Semiconductors are some of the most sought-after commodities of the 21st century. Now, companies like ASML manufacture machines that make semiconductors, but the limelight hasn’t really hit them yet, as it should have. ASML manufacturers only 40 Extreme Ultraviolet Lithography machines, or EUVs, per calendar year and yet has a monopoly on the market.
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EUVs are known to facilitate the printing of miniscule circuits on silicon wafers. If you give it enough thought, electronics giants like Samsung, TSMC and Intel need the infrastructure and hardware to manufacture their chipsets and unsurprisingly, they are ASML’s biggest clients and stakeholders. Samsung, TSMC, and Intel had acquired a 23% stake in ASML due to their massive dependence on EUV technology.
It is indeed shocking that only 40 EUV machines are made per year, each machine weighs upwards of 180 tons, shipping a disassembled EUV requires 40 containers, 20 trucks and 3 Boeing 747s. Also, organizations need a minimum of $1B to store an EUV. Despite the immense effort it takes to put out these machines, ASML could only manufacture 140 EUVs until 2021, making up 90% of the light lithography industry. This technological monopoly has allowed ASML to be at an estimated full-decade ahead of their competition.
We have seen the effects of the recent semiconductor shortage that has plagued the world for a while now. Essentials like SOCs, chipsets for automobiles, datacenters and even leisure products like the new generation of gaming consoles like the PlayStation 5 and the Xbox Series X have been in very short supply, owing to the limited semiconductor production.
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In the grand scheme of things, it is both interesting and alarming to understand that the things we utilize in our daily lives – cars, phones, computers and even medical equipment – all depend on the optimal functioning of a company. ASML is currently worth $220B, roughly 27 years after it went public in 1995. It must be noted that ASML acquired the EUV license in 1999, while companies like Canon and Nikon paved an alternate path.
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