TSMC ADR hits a record high, delays the introduction of ASML’s high-end equipment to control costs

TSMC ADR (U.S. stock ticker: TSM) surged more than 5% yesterday, closing at 387.44 U.S. dollars, a historic high. Using a new Taiwan dollar exchange rate of 31.49, the implied price for Taiwan stock 2330 should be 2,440 yuan. While capital expenditures are continuously expanding, TSMC will postpone the introduction of ASML High-NA EUV equipment. Its R&D team has successfully unlocked more potential on the basis of existing equipment, and continues to drive forward the process roadmap.

TSMC sets a new record high, as foreign investors纷纷 raise their price targets

Recently, TSMC has benefited from the rapid growth in the AI chip application market, and its ADR share price has reached a new high. Multiple foreign brokerage firms have also raised their target prices based on its financial forecasts. Among them, Barclays raised its target price from $450 to $470.

TSMC ADR closed yesterday at the historic high of 387.44 U.S. dollars. Based on the new Taiwan dollar exchange rate of 31.49, the implied price for Taiwan stock 2330 should be 2,440 yuan. However, Taiwan stocks (2330) typically trade at a discount of more than 10% compared with U.S. stocks (TSM).

Balancing TSMC’s technology moat and capital expenditures

At the core of TSMC’s ability to maintain industrial competitive advantages is its deep and difficult-to-easily-replicate “technology moat,” along with a rigorous capital expenditure plan. Whether it is advancing R&D for the 2-nanometer process or expanding capacity for advanced packaging, TSMC ensures technological leadership through large-scale R&D and capital investment. However, what comes with technological upgrades is the pressure of massive equipment depreciation and capital burdens. Striking the best balance among pushing the limits of “Moore’s Law,” maintaining technological advantages, and ensuring overall “gross margin” stability is management’s top priority right now—and it also directly shapes the company’s equipment procurement roadmap.

TSMC postpones the introduction of ASML’s high-end lithography tools: a cost-control strategy

According to a report by Bloomberg, Zhang Xiaoqiang, senior vice president for global operations and co–deputy chief operating officer of TSMC, said that the company will continue using its existing EUV lithography tools for technology upgrades and will extend deployment in chip mass production until 2029, when it will roll out the latest High-NA EUV equipment from (ASML).

As modern chip manufacturing costs keep rising, the world’s leading semiconductor manufacturers must be prudent in spending to maintain their profitability. Today, building a cutting-edge chip fabrication plant costs roughly $20 billion to $30 billion. Facing high operating costs and ongoing overseas expansion, TSMC plans to make record capital expenditures in 2026, which could approach $56 billion.

The per-unit price of the ASML equipment exceeds 350 million euros (about 410 million U.S. dollars). Zhang Xiaoqiang said that its R&D team has successfully unlocked more potential on the foundation of existing equipment and continues to advance the process roadmap. Hit by this development, ASML’s shares on Wednesday (22nd) fell 1.09% to $1,443.14 per share. But for TSMC itself, it can effectively manage and control massive capital expenditures. This strategy not only helps prevent the risk of profit dilution caused by excessive investment, but also reflects the company’s integrated considerations of both technological evolution and strict financial discipline.

This article, “TSMC ADR hits an innovation high and controls costs by delaying the introduction of ASML’s high-end equipment,” first appeared on Lianxin ABMedia.