Nvidia asked TSMC to make memory. TSMC said no, and the answer runs through ASML's order book
The world's largest chipmaker publicly refused Nvidia's request to plan 3D DRAM production, leaving memory density to Samsung, SK hynix and Micron. Those three buy their lithography from one company, ASML, whose 2027 and 2028 output is already spoken for.
Vincent Jiangfour-minute read
Nvidia asked its foundry for memory. The foundry said no
Nvidia+3.65% — Nvidia, up 3.65 percent today designs the accelerators inside most AI data centers, and it cannot get the memory it needs to ship them. On November 6, The Information reported that TSMC+7.02% — TSMC, up 7.02 percent today, the Taiwanese contract manufacturer that makes Nvidia's chips, had begun drawing up plans to produce 3D DRAM, a next-generation memory that stacks memory cells vertically to fit more storage on each wafer, at Nvidia's request 1. TSMC's US-listed shares rose 7.7% in early Friday trading as investors priced in a fourth leg to the business 2.
The door shut within a day. "TSMC focuses on our core business at all times, which is dedicated IC foundry," a spokesperson told Tom's Hardware on November 7, and the company did not address Nvidia's request at all 34. The plans under review had been sized accordingly: build dedicated memory fabs, or buy an existing plant and convert it, the route Micron+5.30% — Micron, up 5.30 percent today took in March when it agreed to pay $1.8 billion for a Taiwan fab from Powerchip to adapt for memory output 1.
The AI bottleneck moved from the GPU to the memory beside it
The shortage numbers explain why Nvidia made the ask. SK hynix+2.95% — SK hynix, up 2.95 percent today is sold out through 2029 and Samsung through 2027, and the three memory incumbents now post gross margins above 75% 5. Apple−0.45% — Apple, down 0.45 percent today, the most disciplined supply chain in the business, has raised device prices this year to pass on its own memory bill 5. A TSMC memory business would have added the first credible fourth DRAM supplier in a generation. The refusal keeps the scarcest input in AI hardware in three pairs of hands.
The refusal is a capex decision, and the capex lands on ASML
Memory makers add DRAM density by printing finer cells, and the machines that print them come from one company. Micron's October roadmap, detailed by Tom's Hardware, is built on high-NA EUV lithography, a new DRAM node to be made in the United States, and an 11th-generation NAND chip above 400 layers 6. High-NA EUV exists at exactly one supplier, ASML+5.10% — ASML, up 5.10 percent today of the Netherlands, which sells those machines for roughly $400 million apiece, as The Inference reported in October (/article/samsung-intel-and-tsmc-promised-asml-s-400m-machine-work-none-promised-a-count) 6. ASML's own quarter shows what the queue behind that refusal looks like.
Third-quarter net sales hit a record €11.7 billion with a 57.5% gross margin and €5.0 billion net income, and CEO Christophe Fouquet said planned supply for 2027 and 2028 "will not fully meet the demand of our customers", some of whom are now asking for delivery slots in 2029 and 2030; ASML is investigating capacity beyond the 30% increase it had already promised across 2027 and 2028 78.
ASML's quarterly revenue jumped 51% year on year in Q3 2026
ASML says planned supply for 2027 and 2028 will not fully meet demand
- Revenue
- Net income
Data
| Revenue | Net income | |
|---|---|---|
| Q2 '24 | $6.71B | $1.7B |
| Q3 '24 | $8.3B | $2.31B |
| Q4 '24 | $9.64B | $2.8B |
| Q1 '25 | $8.38B | $2.55B |
| Q2 '25 | $9.02B | $2.69B |
| Q3 '25 | $8.8B | $2.49B |
| Q4 '25 | $11.42B | $3.34B |
| Q1 '26 | $10.08B | $3.17B |
| Q2 '26 | $10.62B | $3.32B |
| Q3 '26 | $13.27B | $5.64B |
ASML's queue is the memory makers' capex now
Agreed price increases become visible in 2027 and take full effect in 2028 8. TSMC's refusal creates none of those orders. It removes the one scenario in which part of the memory capex bypasses the queue. Every DRAM layer Samsung, SK hynix and Micron add is a machine ASML does not have to chase.
The skeptics have the better history, not the better shortage
The denial is probably what it says. Tom's Hardware notes TSMC lacks a competitive planar DRAM process, and that 3D DRAM is years away even for Micron, Samsung and SK hynix, so it cannot relieve this shortage for at least five years 3.
Winbond chairman Chao Yu-chun called in-house DRAM unlikely, citing patent thickets and the advanced-packaging work TSMC already does with Samsung and Winbond 9. Memory is brutally cyclical, and the HBM base-die partnership TSMC signed with SK hynix in 2024 would turn into competition the day TSMC poured its own DRAM 3.
Washington is the live risk on the other side of the trade. The proposed MATCH Act could restrict some DUV system sales to China, and the US-China trade truce expires on January 10, 2027 8. China's DRAM champion, CXMT, has reached about 10% of global DRAM output, and it cannot buy ASML's tools at all 5. The cap sits on Beijing's roadmap, not on Veldhoven's order book.
Three dates decide the next chapter
The first is January 10, 2027, when the truce expires and the MATCH Act either lands or fades 8. The second is ASML's fourth-quarter report, guided at €14.2 billion to €15.2 billion in net sales 7.
The third is whether TSMC's "always" holds when Nvidia's volume commitments arrive in writing, the form any deal of this size would likely take 5. TSMC left memory once before, in 2008, the mirror image of Intel's+8.51% — Intel, up 8.51 percent today 1985 exit from the same business 5. TSMC can refuse the money. Memory still has to get made, and the machines that make it come from one address.
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