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The semiconductor industry is the beating heart of modern technology, and at the core of this industry lies ASML, a Dutch company. While ASML may not be a household name, it is one of the most crucial companies in semiconductor manufacturing. Let’s explore what this company does and why it plays such an essential role.
ASML specializes in producing lithography equipment used in manufacturing semiconductor wafers. Lithography is the process of etching circuit patterns onto a wafer surface, and ASML’s technology shines in this process. Particularly, ASML is the leader in extreme ultraviolet (EUV) lithography technology.
ASML holds a dominant market share in the global lithography equipment industry. As of 2023, ASML accounts for more than 90% of the total lithography equipment market. Specifically, in the field of EUV lithography equipment, ASML is practically the sole supplier. This indicates that ASML’s technology is far ahead of its competitors, solidifying its dominant position in the market.
Another important factor that underscores market confidence in ASML is the investment by global investment bank Goldman Sachs. Goldman Sachs has consistently increased its investment in ASML, and as of 2023, it holds approximately $5 billion worth of ASML shares, representing about 4% of ASML’s total shares.
Goldman Sachs views ASML’s EUV technology as a key determinant of the future of the semiconductor industry. Considering ASML’s monopolistic position in the market, Goldman Sachs believes the company has tremendous long-term growth potential. Since the early 2010s, Goldman Sachs has steadily increased its investment in ASML, significantly accelerating its shareholding since 2020 due to the rising demand for semiconductors.
ASML’s technological prowess is indispensable to semiconductor manufacturers. Global giants like Samsung, Intel, and TSMC use ASML’s equipment to produce next-generation semiconductors. In fact, without ASML’s EUV technology, it would be impossible to mass-produce the high-performance semiconductors we see today.
ASML’s technology will continue to be a key driver in the semiconductor industry. Future technologies such as AI, autonomous driving, 5G, and IoT will require increasingly higher performance semiconductors, making ASML’s role even more critical.
Furthermore, ASML is continually advancing its technology. Beyond EUV lithography, the company is researching technologies that enable even finer processing, pushing the boundaries of semiconductor performance.
The chart below shows ASML’s revenue, operating income, and net income from 2014 to 2024. The forecast for 2024 suggests that ASML will achieve revenue of €23.5 billion, operating income of €9 billion, and net income of €7.2 billion. This continued growth is driven by the ever-increasing demand in the semiconductor industry and ASML’s unrivaled technological capabilities.
Although ASML may not be well-known to the general public, its impact is enormous. ASML, a hidden giant at the heart of technological innovation, supplies the essential equipment needed by semiconductor manufacturers to adopt new technologies. Investors should closely monitor ASML’s progress, as this company’s technology will determine the speed and direction of future technological advancements.
The investment by major financial institutions like Goldman Sachs is a strong vote of confidence in ASML’s market position and future growth potential. ASML’s growth is not just about technological innovation but also represents a significant opportunity for investors.
