TSMC and ASML have announced that EUV photomasks will be enlarged from 6 inches to 12 inches, and photomask maker Gudeng hit its daily limit-up right at the open — a clear positive for the related supply chain.

• Gudeng gapped up to the limit at the open, locked at NT$573, with nearly 6,000 lots queued and unfilled within half an hour.
• TSMC will introduce ASML's High NA EUV in advanced processes starting in 2030, and will build a 12-inch photomask pilot production line before 2031.
• This is the first time TSMC has spelled out a High NA mass-production timetable, effectively opening up new orders for photomask, precision equipment and materials suppliers.
• Gudeng's revenue for the first seven months grew 29% from a year earlier, a record high.
• The share price is already at a high level, and short-term turnover and volatility risks are considerable.

Outlook: As long as monthly revenue and progress on advanced packaging carriers hold up, the bulls still have a chance to extend the run, but those chasing prices at these highs should watch for a pullback.