In the technology-dominant world, microchips have become key parts of innovation, fueling advances in AI, robotics, IoT, and more. When we delve into the world of chip manufacturing, there’s one name that stands out due to its uniqueness and unparalleled contribution—ASML. This company has hit 21 billion USD in revenue by creating merely 345 specialized units!
Unique Position in Tech Landscape
ASML, operating out of Veldhoven, the Netherlands, is a colossal figure in the global chip supply chain. The company enjoys a singular position as the only manufacturer of groundbreaking EUV lithography machines. These machines are important in the production of the world’s most unique microchips.
These machines are responsible for creating the advanced chips that find their home in various technology products. It could be from everyday gadgets like smartphones and laptops to more complex devices like medical equipment and data centers. They are the unsung heroes that power innovations in several emerging technologies including AI, robotics, and the Internet of Things.
Financial Trajectory & Market Demand
In the fourth quarter of 2022, ASML witnessed a formidable 29% increase in net sales. It clocks in at €6.4 billion ($7 billion), with the annual net sales reaching a significant $21.1 billion—a 13% YoY rise. A more fascinating piece of the puzzle is the 6 billion USD profit. It is generated from the sale of just 345 machines!
ASML’s technology is experiencing unprecedented demand. Especially amid a global chip shortage that’s brought the tech industry to its knees. This increased demand for ASML’s unique EUV technology has catapulted the company’s stock price to new heights. It has risen by over 340% since the end of 2018. That surpassed the market value of some of its major clients, including Intel.
Specialized and Exclusive Production
Each EUV lithography machine produced by ASML comes with a hefty price tag of up to $200 million. The expected cost of its next machine, termed ‘High NA’, is set to exceed $300 million. What’s exceptional is that ASML sells these highly specialized machines to only five chipmakers. The three major ones—Taiwan Semiconductor Manufacturing Co., Samsung, and Intel contributed to nearly 84% of its business in 2021.
EUV Lithography: The Heart of Innovation
EUV, or extreme ultraviolet lithography, is a revolutionary technology that employs extremely short-wavelength light. The light imprints complex designs on microchips. It’s the hidden gem that supports the production of leading-edge chips foundational to the increase of several developing technologies.
ASML’s dominance in this specialized sector is not age-old. However, it is a phenomenon that came forth over the last decade powered mainly by significant investments from Intel, Samsung, and TSMC. This uniqueness and exclusivity of technology and clientele show the key and secure role ASML plays in the semiconductor industry.
Prolific Impact & The Road Ahead
The demand surge for ASML’s technologies paints a clear picture of its huge impact on the tech industry. The company’s portfolio is not just limited to consumer electronics. The chips produced via ASML’s machines are crucial parts of medical equipment, weapons, and a variety of other domains. They show their vast reach and influence in modern technological developments.
The important aspect of ASML’s journey is its incredible order increase. The company experienced the highest quarterly level of orders in its history in the second quarter of 2022. The orders rushed to $8.39 billion (€8.46 billion), a significant leap from $2.76 billion during the same quarter in 2019.
ASML is not just a company. It’s a technological marvel redefining the limits of chip manufacturing. With its incredible and advanced EUV lithography machines, ASML is shaping the future of technology. It is marking its territory in the constantly growing tech industry.
Its distinctive position, coupled with unparalleled financial growth increases market demand.