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

On Thursday, shares of companies involved in semiconductor equipment, including ASML, Lam Research, Applied Materials, and KLA Corp, climbed significantly. This rise came about after Taiwan Semiconductor Manufacturing Co. (TSMC), recognized as the largest contract chipmaker globally, released a capital expenditure (capex) forecast for the upcoming year that exceeded what analysts had anticipated.

TSMC's American Depositary Receipts (ADRs) saw an increase of over 4% in premarket trading in the United States, following the announcement of its capex guidance range of $38 billion to $42 billion for 2025. This figure is notably higher than the average analyst expectation of around $35.1 billion. This optimistic forecast has given rise to hopes for a prosperous year in the semiconductor industry.

ASML, a pivotal player in the semiconductor equipment landscape, witnessed a 4% rise in its stock price. The company is well-known for its advanced lithography systems, which are essential for chip manufacturing. ASML is positioned to gain from TSMC's heightened investment in advanced packaging technologies, which accounted for over 8% of TSMC's total revenue in 2024, with projections suggesting an increase to 10% in the current year.

In addition, TSMC plans to direct between 10% to 20% of its capex in 2025 towards advancements in packaging, testing, mask-making, and other critical areas. This is an increase compared to just approximately 10% that was allocated for capex in 2024. This strategic focus on advanced packaging underscores its growing significance within the semiconductor realm.

Furthermore, TSMC has forecasted an impressive mid-40% compound annual growth rate for AI accelerator sales over the next five years, starting from 2024, signaling robust growth potential within this segment.

TSMC's positive outlook serves as an essential boost for ASML, especially as analysts pointed out the slowing orders in other segments due to a downturn in the semiconductor market and challenges already facing major clients like Intel and Samsung.

In the U.S. market, KLA Corp saw its stock rise by 3%, while Lam Research and Applied Materials registered increases of 3.2% and 3.1%, respectively. Over in Europe, ASML’s stock also saw upward movement, and BE Semiconductor, which specializes in tools for advanced chip packaging, surged by 5%.

This increase in stock prices illustrates rising investor confidence in the semiconductor equipment sector, fueled by TSMC's ambitious investment strategies that are expected to boost demand for the offerings from companies in this field.

ASML, TSMC, semiconductors