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 (ASX: SKHY) have accepted the plan, which will officially take effect in January next year. This signals that pricing power in the semiconductor equipment supply chain is accelerating its shift toward suppliers, with cost pressure continuing to spread across the industry.

According to reports from South Korean tech media outlet The Lec, ASML's headquarters issued the price increase notice to Samsung and SK hynix through its Korean subsidiary early last month, which was confirmed after negotiations between the procurement departments of both parties. The increase covers all components for EUV and DUV lithography machines, including consumable parts purchased on a regular basis as well as core components that require replacement due to malfunctions or performance degradation, involving optical systems, light sources, precision drive devices, and more.

This blanket one-time 10% increase is regarded by the industry as an unusual move. ASML previously typically adjusted prices for individual components only when raw material costs rose sharply or when procurement of specific materials became difficult. At the same time, ASML is negotiating with major customers over price increases for new equipment, and expectations for higher equipment prices are also rising. Industry observers widely believe that after Samsung and SK hynix accepted the increase, other equipment and component suppliers will gain greater support for their own price hike demands.

ASML Component Price Increase: Broad Coverage, Rare Timing

The price increase covers all replacement equipment components that ASML supplies to the South Korean market, encompassing both EUV and DUV lithography machines. From regularly replaced consumables to critical structural parts, prices will be uniformly raised by 10% starting January 2026.

ASML accounts for its equipment service, components, and upgrade business installed at customer factories as a separate segment. In 2024, this business generated revenue of 8.193 billion euros, accounting for approximately 25% of the company's total revenue of 32.667 billion euros. ASML expects this segment's revenue to grow by more than 30% this year.

A semiconductor industry insider said that while the overall cost of component elements has indeed risen, ASML's move also reflects a consideration to boost its own profit margins at a time when customer profitability is improving.

Equipment Price Negotiations Advance in Parallel; TSMC's Stance Remains Divided

Beyond components, price increases for newly ordered equipment are also being prepared. ASML is currently in discussions with major customers regarding equipment price hikes.

According to a July report by The Information, ASML had notified Chinese semiconductor companies and other customers that DUV equipment prices would rise by 10%, with some customers having already accepted. However, TSMC, ASML's largest customer, is reportedly opposed to the equipment price increase.

Samsung and SK hynix being the first to accept component price increases is interpreted by the industry as an important signal — that amid a supply-demand landscape that has already reversed, the bargaining space for large customers is narrowing.

Price Increase Wave Spreads as Multiple Equipment Giants Follow Suit

ASML is not an isolated case. The trend of price increases in the semiconductor equipment sector has already spread among several leading companies.

U.S.-based Applied Materials stated in its August earnings release that prices for both new and existing products had 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, in response to rising cost pressures. U.S. plasma power equipment maker Advanced Energy also announced price increases for some product lines.

Supply-Demand Imbalance Is the Core Driver

The fundamental cause of this wave of price increases lies in a structural supply-demand imbalance. The AI data center investment boom is driving memory and foundry manufacturers to expand production simultaneously, with equipment and component orders flooding in, while suppliers need time to expand capacity. At the same time, inflation and rising raw material costs have also increased the cost burden on suppliers.

This stands in sharp contrast to the previous dynamic in which semiconductor manufacturers used their procurement scale advantage to push down supplier unit prices. Currently, suppliers' pricing negotiation power has been significantly strengthened.

An industry insider noted that large-scale capacity expansion is now actually being implemented, equipment and components have entered a phase of supply shortage, and as wafer input volumes continue to increase, a large-scale supply gap will also emerge in the consumables segment.