CORRECTED-UPDATE 2-TSMC says can make next generation chips without ASML's new machine

(Corrects paragraph 1 to show that A16 node is due in late 2026, not 2027)

By Toby Sterling

AMSTERDAM, May 14 (Reuters) - Taiwanese chipmaker TSMC does not necessarily need to use ASML's next generation "High NA EUV" machines for an upcoming generation of chip manufacturing technology called A16, which is under development for the second half of 2026, an executive said on Tuesday.

The High NA lithography tools are expected to help shrink chip designs by up to two-thirds, but chipmakers must weigh that benefit against a higher cost and whether ASML's older tech may be more reliable and good enough.

Speaking at a conference in Amsterdam, Kevin Zhang said that it is possible that the company's A16 plants could be designed to accommodate the technology, but that is not certain. TSMC, the world's biggest contract chipmaker, is the largest user of ASML's regular EUV machines.

"I like the technology but I don't like the sticker price", Zhang told reporters. TSMC's A16 node will follow its 2 nanometer production node, which is expected to enter mass production in 2025.

"When actually High NA EUV will come in play, I think it depends on where's the optimum economic and the technical balancing we can achieve," he said.

High NA tools are expected to cost more than 350 million euros ($378 million) each, from 200 million euros from ASML's regular EUV machines.

ASML, Europe's largest tech firm, dominates the market for lithography systems, machines that use beams of light to help create the circuitry of chips.

Lithography is one of many technologies chipmakers use to improve chips, but it is a limiting factor in how small the features on a chip can be - smaller means faster and more energy efficient.

Intel last month said it had become the first company to assemble one of ASML's new High NA EUV lithography tools, as an important part of the U.S. computer chip maker's drive to outshine rivals.

($1 = 0.9262 euros)

(Reporting by Toby Sterling, editing by Bart Meijer and Emelia Sithoel-Matarise)