Dutch semiconductor equipment giant ASML is preparing to raise prices for replacement parts used in its lithography machines by 10% in South Korea, according to a report from industry outlet The Elec. The increase, set to take effect in January, applies to parts for both extreme ultraviolet (EUV) and deep ultraviolet (DUV) systems. South Korea's two largest chipmakers, Samsung Electronics and SK hynix, have reportedly accepted the higher prices.
Lithography tools are the ultra-precise machines that print circuit patterns onto silicon wafers, a critical step in manufacturing semiconductors. EUV machines, which use extremely short wavelengths of light, are among the most complex and expensive pieces of equipment in any fab, costing hundreds of millions of dollars each. DUV systems, while older technology, remain widely used for many chip types.
For chipmakers, these machines only generate revenue when they are running. Downtime means lost production and missed orders. That makes replacement parts and consumables—such as lenses, mirrors, and light sources—essential purchases that cannot be postponed, even when the broader chip market is weak.
Why the price hike matters
ASML holds a near-monopoly on EUV lithography, giving it significant pricing power. The company has been expanding its service and parts business, which provides a steady revenue stream that is less cyclical than new machine sales. A 10% increase in replacement-part prices is a direct cost increase for chipmakers, and it comes at a time when the industry is already grappling with high capital expenditures and fluctuating demand.
For Samsung and SK hynix, the acceptance of higher prices reflects their dependence on ASML's technology. Both companies are major producers of memory chips, including DRAM and NAND flash, and they rely heavily on EUV systems for advanced nodes. The price hike will likely be passed through to their operating costs, potentially squeezing margins in a competitive market.
This is not the first time ASML has adjusted pricing. The company regularly reviews its service contracts and parts pricing, and it has been investing heavily in expanding its service network to support a growing installed base of machines. As chipmakers continue to build new fabs and upgrade existing ones, the demand for spare parts is expected to grow, giving ASML further leverage.
What it means for investors
For everyday investors, this news is a reminder that the semiconductor supply chain is not just about the chips themselves, but also about the equipment and services that make them. ASML's ability to raise prices on replacement parts underscores its strong market position and could support its revenue growth even if new machine orders slow.
For Samsung and SK hynix, the higher costs are a headwind, but they are unlikely to derail their long-term plans. Both companies have been investing heavily in advanced manufacturing to stay competitive, and the cost of parts is a relatively small portion of their overall spending. Still, investors should watch how these companies manage their margins in the coming quarters.
The broader context is also important. The semiconductor industry has been through a cyclical downturn, with memory chip prices falling and demand weakening in some segments. However, there are signs of recovery, particularly in areas like artificial intelligence, which is driving demand for high-performance chips. As DRAM prices stay firm and supply tightens, chipmakers may have more room to absorb cost increases.
At the same time, the competitive landscape is shifting. Recent concerns about Chinese chip rivals have rattled South Korean markets, as seen in a sharp drop in the KOSPI index. That volatility highlights the pressure on Samsung and SK hynix to maintain their technological edge, which often means accepting higher costs for the best equipment.
Looking ahead
Investors will be watching to see whether ASML extends similar price increases to other regions or product lines. The company's pricing strategy could have implications for its margins and for the broader semiconductor supply chain. For now, the acceptance by Samsung and SK hynix suggests that ASML's pricing power remains strong.
For those invested in chipmakers or equipment suppliers, this development is a useful reminder of the ongoing costs of staying at the forefront of technology. While price hikes are rarely welcome, they are a sign of a healthy, innovative industry that continues to invest in the future.
