TSMC Weighs Decision on Investing in ASML’s $400 Million NA Machines as Current Hardware Supports 1.4nm Wafer Production

The shift to advanced lithography techniques at TSMC hinges on the acquisition of sophisticated Extreme Ultraviolet (EUV) machines. These state-of-the-art systems are essential for the rapid production of 2nm wafers with minimal defective outputs. Earlier this year, TSMC began accepting orders for this innovative fabrication process, with MediaTek planning to initiate the tape-out of its inaugural 2nm chipset by the fourth quarter of 2025. However, progressing into the sub-2nm domain necessitates the use of exceptional equipment. ASML’s high numerical aperture (NA) technology is considered crucial for tackling these complex manufacturing tasks. A recent report indicates, however, that TSMC remains hesitant about procuring such costly machinery.

High Costs Surrounding EUV Machines Pose a Challenge for TSMC

The most advanced EUV systems deployed by TSMC come with a substantial financial commitment, nearing half the cost of ASML’s latest NA technology. As TSMC anticipates the 2nm process to reach maturity in the coming years, it has reportedly set its sights on the 1.4nm node, which is designed to deliver an impressive 30% reduction in power consumption. This technology, referred to as A14 or 14-Angstrom, is expected to begin mass production in 2028. Implementing this advanced lithography will likely rely on cutting-edge machinery, specifically ASML’s High-NA systems. Nonetheless, according to Reuters, TSMC is currently weighing the necessity of making such an investment.

Kevin Zhang, TSMC’s Senior Vice President, recently addressed the company’s exploration of these advanced nodes, questioning the requirement to allocate $400 million for ASML’s premium machines. He suggested that the current pricing does not offer a compelling justification for making the upgrade. To optimize its operations, TSMC has effectively utilized its existing EUV technology, extracting maximum value from its current machinery.

As long as their existing hardware continues to perform adequately for the latest lithography processes, TSMC may postpone any significant purchases. Meanwhile, ASML has other clients eager to enhance their competitive edge; the Dutch manufacturer has already dispatched five units of its High-NA machinery to various customers, including Samsung. Notably, Samsung has reportedly assembled a dedicated team focused on 1nm fabrication, targeting production availability by 2029.

Whether TSMC ultimately decides to invest in a High-NA machine remains uncertain. However, the company has successfully sustained a leadership position in the industry for several years, suggesting they may be employing effective strategies to maintain their competitive advantage.

News Source: Reuters

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