ASML component prices raised across the board by 10%, Samsung and SK Hynix accept the price increase, cost pressure in semiconductor equipment spreads.

Title context: ASML component prices raised across the board by 10%, Samsung and SK Hynix accept the price increase, cost pressure in semiconductor equipment spreads. Text: ASML, the world's largest semiconductor equipment manufacturer, has announced a blanket 10% price increase on components for its South Korean customers. Samsung Electronics and SK Hynix have accepted the plan, and the price hike will officially take effect in January next year. This marks an acceleration in the shift of pricing power in the semiconductor equipment supply chain toward suppliers, with cost pressure in the industry continuing to spread. According to South Korean tech media outlet The Lec, ASML's headquarters sent a price increase notice to Samsung and SK Hynix through its Korean subsidiary early last month, which was confirmed after negotiations between the two sides' procurement departments. The price increase covers all components for EUV and DUV lithography machines, including consumable parts purchased regularly, as well as core components that need replacement due to malfunctions or performance degradation, involving optical systems, light sources, precision drive devices, and more. This blanket one-time 10% increase is seen by the industry as an unusual move. ASML previously typically adjusted prices for individual components only when raw material prices rose sharply or specific materials became difficult to procure. At the same time, ASML is negotiating with major customers over price increases for new equipment, and expectations for price hikes on the equipment itself are also rising. The industry widely believes that after Samsung and SK Hynix accept the price increase, other equipment and component suppliers' requests for higher prices will gain greater support. ASML Component Price Increase: Broad Coverage, Rare Timing The price increase covers all replacement equipment components ASML supplies to the South Korean market, including both EUV and DUV lithography machines. From regularly replaced consumables to key structural parts, prices will be uniformly raised by 10% starting January 2026. ASML accounts for equipment services, components, and upgrade businesses installed at customer factories separately. In 2024, revenue from this business reached 8.193 billion euros, accounting for about 25% of the company's total revenue of 32.667 billion euros. ASML expects this portion of revenue to grow by more than 30% this year. A semiconductor industry source said that the overall cost of component elements has indeed risen, but ASML's move also reflects a consideration to improve its own profit margin while customers' profitability is improving. Negotiations on Equipment Price Increases Advance in Parallel, TSMC's Stance Divergent Beyond components, price increases for newly ordered equipment are also in the works. ASML is currently in discussions with major customers about equipment price increases. According to a July report by The Information, ASML has notified Chinese semiconductor companies and other customers that DUV equipment prices will rise by 10%, and some customers have already accepted. However, TSMC, ASML's largest customer, is reportedly opposed to equipment price increases. Samsung and SK Hynix being the first to accept component price increases is interpreted by the industry as an important signalagainst the backdrop of a supply-demand landscape that has already reversed, the bargaining space for major customers is narrowing. The Price Increase Wave Spreads, Multiple Equipment Giants Follow Suit ASML is not an isolated case. The trend of price increases in the semiconductor equipment sector has spread among multiple leading companies. U.S.-based Applied Materials said in its August earnings release that prices for both new and existing products have been raised. Japan's Tokyo Electron said at its late-July earnings briefing that it is advancing price adjustments, including for equipment already on sale, to cope with rising cost pressure. U.S. plasma power equipment maker Advanced Energy also announced price increases for some product lines. Supply-Demand Imbalance Is the Core DRIVE The fundamental cause of this wave of price increases lies in a structural supply-demand imbalance. The AI data center investment boom has driven memory and foundry manufacturers to expand production simultaneously, with equipment and component orders pouring in, while suppliers need time to expand capacity. At the same time, inflation and rising raw material prices have also increased suppliers' cost burden. This stands in sharp contrast to the past pattern in which semiconductor manufacturers used their procurement scale advantage to push down supplier unit prices. Currently, suppliers' pricing negotiation power has significantly strengthened. An industry source pointed out that large-scale capacity expansion is actually being implemented, equipment and components have entered a stage of supply shortage, and as wafer input volumes continue to increase, a large-scale supply gap will also emerge in the consumables sector. This article is reprinted from Wall Street CN, author: Pan Lingfei; GMTEight editor: Zheng Yuyang.