ASML shares climb with TSMC's strong future plans
Veldhoven, Friday, 17 January 2025.
ASML Holding’s stock has seen a notable rise following Taiwan Semiconductor Manufacturing Company’s (TSMC) upbeat revenue projections and capital expenditure plans. TSMC announced plans to invest between 38 billion and 42 billion dollars in 2025, marking a substantial increase from its previous estimates. These funds will boost areas like advanced packaging, where TSMC aims to allocate up to 20% of its spending. This development is crucial for ASML, a key supplier in the semiconductor supply chain known for its advanced lithography systems. The stock price hike of 6% to 7% reveals renewed investor confidence in ASML and the broader semiconductor sector. Despite previous industry challenges, this positive outlook suggests a potential turnaround, driven by TSMC’s commitment to innovation and expansion. ASML’s crucial position in enabling new technologies underlines the significance of these developments.
Market response and stock performance
ASML’s stock demonstrated strong momentum on January 17, 2025, reaching 750.28 USD, marking a 3.302% increase [2]. The stock traded between 748.46 USD and 771.56 USD during the session [2]. This upward movement came after TSMC announced its ambitious capital expenditure plans of 38-42 billion USD for 2025 [1]. The semiconductor equipment manufacturer’s shares had previously experienced a challenging period, with a decline of over 28% in the past six months [1].
TSMC’s strategic investment impact
TSMC’s commitment to advanced packaging has particular significance for ASML’s outlook. The Taiwanese chip giant plans to allocate 10-20% of its capital expenditure to advanced packaging in 2025, up from approximately 10% in 2024 [1][6]. This increased focus on sophisticated manufacturing processes directly benefits ASML, as its advanced lithography systems are essential for high-end semiconductor production [6]. TSMC’s strong quarterly performance, including net income of 11.38 billion USD, exceeding forecasts of 11.29 billion USD, further reinforces market confidence [1].
Analyst outlook and market sentiment
Market analysts maintain a predominantly positive outlook for ASML, with 75% of analysts issuing buy ratings and 25% recommending hold positions [5]. The average target price stands at 823.03 USD, with estimates ranging from 751.09 USD to 860.00 USD [5]. This optimistic sentiment is supported by TSMC’s forecast of 40% compound annual growth rate in AI accelerator sales over the next five years starting from 2024 [6], suggesting sustained demand for ASML’s advanced manufacturing equipment.