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ASML: Not So Dominant Without EUV

Mar. 08, 2021 9:37 PM ETASML Holding N.V. (ASML)SSNLF, TSM38 Comments


  • ASML's EUV lithography system revenues are dominating its product sector with more than 45% of revenues in 2020.
  • ASML currently counts just six companies as customers at the 7nm node and below, although EUV revenues will double for the company in 2023.
  • ASML's dominant share of immersion DUV, which is used between 10nm and 65nm nodes, has been eroding against Nikon in the past few years.
  • In 2020, 413 lithography systems of all types were sold, and only 31 were EUV, which I forecast all reach only 50 systems in 2023.
  • This idea was discussed in more depth with members of my private investing community, Semiconductor Deep Dive. Learn More »

In a recap of 2020, ASML (NASDAQ:ASML) reported significant technological and financial gains. In the past few weeks alone:

  • ASML reported it extended its procurement contract with SMIC (OTCQX:SMICY). This relates to an existing agreement for DUV lithography that was already entered into on Jan. 1, 2018, and that would run originally until Dec. 31, 2020, and which was extended on Feb. 1, 2021, to be valid until end of December 2021.
  • SK Hynix, the world’s second-largest memory chip maker, has entered a five-year procurement contract worth $4.34 B with ASML to secure extreme ultraviolet (EUV) scanners used in manufacturing chips.
  • ASML introduced a new three-year, 6 billion euro share repurchase authorization in January 2020. Since Jan. 21, 2021, ASML has been spending approximately 32.3 million Euros on stock buyback
  • In my most recent articles about ASML. Most recently I discussed how the company would move from being the WFE (wafer front end) market leader in 2019 to second place behind Applied Materials (AMAT).

Positive Data

On Jan. 25, 2020, I wrote a Seeking Alpha article entitled “ASML: My Top Semiconductor Processing Equipment Company.” I’m still favorable about the company, but ASML is becoming increasingly dominant on EUV sales. This is not a completely positive trend for the company, which I will explain in this article.

As a percentage of company revenues, EUV revenues increased from just 7% in 2016 to 45% in 2020. I project EUV revenues will double in 2023 from 2020 revenues.

Chart 1 shows that ASML’s EUV revenues (blue line) crossed over its DUV Immersion revenues (red line) in CY 2020, according to our report entitled “Sub 100nm Lithography: Market Analysis and Strategic Issues.” The spread between the two is increasing in my forecast for 2021 and 2022 detailed in the report.

Chart 1


This free article presents my analysis of this semiconductor equipment sector. A more detailed analysis is available on my Marketplace newsletter site Semiconductor Deep Dive. You can learn more about it here and start a risk free 2 week trial now.

This article was written by

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Dr. Robert N. Castellano, is president of The Information Network www.theinformationnet.com. Most of the data, as well as tables and charts I use in my articles, come from my market research reports. If you need additional information about any article, please go to my website.

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I received a Ph.D. degree in chemistry from Oxford University (England) under Dr. John Goodenough, inventor of the lithium ion battery and 2019 Nobel Prize winner in Chemistry. I've had ten years experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University.

I have been Editor-in-Chief of the peer-reviewed Journal of Active and Passive Electronic Devices since 2000. I authored the book "Technology Trends in VLSI Manufacturing" (Gordon and Breach), "Solar Panel Processing" (Old City Publishing), "Alternative Energy Technology" (Old City Publishing). Also in the solar area, I am CEO of SolarPA, which uses a proprietary nanomaterial to coat solar cells, increasing the efficiency by up to 10%. I recently published a fictional novel Blessed, available on Amazon and other sites.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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