Here is a great YouTube about ASML. ASML is important for chipset production, especially the most advanced chipsets. Because IoT and many (most?) conveniences rely on chipsets, ASML is METAR?
Why The World Relies On ASML For Machines That Print Chips
https://youtu.be/iSVHp6CAyQ8
ASML has a monopoly on EUV - Extreme UV - lithography, the process for producing the most advanced (smallest form factor, highest density) chipsets.
TSMC uses ASML EUV machines. Intel and Samsung are trying to catch up to TSMC.
https://finance.yahoo.com/quote/ASML/profile?p=ASML
ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.
While it’s a Dutch company, there are a couple ASML factories in the US, and some labs in Asia.
The YouTube linked above, mentions geopolitics, as in the West prohibits the sale of the advanced machines to China, and the need for foundries in the EU and US.
IMO, China is NOT sitting back, allowing the West to dictate.
A couple of the comments mention Huawei as researching advanced lithography chipset printing technologies.
ralph
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CNBC had a detailed article on ASML today–
https://www.cnbc.com/2022/03/23/inside-asml-the-company-adva…
Article explains why ASML is the leader in fine line chips.
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ASML is a key holding in the port here. (~~~10%)
I looked for order back log data to no avail. I would guess it’s more than 12 months.
They have a technology moat that would take a potential competitor years to breach.
Achilles heel (potentially): Their top two customers account for over 60% of their revenue. They don’t identify #1, but it almost certainly is TSMC, in the Republic of China, on the isle of Taiwan, which happens to be on CCP’s Xi’s short To Do list.
Were Xi actually able to subsume the Republic of China, who knows how badly his unwelcome monkey wrench would be the world’s chip situation. I think we’ll have some of the answers in the next 60 months or so.
TSM announced plans for building a plant in AZ. (JAN 2021)
https://azbigmedia.com/real-estate/taiwan-semiconductor-laun…
Taiwan Semiconductor launches $38B Phoenix presence by signing major lease
Achilles heel (potentially): Their top two customers account for over 60% of their revenue.
Customer concentration can be a huge problem which is the reason I prefer stock of companies that have lots of customers with no pricing power.
The Captain
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Were Xi actually able to subsume the Republic of China, who knows how badly his unwelcome monkey wrench would be the world’s chip situation. I think we’ll have some of the answers in the next 60 months or so.
No one likes uncertainty. But if (big IF) Xi were to move to take over Taiwan, it might accelerate more sales of EUV equipment to the non-TSMC competitors. Or to the TSMC locations abroad.
Mike
Customer concentration can be a huge problem which is the reason I prefer stock of companies that have lots of customers with no pricing power.
The Captain
Concur. A quite non-trivial metric.
Given the ‘product’, and the complexity of chip fab/packaging, I am laying that to the nature of the beast. The market for the ‘product’ will necessarily be narrow. Very narrow.
Given the market place that the ‘product’ is in (with chip shortages affecting all manner of commerce world wide), not the least of which are automobiles, I’m staying snug. (And watchful!)
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