ASML Holding N.V. (ASML)

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#1
Chip machine maker ASML will grow into a $500 billion business next year, tech investors predict
* ASML provides chip makers with essential hardware, software and services to mass produce patterns on silicon using a method called lithography.
* It is the only company in the world offering extreme ultraviolet lithography machines that the likes of TSMC need to make the smallest and most sophisticated chips.
* Each EUV machine has over 100,000 parts and costs $150 million.
* They’re shipped in 40 freight containers or four jumbo jets.

Sam Shead
PUBLISHED TUE, OCT 12 20213:02 AM EDT

LONDON – ASML, a Dutch firm that makes high-tech machines used in semiconductor manufacturing, will see its market value climb from $302 billion to more than $500 billion next year, according to two tech investors.

Nathan Benaich, founder and general partner of boutique VC firm Air Street Capital, and Ian Hogarth, who sold his AI start-up Songkick to Warner Music Group, wrote in their annual “State of AI” report Tuesday that Europe’s largest tech company is the little-known “linchpin” in the global semiconductor industry.

Founded in 1984, ASML provides chip makers with essential hardware, software and services to mass produce patterns on silicon using a method called lithography.

It is the only company in the world offering extreme ultraviolet lithography machines that the likes of TSMC need to make the smallest and most sophisticated chips.

Each EUV machine has over 100,000 parts and costs $150 million. They’re shipped in 40 freight containers or four jumbo jets.

Closing the gap

Several chip companies have seen their stock prices soar after the coronavirus pandemic led to a global chip shortage, but ASML’s share price still has some room to grow, Hogarth told CNBC.

He said ASML’s market cap isn’t on the same scale as the likes of Nvidia or TSMC because it’s in Europe, where the market values high-tech firms slightly lower, and because its technology is more behind the scenes.

Nvidia is currently valued at $521 billion, while TSMC’s valued at $533 billion.

More details in https://www.cnbc.com/2021/10/12/chip-mac...iness.html
Specuvestor: Asset - Business - Structure.
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#2
ASML is one of the well-known "pseudo-monopoly" companies in the Semi space:
[Image: twsLu7M.png]
Source: https://lillianli.substack.com/p/china-s...e-push-de2

Such pseudo-monopolies exist in many other industries, but seems quite commonplace in various parts of the Semi supply-chain (design software, fabrication, manufacturing equipment, testing equipment etc.).

That said, right now ASML is trading close to all-time high multiple in terms of trailing PS and PE ratio, while their products (EUV equipment) seems to be at the height of the demand cycle (not an industry expert).

One can do worse, but is now it really the best time to invest? IMO, still a great pick (together with TSMC), if you want long-term exposure to an important, secular growth industry.

(not vested; ex-investor in TSMC)
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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