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TSMC says ASML\u2019s lithography machines are too expensive.<\/p>\n
TSMC will not be opting for ASML\u2019s expensive new lithography machines in a cost saving move.TSMC also launched its own A13 and N2U technologies, which will be used in chipmaking.\u00a0TSMC\u2019s new chip technology to act as a competition to ASML\u2019s existing tech.<\/p>\n
ASML stock dropped 1% on Wednesday after TSMC showcased their\u00a0newest generation of chip manufacturing \u200ctechnology and planned to hold off on deploying or purchasing ASML\u2019s new lithography machines used for chip production through 2029.<\/p>\n
Taiwan Semiconductor Manufacturing Company (TSMC), which is the world\u2019s largest chipmaker and the supplier to Nvidia (NVDA), Apple (AAPL) and Google (GOOGL), launched two chipmaking technologies geared towards AI development named A13 and N2U\u00a0earlier in the day.<\/p>\n
The A13 will go into production in \u200b2029 and the N2U, which is a more affordable option, will be used to make chips for phones and laptops. TSMC is ASML\u2019s largest customer, according to Bloomberg\u2019s supply chain data.<\/p>\n
TSMC\u2019s Deputy Co-Chief Operating Officer, Kevin Zhang, told Bloomberg on Wednesday that the company has no plans to purchase a newer generation of\u00a0 ASML\u2019s high numerical aperture extreme ultraviolet lithography machines or simply “high NA” EUV machines owing to their extremely high cost. One of these ASML machines costs upwards of $400 million.<\/p>\n
The move comes at a time when chipmakers are pivoting toward simplified process flows and advanced packaging rather than relying solely on expensive hardware.\u00a0<\/p>\n
What Is ASML\u2019s New EUV Machine?<\/p>\n
The double-decker-bus-sized machine is designed to produce the next generation of AI-powered chips as ASML looks to capitalize on the surging demand for semiconductors. Intel (INTC) is the first to deploy it for high-volume manufacturing.\u00a0<\/p>\n
The global semiconductor market is projected to rise 22% to $772 billion this year and more than 25% to $975 billion next year, according to the World Semiconductor Trade Statistics organization.\u00a0<\/p>\n
What Are\u00a0 Analysts Saying?<\/p>\n
43 out of 44 analysts rate\u00a0ASML stock \u2018buy\u2019 or higher, with one \u2018sell\u2019 recommendation.\u00a0<\/p>\n
RBC Capital analyst Srini Pajjuri raised the firm’s price target on ASML to $1,700 from $1,625 and keeps an \u2018Outperform\u2019 rating on the shares, and Wells Fargo raised the firm’s price target to $1,750 from $1,650 and maintained an \u2018Overweight\u2019 rating on the shares last week.<\/p>\n
The Retail Take<\/p>\n
One user on Stocktwits expressed confidence in the stock by saying there is a \u201clack of panic\u201d.\u00a0<\/p>\n
https:\/\/stocktwits.com\/Milli13\/message\/651058814<\/p>\n
Another user highlighted TSMC will have to buy the machine eventually from ASML.<\/p>\n
https:\/\/stocktwits.com\/Milli13\/message\/651058814<\/p>\n
The stock has gained 35% year-to-date.\u00a0<\/p>\n
For updates and corrections, email newsroom[at]stocktwits[dot]com<\/p>\n