While the semiconductor industry continues to grow amid the artificial intelligence boom, the reporting of equipment suppliers is now setting the tone for the entire chain.
The world’s largest manufacturer of lithographic scanners, ASML, recorded quarterly revenue of €8.8 billion (+13% YoY) and a net profit of €2.8 billion (+17%), exceeding market expectations. The company also lifted its full-year forecast to €36-40 billion, explicitly stating that investments in AI infrastructure remain the main driver. More importantly, it emphasized that demand for its equipment already exceeds supply, signaling that the restrictions are structural rather than cyclical.
This shortage begins to be transmitted down the chain. TSMC, the largest contract chip manufacturer serving some of the leading companies on the stock screener, is showing impressive financial results, with quarterly revenue increasing by 35% to $35.6 billion, and net profit jumping by 58% to an unprecedented $18 billion. This marks the fourth consecutive quarter of record profits. Margins have risen to 66.2%, reflecting rising prices amid capacity shortages.
However, even with these indicators, it is becoming evident that further acceleration is constrained by the industry’s physical limitations. TSMC is operating at peak utilization, with capital expenditures potentially reaching $52-56 billion this year. At the same time, bottlenecks are no longer limited to wafer production but also extend to the testing and packaging stages, becoming a structural barrier for the entire sector.
The demand structure is also changing. The high-performance computing (HPC) segment, directly tied to AI, already accounts for 61% of TSMC’s revenue and continues to grow, while smartphones are in decline, with their share falling to 26%. This reflects a broader reallocation of resources, with rising memory and component prices increasingly constraining the consumer market in favor of AI infrastructure.
ASML reporting confirms this shift. The share of revenue from memory manufacturers rose to 51% from 30% a quarter earlier. In fact, the AI boom is spreading to the entire ecosystem, from advanced EUV scanners to more mature technological processes that remain in high demand.
The geography of the business has become an additional risk factor. The decline in China’s share of ASML’s revenue from 36% to 19% in several quarters highlights the impact of sanctions and regulatory restrictions, while dependence on South Korea, where the largest memory manufacturers are concentrated, is intensifying.
From a financial perspective, this creates an ambiguous picture. While companies are demonstrating record revenues and margins, the market is beginning to take into account growth constraints. This explains why even strong reports may fail to bring ASML and TSMC shares to market movers or premarket gainers lists; a significant portion of positive expectations is already priced into valuations.
As a result, investors are increasingly looking not only at revenue growth rates, but also at companies’ ability to scale production in conditions of equipment, energy, and infrastructure shortages. And if the current dynamics continue, it is supply constraints — not demand — that will become the main factor determining the financial results of the semiconductor sector in the coming years.
