TSMC Likely To Receive ASML Chipmaking Machine This Year, Stocks Jump

American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Company (TSM) and shares of ASML Holding (ASML) jumped during intraday trading Wednesday after analysts reported that the Dutch firm is optimistic that TSMC will receive its advanced chipmaking machine this year.

ASML’s lithography technology is used to mass-produce semiconductor chips. The EXE:5000 system uses High NA EUV tech to print features on silicon wafers, allowing chipmakers to “chipmakers can reduce process complexity in high-volume manufacturing.”

“The technology will enable multiple future chip architectures, starting at the 2 nm Logic node and followed by Memory nodes at a similar transistor density,” ASML said.

ASML CFO ‘Sounded Optimistic’ TSMC Talks ‘Are Nearing Conclusion’

ASML chief financial officer (CFO) Roger Dassen “sounded optimistic that commercial discussions with TSMC are nearing conclusion,” Jefferies analysts said in a note following a call with company executives.

Jefferies reported that “TSMC is an active participant” at the High NA EUV lithography lab in the Netherlands where customers can access a prototype of the machine while waiting for their own systems.

Jefferies analysts explained that TSMC “ordered its first high-NA system, the EXE:5000, in 2018, and will be receiving this test system later this year,” adding they “expect TSMC to use high-NA at the A14 node ramping in 2028.”

ASML shipped the first High NA EUV lithography system to Intel (INTC) in December 2023. According to Bloomberg, the advanced machines cost 350 million euros ($380 million) each and “weigh as much as two Airbus A320s.”

ASML Expecting 2025 Revenue at High End of Guidance

According to Jefferies, ASML indicated that 2025 revenue is anticipated to be in the upper half of the guidance and that demand is expected to remain strong into 2026, “especially helped by government-funded fabs.”

ASML could benefit from the Biden administration’s CHIPS and Science Act, which has already been used to grant billions of dollars to Intel, Samsung, TSMC, and others in the semiconductor manufacturing industry.

Jefferies analysts, which gave ASML stock a “buy” rating, said they “see a reasonable possibility of ASML’s agreement with TSMC being signed within coming weeks and for initial 2nm orders to be placed in Q2.”

Once received, the ASML machine could help TSMC scale its logic chip production in a cost-efficient manner.

As of 1:21 p.m. ET Wednesday, ASML shares were up 8.9% to $1,034.96, while TSMC gained 6.4% to $162.26. ASML and TSMC are up about 36% and 55% year-to-date, respectively.