TradingKey - On July 15, Eastern Time, the world's largest lithography machine manufacturer ASML stated that as demand for advanced chip-making equipment continues to grow, the company has room to further increase the selling prices of some of its products. ASML Chief Financial Officer Roger Dassen noted that the current market environment provides a favorable window for equipment price increases, and the company is currently discussing pricing issues with customers, though it has not yet announced the specific magnitude of the price hikes or the timing of implementation.

ASML's price hike plans are primarily driven by the investment boom in artificial intelligence chips. TSMC ( TSM ), Samsung Electronics, and Intel ( INTC) and other chipmakers are expanding advanced-process capacity, driving a rapid increase in demand for extreme ultraviolet (EUV) lithography equipment. ASML's mainstream EUV equipment capacity is reportedly close to being fully booked through the end of 2027, meaning that customers will find it difficult to obtain alternative products from other suppliers in the short term, which further bolsters the company's bargaining power.

According to a report by The Information, some Chinese customers have accepted a price increase of approximately 10% for ASML's older deep ultraviolet (DUV) lithography equipment, but its major customer TSMC is resisting the price hikes. ASML and TSMC have not yet officially responded to these reports.

Rising equipment prices are expected to directly improve ASML's revenue and profit margins. In its recently released second-quarter financial results, the company reported net sales of 9.33 billion euros and net profit of 2.92 billion euros, while upwardly revising its full-year 2026 revenue guidance to between 43 billion and 45 billion euros, with gross margin expectations raised to 54% to 56%. Strong orders and room for price hikes mean that ASML's future performance could be further supported.

ASML daily stock price chart, Source: TradingView

For the stock price, the news of price hikes has reinforced market expectations regarding ASML's monopolistic advantages and profitability, with ASML's US ADRs rising 2.23% following the earnings release. However, if equipment costs continue to climb, it could increase capital expenditure pressures on chipmakers and prompt customers to delay some of their procurement plans. Therefore, subsequent stock price performance will still depend on whether the price hikes can be successfully implemented and whether order growth is sufficient to offset customer resistance to higher prices.

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