Nikon to Undercut ASML in Chip Tool Pricing, Seeks Market Share
11h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
semiconductorchip-equipment
Fazen Markets Editorial Desk
Collective editorial team · methodology
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A report on 29 May 2026 states that Nikon Corporation will price its next-generation lithography equipment at a level below that of industry leader ASML Holding NV. The pricing strategy directly targets the advanced semiconductor manufacturing market where ASML currently holds a technological and supply chain monopoly exceeding 80% share in extreme ultraviolet (EUV) systems. This pricing move is a pivotal part of Nikon's strategy to capture meaningful market share in a segment projected to reach $17.5 billion annually by 2026. It signals a renewed competitive dynamic in the semiconductor capital equipment sector after years of ASML dominance.
The last major pricing challenge to ASML's position occurred when Canon attempted to market its nanoimprint lithography systems in 2023, but that technology failed to gain significant adoption at leading-edge nodes. The current macro backdrop features elevated demand for AI-driven logic chips and a global push for diversified supply chains, increasing capital expenditure budgets at major foundries. The catalyst for Nikon's aggressive move is the maturation of its own multi-beam mask writer and high-NA lithography research, coupled with geopolitical pressure from governments in the United States, Japan, and Europe to reduce single-source dependency. A 2025 Japanese government subsidy of $2.3 billion for domestic semiconductor equipment development provided direct financial support for Nikon's R&D acceleration. The window of opportunity opened as foundry customers like TSMC and Intel seek cost-effective alternatives for mature and trailing-edge node capacity expansion.
ASML's benchmark EUV system, the Twinscan NXE:3600D, carries a list price of approximately $180 million per unit, with a quarterly output of around 20 systems. Nikon's anticipated pricing will position its comparable tool in a range 15-25% lower, targeting an entry point near $145 million. The total chip lithography equipment market was valued at $14.8 billion in 2024, with ASML commanding a 62% revenue share across all segments and over 90% in EUV specifically. In 2024, Nikon held a 9.3% market share in lithography, primarily in older i-line and KrF systems. The market for ArF immersion and EUV tools, where the new competition will occur, is projected for a compound annual growth rate (CAGR) of 7.8% through 2028. ASML's order backlog stood at €38 billion as of its Q1 2026 report, indicating strong latent demand that competitors could potentially tap.
| Metric | ASML (Current) | Nikon (Projected Entry) |
|---|---|---|
| EUV System Price | ~$180M | ~$145M (est.) |
| 2024 Lithography Market Share | 62% | 9.3% |
| Target Customer Node | <3nm to 7nm | 5nm to 28nm (initial) |
The direct second-order effect is potential margin compression for ASML. A 20% price undercut on even 10% of its EUV shipment volume could pressure its operating margin, which stood at 32.7% in 2025. Beneficiaries include foundry operators like TSMC (2330.TW), Samsung Electronics (005930.KS), and Intel (INTC), which could see reduced capital expenditure intensity per wafer start, improving free cash flow projections by 2-4% over a multi-year equipment cycle. Equipment component suppliers with multi-client exposure, such as Lasertec (6920.T) for mask inspection and Zeiss (not publicly traded) for optics, may see increased order volume but also face pricing pressure from both OEMs. The key counter-argument is that price alone does not unseat ASML, as its tools offer superior throughput and uptime, creating a total cost of ownership (TCO) advantage that may outweigh Nikon's initial sticker price discount. Current positioning shows hedge funds have increased short interest in ASML by 18% over the last quarter, while long-only funds are scrutinizing Nikon's ability to execute on technology and service commitments. Flow data indicates early rotation into the iShares Semiconductor ETF (SOXX) on the thesis of broader capex efficiency.
The primary catalyst is Nikon's formal product announcement and technical specifications disclosure, expected at SEMICON Japan in December 2026. The first tool evaluations by a Tier 1 foundry customer, likely TSMC or Rapidus, will provide a critical validation point in Q2 2027. Investors should monitor ASML's quarterly earnings calls for any mention of pricing elasticity or changes in order book composition. Key levels to watch include ASML's stock support around the €650 level, a 23% retracement from its 2025 highs, and Nikon's resistance at the ¥1,800 mark, which it has not sustained since 2007. If Nikon secures a double-digit order commitment from a major foundry by mid-2027, it would confirm the strategy's initial viability and likely trigger a re-rating of its equipment segment valuation multiples.
Retail investors holding broad semiconductor ETFs like SOXX or SMH may see muted direct impact, as ASML's weight is offset by foundry and chip designer holdings that benefit from lower equipment costs. The effect is more pronounced for thematic equipment ETFs, where the competitive shift could introduce volatility. The longer-term implication is that increased competition may accelerate innovation cycles and potentially expand the total addressable market for advanced chipmaking, a net positive for the sector's growth trajectory beyond the current duopoly dynamics.
Historical precedents include Applied Materials' challenge to Tokyo Electron in the etch segment in the early 2000s and ASML's own takeover of the scanner market from Nikon and Canon in the 2010s. Those shifts were driven by technological leapfrogging, not price leadership. Nikon's current strategy more closely resembles Samsung's successful price-based market share grabs in memory chips, applying a manufacturing scale and cost tactic to a high-margin, R&D-intensive field. The risk is that the equipment industry has historically favored technology performance over cost, making this an unproven approach at the leading edge.
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