ASML and Related Stocks Surge Following TSMC's Strong Capex Outlook

Shares of semiconductor equipment manufacturers have seen a notable uptick, prominently featuring ASML, Lam Research, Applied Materials, and KLA Corp. This positive momentum in stock prices was triggered by Taiwan Semiconductor Manufacturing Co. (TSMC), the largest contract chipmaker in the world, sharing its capital expenditure (capex) forecast for the upcoming year, which exceeded industry expectations.

In the US premarket trading, TSMC's American Depositary Receipts (ADRs) experienced a surge of over 4%. The company provided a capex guidance between $38 billion and $42 billion for 2025, significantly higher than the average forecast from analysts, which stood at around $35.1 billion. This forecast is expected to create a favorable environment for US and European semiconductor equipment companies as it suggests a promising year ahead for the semiconductor industry.

ASML, recognized for its pivotal role in the semiconductor equipment sector, enjoyed a 4% spike in its stock price. The company's advanced lithography systems are essential for chip manufacturing, and it stands to gain from TSMC's intensified investment in advanced packaging techniques. In 2024, advanced packaging constituted more than 8% of TSMC's overall revenue and is anticipated to reach 10% this year.

Moreover, TSMC plans to assign between 10% to 20% of its 2025 capex toward advanced packaging, testing, mask-making, and other relevant areas, contrasting with the approximately 10% capex allocated for 2024. This strategic direction highlights the increasing significance of advanced packaging technologies in the semiconductor landscape.

TSMC also projected a remarkable mid-40% compound annual growth rate for AI accelerator sales over the next five years, beginning in 2024. This implies substantial growth opportunities in this segment.

The upbeat forecast from TSMC is a critical development for ASML, especially as analysts note a slowdown in orders stemming from downturns within the chip industry and challenges encountered by major clients like Intel and Samsung.

Across the US market, KLA Corp experienced a 3% increase in its stock, while Lam Research's shares rose by 3.2%, and Applied Materials saw a 3.1% gain. In Europe, ASML's stock saw a boost, and BE Semiconductor, which specializes in advanced chip-packaging tools, reported a 5% increase.

This surge in stock values illustrates a growing optimism among investors regarding the potential expansion in the semiconductor equipment sector, driven by TSMC's assertive investment plans that could generate heightened demand for the products and services provided by these companies.

ASML, TSMC, Stocks