Miniaturisation aids EUV expansion in semiconductors
In the Interview, the specialist said this expanding market is advancing the adoption of extreme ultraviolet (EUV). We were told as DRAM sizes in semiconductors miniaturise, EUV sales will start to increase and this should lead to more sales for ASML.
On Intel’s plans to spend EUR 17bn on a new semiconductor fabrication plant (fab) in Germany, the specialist said half of that investment will be spent on equipment. We were told potentially 20% of that funding will be used for lithography if the fab is EUV.
The specialist said that for advanced technology nodes below 10 nanometres (nm) the lion’s share of lithography will be spent on EUV because of advantages in eliminating multi-patterning and the enlarging of semiconductor toolsets.
Memory spend on EUV will grow by at least 10% YoY in 2022 – reaching USD 14bn – according to the specialist. They told us barriers to EUV adoption in memory are tool costs, but added that these costs could “start to be mitigated” by the end of this year.
We also heard that advanced semiconductor packaging could extend the longevity of 7mn or 10mn chips in the market, although it does not “negate” EUV adoption. Service and field options could be an “attractive business” for ASML, as the increase in tools requires more to be serviced. The specialist told us service and field options could have gross margins above 60%, with standard pieces of equipment gross margins at 45-47% and EUV gross margins of 50%.
To conclude, the specialist told us neon shortages caused by the Russia-Ukraine conflict are a “clear concern” for ASML. However, they told us the company had been stockpiling neon since the Russian invasion of Crimea in 2014. The specialist told us ASML has a good relationship with the Linde facility in Texas, which is able to deliver almost a quarter of the total production of neon required for the semiconductor industry.
To access all the human insights in Third Bridge Forum’s ASML – 2022 Outlook & Growth Trends Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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