ASML Holding NV, the Dutch semiconductor equipment giant, saw its market capitalization briefly exceed $500 billion for the first time on January 15, 2026, following blockbuster earnings from its key client, Taiwan Semiconductor Manufacturing Company (TSMC). The stock surged over 7% in early trading, reaching €1,167 per share, after TSMC reported a 35% year-over-year jump in net income to $16.3 billion, beating analyst expectations.
The rally was fueled by analyst optimism linking TSMC's performance directly to ASML's future. RBC Capital initiated coverage on ASML with an Outperform rating and a $1,550 price target, citing strong demand for generative AI applications, tight DRAM supply, and secular growth in extreme ultraviolet (EUV) lithography technology. ASML's valuation reached approximately 443 billion euros ($515 billion), cementing its position as Europe's most valuable company.
However, the celebration was tempered later in the day as ASML shares edged lower. The slight decline reflected growing market concerns over supply chain pressures stemming from TSMC's massive 2026 capital expenditure plans, forecasted to reach up to $56 billion. While this spending signals robust demand for ASML's advanced lithography machines, analysts caution that supply bottlenecks could limit near-term growth.
ASML's supply capacity, especially for high-end EUV equipment priced around $150 million and next-generation High-NA EUV machines costing nearly $380 million, is inherently constrained. The company's high revenue per machine comes with limited production volumes, creating tension as TSMC's needs expand. Furthermore, TSMC's spending is heavily weighted toward fabs, cleanrooms, and advanced packaging technologies like CoWoS, with lithography tools representing only a fraction of the total budget.
Supply chain bottlenecks are expected to persist, affecting components for EUV systems such as mirrors, photoresists, and metrology tools. The technical complexity of High-NA EUV systems, required for 2nm-class chip production, has amplified these constraints. Industry observers warn that capacity may remain tight through 2027-2028, potentially limiting ASML's ability to fully capitalize on the AI-driven chip demand boom despite its central role in the global semiconductor ecosystem.
