ASML’s Record Revenue Guidance and Pricing Offensive Face a Reality Check From TSMC
Published on 07/17/2026 at 02:52 | Redaktion boerse-global.de
The Dutch lithography giant ASML is juggling two powerful forces that are pulling its stock in opposite directions. On one side, the company has raised its 2026 revenue forecast for the second time this year and is pushing through price increases on its most advanced chipmaking tools. On the other, its largest customer, Taiwan Semiconductor Manufacturing Co., is pushing back hard, rejecting a proposed 10% hike on both EUV and DUV systems. The standoff has left shares hovering just below their all-time high, caught between optimism over booming demand and concern over how much of that pricing power can actually be realized.
ASML now expects net revenue of €43 billion to €45 billion for 2026, with a gross margin of 54% to 56%. The upgrade follows a second quarter that delivered €9.3 billion in sales, €2.9 billion in net profit, and earnings per share of €7.59. The gross margin came in at 54.0%, right in the middle of the company’s targeted range. For the third quarter, management guided for revenue of €11 billion to €12 billion and a margin of 55% to 57%. Backing those numbers out of the full-year forecast implies a blockbuster fourth quarter of roughly €14.4 billion — a 25% sequential jump and 48% above the same period a year ago.
Chief Financial Officer Roger Dassen has signaled that the company has room to raise prices further, pointing to capacity that is “almost fully booked” through the end of 2027 for its latest EUV systems. ASML is planning to ship at least 60 to 65 low-NA EUV tools this year, with a target of 80 units by 2027, and is laying out a 30% annual capacity increase for both low-NA EUV and ArFi systems in 2027 and 2028. A new campus is being built in Eindhoven, and the company is collaborating with Elon Musk’s Terafab project. Yet the pricing push is creating friction: TSMC has publicly called the high-NA EUV machines — priced at over €350 million each — too expensive for volume production and suitable only for research and development. While some Chinese chipmakers have accepted the 10% DUV price increase, TSMC is refusing to budge on either front.
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That resistance comes as ASML’s geographic mix shifts beneath its feet. China accounted for one-third of system sales in 2025 but is expected to fall to around 20% of total revenue this year as US export curbs tighten and local demand softens. In the second quarter alone, China’s share dropped from 19% to 14%. South Korea, by contrast, now makes up 43% of system sales, reinforcing its position as the single largest end market. The changing exposure adds a layer of geopolitical risk: US Commerce Secretary Howard Lutnick recently raised concerns that an EUV machine may have reached China in violation of export controls — a claim CEO Christophe Fouquet rejected, citing internal safeguards. A bipartisan bill in the US Congress is pushing for further restrictions on DUV shipments to China, while Washington is also backing xLight as a potential EUV alternative.
Analysts remain broadly bullish even as the stock consolidates. Bernstein upgraded its price target to €2,500 from €2,300, calling out “triple happiness” in revenue, capacity, and margin surprises, and forecasting €56 billion in sales for 2027 and €72 billion for 2028. Barclays lifted its target to €2,400 with an overweight rating, while JPMorgan raised its target to $2,400, also overweight. RBC assessed the environment as ripe for price increases despite the TSMC standoff. But the stock closed recently at around €1,570, nearly 10% below its June record of €1,748 and only 5% above its 50-day moving average — a sign that investors are pricing in both the upside and the headwinds.
Morningstar analyst Javier Correonero struck a more cautious note, saying the stock looks “slightly overvalued” with a price-to-earnings ratio of roughly 50, reminiscent of pandemic-era peaks. “There’s a lot baked into the price already,” he said. ASML continues to return capital to shareholders — it bought back €1.1 billion in shares during the second quarter under its 2026-2028 program and will pay an interim dividend of €1.88 per share on August 5 — even as free cash flow came in at just €1.3 billion for the period. The real test for the company’s pricing strategy will unfold in the coming negotiations with TSMC, where the balance between monopoly leverage and customer dependence will determine whether ASML can convert its technological lead into sustained margin expansion.
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