Dutch semiconductor manufacturing equipment maker ASML rose above a $500 billion (£374bn) market value on Thursday, after top customer TSMC announced larger-than-expected capital expenditure plans to expand production for AI chips.

The landmark expands ASML’s lead as Europe’s most valuable company, and makes it only the third European company to surpass the milestone.

Intel manufacturing worker displays test system-on-chip built on a glass substrate. Image credit: Intel AI boom

Luxury goods conglomerate LVMH and Danish drugmaker Novo Nordisk previously have been valued at over half a trillion dollars.

ASML’s shares rose as much as 7.6 percent in Amsterdam trading on Thursday, extending a gain of 24 percent so far this year.

Taiwan’s TSMC, the world’s largest contract chipmaker, raised its expected capital expenditures for 2026 to between $52bn and $56bn, much higher than market expectations of $46bn, according to analysts.

Chip manufacturing

ASML has so far forecast only slight growth or flat sales for 2026, indicating the relatively slow rate of construction of chip plants compared to the demand for chips.

That demand is principally driven by the specialised AI processors used in data centres driving generative AI tools such as ChatGPT or Google’s Gemini.

Relentless demand for such chips has pushed up memory prices, in turn leading to increases for consumer electronics such as mobile phones.