalysts, and that TSMC’s mid-to-long-term operational outlook remains “cloudless.”

Looking ahead, Chen advised investors to maintain rationality in their trading strategies, avoid blindly chasing rallies, and adopt a “buy on pullbacks” approach.

Memory Chip Stocks Rally in Tandem

Taiwan’s stock market pulled back from highs on September 8, closing down 220 points at 47,106, a decline of 0.47%, with turnover of NT$876.662 billion (approximately $27.9 billion). In post-market turnover rankings, TSMC led with NT$63.958 billion (approximately $2.0 billion), followed by Winbond Electronics (2344.TW) at NT$41.082 billion (approximately $1.3 billion).

Winbond Electronics benefited from a South Korean brokerage report indicating that Samsung Electronics and SK Hynix memory inventories had fallen below 10 days of supply. August revenue came in at NT$27.308 billion (approximately $867.8 million), up 2% month-over-month and 289.4% year-over-year, marking a ninth consecutive month of record highs. Cumulative revenue for the first eight months reached NT$152.178 billion (approximately $4.8 billion), up 177.4% year-over-year, also a record for the same period. The stock surged more than half a daily limit on September 8, closing at NT$188, up 4.44%.

The memory chip sector extended its bullish momentum on September 9, with Micron up 2%, SanDisk up 2%, and SK Hynix ADR surging 5% in early U.S. trading on September 8. Broadcom and Intel gained more than 2% and 5%, respectively, with chip stocks broadly outperforming.

Global Expansion and Advanced Process Advancement

TSMC has gained 41.1% recently, significantly outperforming the foundry industry’s 17.9% gain and the S&P 500’s 12% advance. According to Counterpoint Research, pure-play foundry industry revenue grew 29% year-over-year in the second quarter of 2026, driven primarily by surging AI-related demand. TSMC has benefited from 2nm (N2) volume production, expanded 3nm (N3) capacity, and tight supply in mature nodes and advanced packaging, maintaining a 73% market share for two consecutive quarters, compared with approximately 4% for UMC and 3% for GlobalFoundries—a commanding lead.

TSMC continues to expand global capacity, including N3 deployments in Taiwan, Arizona, and Japan, with an additional $100 billion investment in the United States to build fabs supporting N2 and below, as well as advanced packaging facilities. The next-generation A14 technology is also progressing on schedule, with pre-production expected in 2027 and volume production in 2028, offering 10% to 15% performance improvement at the same power consumption and nearly 20% higher chip density compared with N2.

On valuation, TSMC trades at approximately 21.84 times forward 12-month earnings, below its historical median of 24.39 times. Institutional investors believe that with advanced processes, AI demand, and advanced packaging continuing to drive growth, TSMC’s fundamentals remain attractive.