I am amused by the ease with which the market has been dismissing ASML going back to November 2021. Off >20% over 60 days, in fits and spurts.
Perhaps it’s the name? Formerly, the totally unsexy name of “Advanced Semiconductor Materials Lithography Holding N.V.” Now: ASML Holding N.V.
They are apparently the sole makers of the most advanced machines used by folks like Apple, Intel, Taiwan Semi foundry, et al for manufacturing the latest high density and most demanding chip technology.
It is amusing that today’s ‘astute investors’, against the backdrop of the current severe semiconductor shortage, seem to be so ready to abandon holdings in the company. The company has no problem with profitability and their order backlog.
(ASML is a key [~~10%] holding here, but not a majority, of the BB port.)
There are several articles at CNBC; one from 2 months ago gives a useful synoptic overview.
NOV 2021 CNBC News article:
Investors are going wild over a Dutch chip firm. And you’ve probably never heard of it
https://www.cnbc.com/2021/11/24/asml-the-biggest-company-in-…
More at CNBC web page:
https://www.cnbc.com/quotes/ASML?qsearchterm=asml
ASML Web Site:
https://www.asml.com/en
Wiki article:
https://en.wikipedia.org/wiki/ASML_Holding
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Brerbear,
That is a good play. One that is not so mature would be the same kind of company that builds machines to make batteries.
Even though the technology for batteries is changing fast, the technology of building them is changing more slowly. If you assumed, incorrectly, that the demand, an thus the demand for capacity, for batteries would remain linear, we need many, many battery factories.
All of them will need machines and right now since demand outstrips supply and it appears that it will remain so far into the future, margins will remain high throughout the supply chain.
Cheers
Qazulight
Is this the current “in” thing? We old phartz remember the hype over Kulicke & Soffa and their “turbo ball bonder”.
Steve
Is this the current “in” thing? We old phartz remember the hype over Kulicke & Soffa and their “turbo ball bonder”.
Steve
Well, as far as I can tell, the Kulicke folks fall into the packaging end (along with some additional peripheral biz), where ASML is in the lithography side of the biz. (The part where extremely dense designs are photo exposed on the wafer for etching.) I don’t think ASML has a toe in any part of packaging.
Kulicke has a couple of compets in the packaging biz. From what I have read, ASML, for today, with their EUV (extreme ultraviolet lithography) machines, is in a league all to their own.
They are apparently the sole makers of the most advanced machines used by folks like Apple, Intel, Taiwan Semi foundry, et al for manufacturing the latest high density and most demanding chip technology.
Just a nit…Apple is an indirect user…Apple doesn’t make any chips, they are all outsourced, mostly (all?) to TSMC.
ASML is the only company that makes EUV lithography machines. These EUV machines are used in the most advanced chip making processes. Thus a very critical company in the supply pipeline for every product that relies on the most advanced tech.
EUV (extreme ultraviolet) lithography is used in 7nm and smaller process nodes for making chips.
It is amusing that today’s ‘astute investors’, against the backdrop of the current severe semiconductor shortage, seem to be so ready to abandon holdings in the company. The company has no problem with profitability and their order backlog.
A lot of the semi shortage is for older products, especially in cars (those using 10nm, 14nm and even 40nm – which is 10-15 years old). Much of this equipment is bought and sold used as the top tier FAB companies upgrade to newer tech. There are several companies that make semi-making equipment and equipment from several companies might be in any given FAB since it takes dozens of steps to process just one chip wafer.
Mike
2 Likes
Just a nit…Apple is an indirect user…Apple doesn’t make any chips, they are all outsourced, mostly (all?) to TSMC.
Mike
Mike, you’re right, of course… I just assumed that most folks knew that. Nvidia is another major ‘non-fab’er’. Another is AMD. NVDA uses TSMC, almost exclusively. There are several more who are TSMC clients.
Worldwide #1, TSMC pretty much started the fab house biz ~~~40 years ago, for folks who wanted to outsource the task. Intel recently said that they intended to outsource fabbing, and since has made moves on the house that was spun out of AMD when they got rid of their fab.