Nvidia Supplier TSMC Will Push Back Against ASML Rumored Price Hikes, Says Analyst — Potential Pricing Standoff Imminent In Semiconductor Industry?

Renowned analyst Ming-Chi Kuo has forecasted a potential pricing standoff in the semiconductor industry.

What Happened: On Thursday, Kuo an analyst at TF Securities took to X, formerly Twitter, and said that market rumors indicate ASML Holding (NASDAQ:ASML) could hike equipment prices for Taiwan Semiconductor Manufacturing Company Co. Ltd. (NYSE:TSM).

However, Kuo anticipates that TSMC, the world’s largest contract chipmaker, and ASML’s biggest customer, will likely push back against these price increases.

See Also: Apple’s iPhone 16 Powers Record Sales In Q3, Just Behind Samsung In Global Market Share Battle

ASML is the sole manufacturer of high-end extreme ultraviolet lithography systems, which are essential for creating advanced chips.

TSMC relies on ASML’s EUV technology to manufacture cutting-edge semiconductors for various clients, including tech behemoths like Apple and Nvidia.

Kuo’s comments suggest that TSMC’s likely push for price reductions from ASML could lead to a pricing standoff between the two companies.

Why It Matters: This development comes after TSMC reported strong third-quarter results, beating estimates due to robust demand for advanced processor node technologies used in AI applications.

The company, which supplies chips to global corporations including Nvidia Corporation (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL), guided fourth-quarter revenue sharply above the consensus.

Meanwhile, ASML reported third-quarter net sales of 7.5 billion euros ($8.16 billion), surpassing analyst expectations of 7.12 billion euros. However, the Dutch firm revised the upper limit of its full-year sales forecast,

Earlier in the year, TSMC had expressed concerns about the high costs of ASML's new advanced chip machines.

At a technology symposium, TSMC senior vice president Kevin Zhang commented on the high price of the high-NA extreme ultraviolet system, which costs $380 million each.

Photo by Sundry Photography on Shutterstock

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.