TSMC weighs ASML’s High-NA machines as Intel plans adoption

Taiwan Semiconductor Manufacturing Company (TSMC) is assessing the timing for integrating ASML’s advanced high numerical aperture (High-NA) machines into its production.

Each of these machines is valued at nearly US$400 million, making them the most expensive equipment in chip fabrication.

Kevin Zhang, TSMC’s senior vice president, said there’s no urgent need for High-NA tools for its A14 node or its enhanced versions, as TSMC is improving Low-NA extreme ultraviolet (EUV) efficiency instead.

Meanwhile, Intel plans to adopt High-NA for its 14A process to strengthen its foundry business, though older options will remain available.

ASML expects High-NA machines to be tested for mass production readiness by 2026 to 2027, with deliveries made to TSMC, Intel, and Samsung.

TSMC also decided against using High-NA for its future A16 node, mainly due to the equipment’s high cost.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ TSMC’s conservative approach reflects strength, not weakness

TSMC’s reluctance to commit to $400 million High-NA machines demonstrates its ability to extend existing technology rather than a technological disadvantage.

The company has consistently managed to enhance performance of existing manufacturing processes, as evidenced by Kevin Zhang’s statement that the A14 improvements are “very substantial without using High-NA” 1.

This approach is consistent with TSMC’s historical strategy that transformed it from being two generations behind competitors in the early days to becoming the dominant player with 61.7% market share in contract chip manufacturing 2.

TSMC’s smart manufacturing innovations, which have reportedly improved cycle time by at least 50% through AI and machine learning integration, demonstrate how the company extracts maximum value from existing technologies before adopting costlier solutions 3.

This strategic patience has served TSMC well, allowing it to maintain manufacturing leadership while carefully managing capital expenditures, a crucial advantage in an industry where a single fab can cost over $20 billion.

2️⃣ The $400 million question: When advanced lithography becomes economically viable

The decision to adopt High-NA technology represents a fundamental economic calculation about when the benefits of advanced lithography justify its enormous price tag.