ASML locks in TSMC, Samsung, and Intel while Huawei races to break its grip
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ASML has secured commitments from TSMC and Samsung to adopt its High-NA EUV lithography machines, joining Intel, which already has them running. Samsung plans to use the technology for high-volume manufacturing starting in 2028, while TSMC will follow in 2030. These machines, costing up to $400 million each, are essential for producing advanced AI chips, and the transition involves moving from six-inch to twelve-inch photomasks to increase throughput by 40 percent. TSMC had previously hesitated due to costs but has now reversed course, a significant shift given that TSMC accounts for about 16 percent of ASML's revenue. Meanwhile, Huawei is leading China's effort to reduce reliance on ASML by focusing on older DUV lithography technology instead of EUV. Central to this push is Shanghai-based Yuliangsheng, which has developed China's first advanced DUV machine, currently being tested by SMIC and Huawei, with a goal of producing twelve machines by year-end. Key challenges remain in projection lenses and light sources, as Yuliangsheng uses lenses from Zeiss, which sells only to ASML, prompting Huawei's venture arm to invest in alternative suppliers. Chinese efforts are still far behind ASML, but the broader aim is to circumvent Western export controls.
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