Chip Giants Caught in Turmoil: ASML Stumbles, TSMC Soars Amid NVIDIA Clash

This week, the tech sector was rocked by tumultuous developments as major players like ASML, Intel, and TSMC released their earnings. ASML, the Dutch photolithography giant, reported a significant drop in orders, which plummeted to €2.6 billion from the previous quarter, causing its stock to fall sharply. The decline in orders has been linked to reduced demand from key clients like Intel. Analysts suggest that although AI chip demand, particularly for advanced memory like DDR5 and HBM, remains strong, it doesn't match the demand for EUV-dependent logic chips.

Adding to the sector's intrigue, TSMC presented a robust earnings report, with net profit exceeding $10 billion, a 54.2% annual increase. However, the Taiwanese chipmaker reportedly found itself in a conflict with its major client NVIDIA over issues related to the Blackwell chip. This disagreement is rumored to be linked to challenges encountered with TSMC's new CoWoS-L packaging technology.

Market focus is now turning towards how Blackwell will impact NVIDIA's future performance, further influencing the trajectory of the ongoing bull market in U.S. stocks, now entering its third year. The performance of tech giants during this earnings season could prove pivotal in determining market direction.

ASML's financial results highlight both growth and challenges. While the company's net sales rose to €7.47 billion, exceeding expectations, the sharp drop in orders has sparked concerns. The firm has revised its 2025 sales forecast down to between €30 billion and €35 billion, prompting fears about broader semiconductor industry weaknesses.

Intel, along with Samsung, has been identified as a significant factor behind ASML's troubles. Intel has delayed factory expansions in Germany and Poland, affecting its purchasing plans. This cautious stance is echoed by other market players, reflecting broader hesitation amid ongoing AI demand and overall market recovery.

Despite TSMC's impressive earnings, reports of internal discord with NVIDIA suggest challenges in meeting expectations related to new chip technologies. Nonetheless, demand for AI technologies continues to drive growth and stock market interest.

This week, investors are keenly observing tech earnings reports, which could offer insights into the sustainability of current market valuations. The financial results of major tech firms are anticipated to either reinforce or challenge the ongoing bull market in tech stocks, significantly impacting broader market perceptions and movements.