Why Markets Failed to Appreciate ASML and TSM Results - The Globe and Mail

Despite strong quarterly results from ASML and Taiwan Semiconductor Manufacturing (TSMC), share prices fell, reflecting market overpricing of their growth potential and expectations. ASML reported rev... Read original →

The market’s negative reaction to ASML and TSMC’s strong earnings reveals a fundamental misreading of AI-driven semiconductor cycles by short-term capital. Technically, EUV delivery bottlenecks are delaying the 3nm-to-2nm transition, pushing Samsung and Intel to fast-track High-NA adoption—raising industry-wide R&D costs. On compliance, TSMC’s $100B U.S. expansion benefits from subsidies but faces immature local supply chains and labor shortages that threaten its 67.7% gross margin. Export controls remain ASML’s biggest operational risk. Strategically, Samsung may undercut pricing to gain share, while SMIC remains confined to DUV-limited nodes. Over the next 18 months, EUV capacity concentration will intensify, cementing ASML and TSMC as de facto tollgates in AI chip manufacturing—making current stock volatility irrelevant to their structural dominance.