TSMC Supply‑Chain Strain
- TSMC said it will delay using ASML's most advanced High‑NA lithography machines in production until 2029 over cost concerns. - TSMC reported first-quarter revenue of $35.9 billion and analysts forecast more than 30% growth this year. - The delay, plus a naphtha crunch hurting photoresist supply, highlights cost and material risks in the chip supply chain ( ).
Taiwan Semiconductor Manufacturing Co. says it will wait until 2029 to use ASML’s newest chipmaking machines in production because the tools cost too much. (bloomberg.com) TSMC deputy co-chief operating officer Kevin Zhang said the company has no current plan to adopt ASML’s High-NA extreme ultraviolet systems before then. Bloomberg reported the machines sell for more than €350 million, or about $410 million, each. (bloomberg.com) TSMC made the call while reporting first-quarter 2026 revenue of $35.9 billion, above its own guidance range of $34.6 billion to $35.8 billion. The company guided second-quarter revenue to $39.0 billion to $40.2 billion and posted a 66.2% gross margin in the first quarter. (investor.tsmc.com) High-NA is the next version of extreme ultraviolet lithography, the light-based printing step used to carve chip patterns onto silicon. TSMC said it can keep using current extreme ultraviolet tools and still put its A13 leading-edge process into production in 2029. (bloomberg.com) The timing lands as another part of the chip supply chain is under pressure: photoresist, the light-sensitive chemical coating used during lithography. South China Morning Post reported on April 23 that a naphtha shortage was tightening supply of the solvents used to make that material. (scmp.com) SCMP said the Strait of Hormuz has been effectively closed since early March, cutting supplies of naphtha, a feedstock used in specialty chemicals for chipmaking. The report said the strain is expected to hit advanced nodes that rely on extreme ultraviolet lithography the hardest. (scmp.com) Japanese suppliers dominate photoresist. SCMP, citing Shenzhen Enterprise Investment Research and the China Electronics Materials Industry Association, said JSR, Tokyo Ohka Kogyo, Shin-Etsu Chemical and Fujifilm held 76% of the global market in 2023. (scmp.com) Reuters reported on April 15 that Japanese companies dependent on naphtha-based materials were already halting orders or cutting production, even as the government said it had enough naphtha for four months. Japan sourced 40% of its naphtha from the Middle East before the February 28 attacks on Iran, according to Reuters. (usnews.com) Analysts still expect TSMC’s sales to grow more than 30% this year, driven by artificial-intelligence demand and advanced-node capacity. That leaves the company expanding into 2026 with strong orders, but also with sharper exposure to the cost of tools and the availability of chemicals. (investor.tsmc.com, digitimes.com) For now, TSMC is telling customers and suppliers that the next chip race will not be decided by one machine alone. In 2026, the constraints are showing up in both the price of the tools and the raw materials needed to run them. (bloomberg.com, scmp.com)
