Chinese semiconductor industry
- Thread starter Hendrik_2000
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Very good article, well done.
Indeed, ASML is definitely overpriced (not the least in that its pricing assumes that its near monopoly over EUVL high performance DUVL will hold for at least the next decade)
Not true. Even if the chip was done at 7nm or even 10nm it would be better than what they could get from Intel. The M series chips are architecturally superior designs. It’s not just a function of transistor size.
Finally a good article. This is what I want to hear, a real "progress". Not just talk but no action. I hope all Chinese fab will use and support SMEE duv to produce 7nm. Boycott ASML DUV or Canon.
@Annihilation98 sorry I don't want to be rude but just to remind you, you're the one who talks a lot but is not open minded to accept that the Chinese are actually doing something. Bro being critical is good cause we all want to know the truth but as human being we had the insight to discern. peace bro!
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Thank you. And all comments impress me with their depth of thinking.That was an excellent article.
There are no simple answers, not with tech.
People who seem upset, maybe wanted a simple answer, or wanted to hear something they want to hear.
Can't please everybody.
The article is quite informative. I did not know that DUV tools still made almost half of the revenues of ASML. Considering most of the growth in DUV is in China, at least until the recently announced initiatives to boost the manufacturing chain in Europe, Japan, etc. This explains why ASML leadership is so concerned about a possible embargo on sales of DUV equipment capable of 14nm and under to China as proposed by that US AI comission. If the sanctions do happen it will mean losses in sales with SMEE getting those clients.
That would be a huge loss in sales and it would mean SMEE would get more entrenched into Chinese semi manufacturing facilities and get more capital to speed up future adoption of EUV as well. We know there are at least two Chinese manufacturers of lithography equipment working on both 28nm immersion lithography and EUV. SMEE being the commercial one and the Chinese Academy of Sciences Institute of Optics and Electronics being the government one. Expecting ASML to hold on to its monopoly position long term might be a foolish proposition if we consider what happened in the 1980-1990s where the whole market switched in less than a decade to a dominance by Nikon and Canon dethroning the US lithography vendors. If China plays things properly the same thing could happen again. Right now ASML's lead in EUV seems unassailable but given the huge cost of these machines if someone could deliver a better value proposition than they I think they would lose the market fairly quickly just like what happened back then.
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One main reason these comments are hostile is the readers think I am a bank analyst and can make the stock go up or down based on my article. So since the article was neutral to ASML, they thought by putting down my analysis, their comment would move the stock price up. I am not a stock analyst. I do market research since 1985 through my company, and I write these articles as a calling card to introduce my reports and my capabilities. Other market research companies out there, which sprang up in the past 10 years, are coming from India and reports are sold by tables of contents, and they have not gone over well with customers.
You are correct on lead times and customized parts, but ASML has a habit of backlogs, which were 75 EUVs in 2Q and averaged 45 EUVs each quarter for 15 quarters. And that's why I point out this history that it is not just this quarter, and since there are also so many misses in earnings or revenues in Table 1, ASML has supply chain management problems.
Finally on the Tesla analogy, the thing I was pointing out is that Musk experienced microcontroller shortages and did something about it by getting alternative sources so the shortage didn't impact Tesla shipments.
Interesting about your comment on China, because I have said in 2 articles on ASML that management does not speak of China. You're right it is a deep concern for them. In Q2, ASML only had 17% of its revenues from China versus 37% for Lam Research and 50% for Tokyo Electron. The 17% was impacted by sanctions on EUV. If there were sanctions on DUV it would probably drop to 5%. When SMEE ramps up, I think it would be the same thing as DUV sanctions. SMEE needs to get its overlay accuracy comparable to ASML so SMIC could get to 7nm (from 28nm) with multiple patterning. China represents 29% of all equipment sold in Q2, so it is significant.
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