🔬 ASML: Advanced Chip Monopoly
Europe's tech giant makes the world's most complex machines
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Last Friday, I asked you to vote for the topic of the next issue.
🇳🇱 ASML was your #1 choice, so we dive into the Dutch giant today.
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If you are a regular reader of this newsletter, you already know ASML is one of the largest European companies and a crucial cog in the global semiconductor machine.
We have already covered ASML in two recent reports:
In 🇪🇺 12 European Giants Visualized, we review Europe's leading companies, from biotech rising star Novo Nordisk to LVMH’s luxury empire.
In ⚙️ Semiconductor Titans Visualized, we look at the semiconductor industry map, where ASML is a key equipment provider for foundries and IDMs (Integrated Device Manufacturers).
Let's explore ASML deeper and unpack the metrics to pay attention to.
Today at a glance:
What is EUV?
ASML FY23 overview.
Backlog and market outlook.
Key quotes from the earnings call.
The (very) long list of risks facing ASML.
1. What is EUV?
If you're using a modern smartphone, the latest gaming console, or a smartwatch, chances are you're directly benefiting from EUV (extreme ultraviolet) lithography technology. This advanced process is at the core of semiconductor manufacturing and is crucial for powering today’s high-tech devices.
Microchip Evolution: Each new generation of chips, known as a node, involves cramming billions of tiny transistors together. In short, smaller nodes indicate more advanced technology. This miniaturization leads to more powerful, faster, and energy-efficient chips.
Technology in Daily Life: Chips made with EUV lithography are the driving force behind smart technology in cars, phones, homes, augmented reality, and artificial intelligence.
Scaling and Affordability: EUV lithography enhances the scalability of chip production, making it more cost-effective. This advancement has been critical to sustaining Moore’s Law in the semiconductor industry, which predicts the doubling of transistors on a chip approximately every two years.
EUV and DUV Systems: ASML is the only provider of EUV lithography machines. While EUV systems are vital for printing the most intricate chip layers, DUV (deep ultraviolet) systems remain essential for other layers. Both technologies are crucial and will continue to advance in tandem to meet the evolving demands of our digital era.
🌌 ASML's Pioneering EUV Technology
🔑 Unique Tech: ASML's use of EUV light, akin to a precision scalpel in chip design, helps reduce the likelihood of defects.
🛸 EUV Origin: These special wavelengths, usually found in outer space, enable finer chip imprinting than traditional DUV light.