The Dutch company ASML announced a 10 percent increase in prices for supplies of replacement parts and components for lithographic equipment for the South Korean companies SK hynix and Samsung. This was reported by The Elec. The solution covers all components for equipment using extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography technologies. The new prices will be valid for deliveries from January next year.
Image source: ASML
According to industry sources, ASML headquarters sent a price increase proposal to Samsung and SK hynix through its Korean unit early last month. The final decision to increase prices was made after consultation with the purchasing departments of both companies.
The increase in price will affect the entire range: from regularly purchased consumables to large units that must be replaced due to breakdowns or reduced operating efficiency. Lithography equipment consists of many parts, including optical elements (such as lenses and mirrors), light sources, and precision actuators.
Previously, ASML adjusted prices for individual components only in cases of significant increases in the cost of raw materials or difficulties in purchasing them. The application of a single price increase of 10% for the entire assortment is an atypical case.
“While prices have increased across the entire range of components, ASML is also seeking to increase its own margins to match its customers’ profit margins.”noted one of the representatives of the semiconductor industry in a conversation with The Elec.
ASML maintains separate records of revenue from service, supply of spare parts and modernization of equipment installed at customer sites. Last year, this area brought the company 8.193 billion euros in revenue, which corresponds to 25% of the company’s total revenue (32.667 billion euros). ASML forecasts this revenue segment to grow by more than 30% this year.
Following the components, prices for new ASML equipment are highly likely to increase. The company is currently discussing increasing equipment costs with its key customers.
In July, The Information reported that ASML had notified Chinese semiconductor companies and other customers of a 10% price increase for DUV equipment. Some customers agreed with this step. It was also reported that the Taiwanese company TSMC, ASML’s largest customer, opposed the price increase. The industry believes that the agreement of Samsung Electronics and SK hynix to increase prices for lithography equipment components, initiated by the world’s largest equipment manufacturer, will add weight to similar demands from other equipment and component suppliers.
The actual rise in prices has already begun, writes The Elec. The American company Applied Materials, during its financial results report in August last year, announced an increase in prices for both new and existing products. Japan’s Tokyo Electron, at its quarterly earnings conference at the end of July, also announced price adjustments, including for equipment on sale, to compensate for rising costs. The American manufacturer of power systems for plasma equipment, Advanced Energy, also announced price increases for some of its product lines.
It is reported that the price increase is due to an imbalance in supply and demand. As memory chip manufacturers and semiconductor contract manufacturers (foundry companies) simultaneously increased capacity due to investments in data centers for artificial intelligence (AI) systems, orders for equipment and components skyrocketed. However, suppliers need time to increase output by expanding production capacity. In addition, rising inflation and raw material costs have increased the financial burden on suppliers. While semiconductor companies used to use their purchasing power to demand lower prices, equipment suppliers now have stronger bargaining power over pricing.
“Since there is now a large-scale expansion of production, there is a shortage in the market for equipment and components. If silicon wafer loading volumes increase, acute shortages will also arise in the segment of materials used in the production process.”noted an industry representative.
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