The price is too expensive, I can't afford it! The largest customer Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has given up on the latest lithography equipment from ASML Holding NV ADR (ASML.US) until 2029.

Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) stated that in order to save costs, it will delay the mass production usage of the most advanced chip lithography equipment from Dutch company ASML Holding NV ADR (ASML.US) until after 2029, which may pose a blow to the manufacturer of this expensive equipment. Chief Operating Officer and Senior Vice President Kevin Zhang said that the company currently has no plans to adopt ASML Holding NV ADR's latest high-NA Extreme Ultraviolet lithography (EUV) machines, which have a unit price of up to 350 million euros (about 4.1 billion US dollars). Kevin Zhang also announced that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's most advanced A13 chip will enter production in 2029. According to Bloomberg supply chain data, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is the largest customer of ASML Holding NV ADR. "We can still benefit from the existing EUV equipment," Kevin Zhang said, adding that the next generation of high-NA EUV equipment is "very, very expensive." This decision by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR may not be a good sign for ASML Holding NV ADR. Investors are closely watching the adoption of high-NA EUV equipment, and ASML Holding NV ADR expects this equipment to enter mass production stage between 2027 and 2028, with a revenue target of 60 billion euros by 2030. ASML Holding NV ADR's stock fell 5.5% at one point during US trading hours. As of this Tuesday, the stock has already risen by 36% in the New York market this year. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's technical choices have far-reaching impacts on the entire semiconductor industry. The company is the largest buyer of equipment, with the largest budget for building new factories and purchasing equipment, and is also a leader in manufacturing processes, often imitated by competitors. ASML Holding NV ADR's high-NA EUV equipment is an upgrade to optical systems aimed at helping chip manufacturers further shrink transistor sizes, produce more advanced semiconductors for AI applications. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has purchased a small amount of this equipment, but only for research purposes rather than mass production. Kevin Zhang said the company is exploring ways to improve chip performance without relying on high-NA EUV equipment. The cost of modern chip manufacturing is becoming increasingly expensive, and this top global semiconductor manufacturer must be cautious in its expenditures to maintain profitability. Currently, the construction cost of an advanced chip factory is around 20 to 30 billion US dollars, and the price of an entry-level ASML Holding NV ADR EUV lithography machine needed for manufacturing the most advanced AI chips has already exceeded 200 million US dollars. Facing high expenses and continued overseas expansion, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR plans to achieve a record capital expenditure in 2026, possibly close to 56 billion US dollars. At the same time, the company has raised its long-term gross profit margin target to 56% and above earlier this year, betting that its huge investment will eventually bring satisfactory returns to investors. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is a major AI chip manufacturer for companies like NVIDIA Corporation, AMD, and Broadcom Inc. Kevin Zhang also mentioned that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's first advanced chip manufacturing base in the United States is progressing well, and the chip yield of the first fab in Arizona has caught up with the factories in Taiwan. He revealed that the second factory in the state will start production next year.