Taiwan Semiconductor Vs. ASML: If I Had to Choose One For the Next 5 Years, It’s This One
AI-summarised brief · reviewed before publication
Taiwan Semiconductor Manufacturing Co. (TSMC) reported September revenue up 54.6% year‑over‑year, driven by a 20% quarter‑over‑quarter rise in high‑performance computing (HPC) wafer sales, which now account for two‑thirds of its revenue. The company’s Q2 earnings hit $40.2 billion with a 67.7% gross margin, while its new 2 nm process contributed 3% of wafer revenue in its first quarter and is expected to scale quickly, though it may shave 3–4 percentage points off margins in Q3. Capital spending for 2026 is set between $60 billion and $64 billion. Dutch lithography supplier ASML posted €9.3 billion in sales, surpassing forecasts, and lifted its full‑year guidance to €43‑45 billion, citing strong installed‑base upgrades and near‑full order coverage for its low‑NA EUV machines in 2027. ASML’s high‑NA EUV system has entered high‑volume qualification, while China remains a 20% sales exposure and a regulatory risk. Analysts note TSMC’s higher growth trajectory and lower forward P/E give it a valuation edge over ASML for the next five years.
💡 Why It Matters
- · TSMC’s rapid HPC wafer expansion and aggressive 2 nm rollout position it to dominate AI‑driven chip demand, while ASML’s earnings boost hinges on a single product line that faces geopolitical headwinds.
