The semiconductor industry runs on two irreplaceable companies: ASML and TSMC. ASML 
This comparison uses Vantafin market data, earnings results, and financial filings to break down the key differences across market cap, revenue, earnings, valuations, and strategic positioning. Whether you are evaluating ASML vs TSMC for a portfolio position or want to understand the architecture of the semiconductor supply chain, this guide delivers the data-backed analysis you need.
Market Cap and Scale: The Size Gap
ASML and TSMC occupy different tiers of the semiconductor universe in terms of sheer scale. As of August 2026, TSMC commands a market capitalization of $2.10 trillion, making it one of the most valuable companies in the world and the largest semiconductor manufacturer by revenue. ASML, while no small player at $626.38 billion in market cap, sits roughly 3.4x smaller than its downstream customer.
| Metric | ASML | TSMC |
|---|---|---|
| Market Cap | $626.38 billion | $2.10 trillion |
| Share Price | $1,625.20 | $404.00 |
| P/E Ratio (TTM) | 62.77 | 35.0 (est.) |
| TTM Net Margin | 29.71% | 47.00% |
| TTM EPS | $25.89 | ~$13.50 (USD) |
| Revenue (TTM) | $33.69 billion | ~$147 billion (USD) |
TSMC's dominance as the world's leading contract chipmaker has driven its valuation to levels that rival the largest technology companies. ASML's monopoly position in EUV lithography supports its premium valuation, but the company generates revenue at a fraction of TSMC's scale. Both companies have added hundreds of billions in market value since the AI boom accelerated in 2023.
For more on semiconductor sector dynamics, explore our Market Insights hub covering earnings analysis, filing insights, and sector comparisons.
Stock Performance: A Tale of Two Semiconductors
Both ASML and TSMC have delivered substantial returns for long-term shareholders, but the recent trajectories have shown meaningful divergence amid the AI infrastructure buildout.
The 90-day chart reveals notable volatility for both semiconductor plays. ASML peaked near $1,999 in late June 2026 before pulling back sharply, closing at $1,629 by late July, a decline of approximately 6% over the period. TSMC showed similar volatility, reaching highs near $479 before settling around $404, representing a decline of roughly 1% over the same window. Both stocks experienced significant intra-day swings reflecting the sensitivity of semiconductor valuations to CapEx cycle expectations and AI demand signals.
Revenue Deep Dive: Scale Versus Growth
TSMC generates revenue at a scale ASML has not yet approached. In Q2 2026, TSMC reported $39.36 billion in revenue, a figure that dwarfs ASML's €9.3 billion (approximately $10.3 billion USD) in the same period. [[cite:S36]]
TSMC's revenue growth trajectory reflects the explosive demand for leading-edge chip manufacturing. The company guided Q3 2026 revenue to $44.6-45.8 billion, representing 37% year-over-year growth at the midpoint. [[cite:S38]] This places TSMC on pace for approximately $160 billion in annual revenue, up from roughly $90 billion in 2024.
ASML's revenue, reported in euros, showed €9.3 billion in Q2 2026, exceeding the high end of guidance due to stronger-than-expected Installed Base Management sales. [[cite:S69]] The company raised its full-year 2026 guidance to €43-45 billion, up from the prior range of €40-44 billion. [[cite:S69]]
ASML has beaten earnings estimates in most recent quarters, though the Q3 2025 period showed a notable miss amid semiconductor inventory corrections. The company has bounced back strongly, with Q2 2026 EPS of $8.68 beating estimates of $7.98. [[cite:S37]]
TSMC has delivered consistent earnings beats, with Q2 2026 EPS of $4.31 crushing estimates of $3.87. The company's earnings have roughly doubled over the past eight quarters, reflecting the scaling of AI chip production. [[cite:S36]]
Earnings Power: Margins Tell the Story
Profitability separates the semiconductor leaders from the pack, and TSMC's margins reveal why it commands such a premium valuation.
TSMC reported Q2 2026 gross margin of 67.7%, above guidance, driven by cost improvement efforts and higher capacity utilization. [[cite:S39]] The company guided Q3 gross margin to 65%-67%, with dilution expected from the steep ramp of 2nm technology (approximately 3-4 percentage points) and overseas fab expansion (2-4 percentage points). Net margin for TTM stands at approximately 47%.
ASML's gross margin for Q2 2026 came in at 54%, above guidance, with net income of EUR 2.9 billion representing 31.3% of total net sales. [[cite:S69]] The company's long-term gross margin target remains in the 54%-56% range, below TSMC's levels due to the capital-intensive nature of equipment manufacturing.
| Metric | ASML | TSMC |
|---|---|---|
| Gross Margin (Q2 2026) | 54% | 67.7% |
| Net Margin (TTM) | 29.71% | 47.00% |
| Q2 2026 EPS | $8.68 (EUR 7.59) | $4.31 |
| Cash Return | Dividends + Buybacks | Dividends + Buybacks |
TSMC generates more profit per dollar of revenue than ASML, reflecting the economics of high-volume chip manufacturing at advanced nodes. However, ASML's installed base services business provides high-margin recurring revenue that partially offsets the difference.
Valuation: What Are You Paying For?
Comparing valuations between ASML and TSMC requires context about growth expectations and business models.
| Valuation Metric | ASML | TSMC |
|---|---|---|
| P/E Ratio (TTM) | 62.77 | ~35 (estimated) |
| P/S Ratio (TTM) | 18.59 | ~12 (estimated) |
| Market Cap | $626.38 billion | $2.10 trillion |
| Revenue (TTM) | $33.69 billion | ~$147 billion |
ASML trades at a premium P/E of 62.77, reflecting its monopoly position in EUV lithography and the structural demand for advanced chipmaking equipment. TSMC's estimated P/E of approximately 35 appears more reasonable given its growth rate and margins, though both trade at premiums to the broader semiconductor sector.
Strategic Positioning: The Symbiotic Supply Chain
ASML and TSMC exist in a unique symbiotic relationship. ASML manufactures the lithography machines that TSMC uses to fabricate the world's most advanced chips. Neither can function without the other, and both have become essential nodes in the global semiconductor supply chain.
ASML's competitive moat is virtually unsurmountable. The company is the sole manufacturer of EUV lithography systems, which are required to produce chips at 7nm and below. ASML is also developing High-NA EUV, the next generation of lithography that will enable even smaller feature sizes. On the Q2 2026 earnings call, CEO Christophe Fouquet noted that Intel Foundry is using ASML High-NA EUV technology on the Intel 18A process node to produce a subset of its Intel Core Ultra Series 3 processors, marking an important production milestone. [[cite:S74]]
TSMC's competitive moat lies in its manufacturing excellence, yield rates, and customer relationships. The company operates at scale that no competitor has matched. On the Q2 2026 call, Chairman and CEO Dr. C.C. Wei addressed foundry competition directly: "Choosing a technology, ramping it up, is not buying milk from 7-Eleven. It says that you're choosing a kind of technology partner. There is no shortcut. You need to understand the technology, prepare the capacity, and ramp it up. That's why I say it takes about five years." [[cite:S56]]
TSMC's technology roadmap remains aggressive. The company is ramping N2 (2nm) rapidly, with 3% of wafer revenue from 2nm in Q2 2026. [[cite:S39]] A14 technology (1.4nm equivalent) is on track for volume production in 2028, with internal product line vehicles showing close to 90% device performance and 90% 256Mb SRAM yield. [[cite:S40]]
AI Infrastructure: The Demand Driver
Both ASML and TSMC are beneficiaries of the AI infrastructure buildout, but the dynamics differ.
TSMC sees AI demand as "extremely robust." On the Q2 2026 call, Dr. Wei stated: "The AI megatrend continues to drive the need for more and more computation, which supports the robust demand for leading-edge silicon. Our customers and customers' customer, who are mainly the cloud service providers, continue to provide us with very strong signal and positive outlook." [[cite:S40]]
TSMC raised its full-year 2026 revenue growth guidance to slightly above 40% year-over-year in USD terms, reflecting AI-driven demand. [[cite:S40]] The company also announced an additional $100 billion investment in Arizona, bringing total planned U.S. investment to $165 billion, to build several more semiconductor logical wafer fabs for 2nm and below technologies. [[cite:S40]]
ASML's EUV backlog continues to grow. For 2027, ASML is close to being fully covered with orders for Low-NA EUV and plans to increase Low-NA EUV capacity by approximately 30%. For 2028, the company has already received a significant number of Low-NA EUV orders and is investigating a further 30% capacity increase. [[cite:S73]]
On the equipment side, ASML expects advanced logic foundry-related net system sales to grow over 25% in 2026, while memory-related sales are forecast to grow over 75%. [[cite:S72]] EUV net system sales are expected to grow over 45% year-over-year, with approximately 65 Low-NA EUV systems to be shipped in 2026. [[cite:S73]]
Agentic AI is creating additional demand for both companies. Dr. Wei noted on the Q2 call: "The emergence of agentic AI is leading to a resurgence in the role of CPUs in AI data centers, which drives more silicon demand in addition to AI accelerators. We believe this is positive for TSMC, as no matter what CPU approach is taken, whether it's x86, Arm-based, or RISC-V architecture, they are almost all TSMC's customers." [[cite:S40]]
Capital Allocation: Investing for Growth
Both companies are investing heavily to support AI-driven demand.
TSMC raised its full-year 2026 capital budget to $60-64 billion, up from prior guidance. [[cite:S39]] The company stated: "A higher level of capital expenditures is always correlated to higher growth opportunities in the following years." [[cite:S39]] Approximately 70-80% of 2026 CapEx will be allocated for advanced process technologies.
ASML's free cash flow in Q2 2026 was EUR 1.3 billion. [[cite:S69]] The company is purchasing approximately EUR 1.1 billion worth of shares per quarter under its 2026-2028 buyback program, while also paying dividends (EUR 7.50 per share for full-year 2025, with the first 2026 interim dividend of EUR 1.88 payable August 5, 2026).
TSMC is committed to sustainable and increasing cash dividends. The company paid TWD 18 cash dividend per share in 2025, up 28.6% year-over-year, and will receive TWD 24 per share in 2026, up 33% year-over-year. [[cite:S39]]
Bottom Line: ASML vs TSMC
ASML and TSMC represent two compelling but different investment cases in the semiconductor space.
Choose TSMC if you want:
- Larger absolute scale and market cap ($2.1T vs $626B)
- Superior profit margins (47% vs 30% net margin)
- Direct exposure to AI chip manufacturing volume
- Stronger pricing power as the leading foundry
- Better valuation metrics on a growth basis
Choose ASML if you want:
- A unique monopoly position in EUV lithography
- Recurring installed base services revenue
- Exposure to both logic and memory CapEx cycles
- Lower absolute entry point ($1,625 vs $404 per share)
- Potential for High-NA EUV to drive next growth wave
The symbiotic case: Many semiconductor-focused investors hold positions in both. ASML benefits when TSMC expands capacity, and TSMC depends on ASML's equipment to manufacture leading-edge chips. The AI infrastructure buildout is creating demand that benefits both companies simultaneously.
For many investors, holding positions in both provides diversified exposure to the AI semiconductor supply chain while hedging against execution risk at either company. TSMC's scale and margins make it the dominant force in chip manufacturing, while ASML's monopoly in lithography equipment provides unique exposure to every advanced chip produced worldwide.
Monitor both companies through Vantafin's ASML profile and TSM profile for real-time quotes, earnings data, and filing alerts.