TSMC announced that it will delay the deployment of ASML’s next‑generation High‑NA EUV lithography systems until at least 2029, a decision driven by the machines’ high cost of roughly $350 million to $400 million each. The delay allows TSMC to extend the life of its current EUV technology and focus on advancing existing nodes such as the upcoming A13 and A12, which will be produced with the current EUV line.
ASML’s Q1 2026 earnings reflected a strong performance, with revenue of €8.8 billion—up 13.2 % year‑over‑year—and net income of €2.8 billion. Gross margin reached 53 %, the high end of guidance, driven by robust demand for EUV systems and a healthy mix of installed‑base services. Management raised its full‑year 2026 revenue outlook to €36 billion–€40 billion, underscoring confidence in continued AI‑driven demand for advanced lithography.
TSMC’s Q1 2026 results were equally impressive, reporting revenue of NT$1,134.10 billion (≈$35.9 billion) and net income of NT$572.48 billion (≈$20.5 billion). Revenue grew 35.1 % year‑over‑year, with high‑performance computing (HPC) accounting for 61 % of sales. Gross margin expanded to 66.2 %, reflecting cost efficiencies and scale. The company lifted its 2026 revenue‑growth forecast to over 30 % and confirmed a capital‑expenditure budget of $52 billion–$56 billion to support AI, 5G, and HPC demand.
The postponement of High‑NA EUV adoption has immediate implications for ASML. The company’s most advanced tools are expected to contribute significantly to its revenue mix, and a delay from its largest customer raises concerns about the pace of future sales. Investors reacted negatively, citing worries that the slowdown could affect ASML’s long‑term growth trajectory.
Management commentary highlights the strategic context. ASML CEO Christophe Fouquet noted that “demand will continue to outpace supply … driving our customers to aggressively add capacity.” TSMC CFO Wendell Huang emphasized that “a higher level of capital expenditures is always correlated to the high growth opportunities in the following years,” while Chairman C.C. Wei stressed the growing AI model adoption across all segments. TSMC’s deputy COO Kevin Zhang remarked that “the next‑generation High‑NA EUV equipment is ‘extremely expensive’,” underscoring the cost barrier that prompted the delay.
The decision also positions TSMC differently from competitors. Intel is already adopting High‑NA EUV for its 14A node, and Samsung is also acquiring the technology, creating a divergence in strategy that could influence future market dynamics.
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