TSMC vs. ASML: Which AI Chip Stock Looks Better for the Long Run?
The article weighs TSMC against ASML as long-term AI supply-chain investments, favoring TSMC partly because of its lower forward P/E and roughly 25% annual revenue growth target through 2029. TSMC's September revenue increased 54.6% year over year, while ASML beat its quarterly guidance and lifted its full-year outlook to €43 billion–€45 billion. ASML still faces export-control risk because China represents about 20% of its sales.
TSMC and ASML occupy different links in the AI semiconductor chain: one fabricates advanced chips, while the other supplies the lithography equipment needed to produce them. TSMC's September revenue rose 54.6% from a year earlier, and its Q2 gross margin was 67.7%, with high-performance computing at 66% of sales.
ASML's quarterly revenue of €9.3 billion exceeded guidance, helped by services and upgrades from its existing tool base about €300 million above plan. It raised its full-year outlook to €43 billion–€45 billion. China accounts for roughly 20% of ASML sales, leaving export restrictions a persistent risk.
Investors comparing these firms may weigh growth, valuation, and geopolitical exposure differently, potentially shifting capital toward chipmakers with lower multiples. Semiconductor customers and device buyers could feel effects through capacity, pricing, and availability of advanced AI hardware. Export restrictions affecting ASML's China sales may influence equipment access and supply-chain planning, while TSMC's Taiwan-linked risk could shape long-term investment and production decisions across the technology sector.