VenkatP
Physician, Growth & Value Stock Investor
ASML has yet to fall despite losing its biggest customer, TSMC, until 2029, a customer responsible for 70% of its revenue. That disconnect reflects the current state of the chip bubble. x.comÂ
ASML's reported inability to make enough machines for the next two years is a buy signal for the whole AI stack. Its stock still sold off despite that shortage. x.comÂ
ASML remains essential even if AI capital spending slows: advanced chips cannot be made without its lithography equipment, for which there is no alternative. It belongs among the infrastructure businesses that can work through a pause in the cycle. x.comÂ
TSMC looks like it has put in a blowoff top, rising even on an announcement that it cannot afford new ASML equipment. x.comÂ
Requests for ASML lithography-tool slots as far out as 2030 signal years of locked-in downstream AI infrastructure spending plans. ASML's machines come before the chips, making those customer requests a clearer early demand signal than chip headlines. x.comÂ
ASML's long case may gain some pricing power as Intel, Samsung, TSM and the memory boom broaden demand beyond its former customer concentration. But it has bungled packaging, where throughput matters more than critical dimension for viable economics; charging a new-machine price for wider field of view complicates the opportunity. x.com x.com x.com x.com x.comÂ
TSMC may lose pricing power as performance gains shift from shrinking transistors to stacking, interconnects and optics, while logic folding could make older processes competitive. Despite strong leading-edge demand, investors may overestimate the profit share its node leadership can retain. Its cautious expansion and past reluctance toward advanced packaging suggest a risk-averse culture that protects returns but could leave it late to disruptive technologies and key customers. x.comÂ
ASML may have topped, since semicap thrives on shortage and would be hit hardest in an overbuild. Then earnings acceleration from memory and fab projects stops or reverses; the labs' leading-edge chase may be at its apex, positioning is bullish and the moat is threatened. Bullishness on Korean, US and Taiwan fab projects makes sense for now. But if the cycle top is confirmed and labs change how they chase the frontier, or token deflation kills some labs, the shortage can end sooner. x.com x.com … Show more
ASML is getting paid more for each tool, moving beyond proving it can build enough of them. Q3 2026 brings pricing power and an order book reaching 2030; the house view has strengthened, with high conviction. x.comÂ
ASML faces moat erosion now that China has a homegrown alternative to its machines. The Information reports a state-backed Shanghai company has started mass-producing DUV lithography tools. Chinese fabs stockpiling older DUV tools had become a major revenue driver, with China at 36% of sales in 2024 and 29% last year. Output is tiny, about five machines this year and maybe twenty next. But once a second supplier exists, the question shifts from "no alternative" to "for how long." x.comÂ