ASM Litography at the crux of the chips industry

If you can have your customers fund a large chunk of you’re R&D, and those customers are called Intel, then you really must be in a powerful position..
ASM Lithography Powers On – Seeking Alpha

ASM Lithography Powers On
July 11, 2012 | 2 comments | about: ASML, includes: ARMH, DELL, HPQ, INTC, MSFT, NVDA, QCOM, TSM, TXN

Here is one company from our native the Netherlands that is a world beater and will have a bit of a boost as a result of the declining euro. It’s ASM Lithography (ASML). What does it do? They provide extremely complex lithography equipment for the semiconductor market. This is really high-tech stuff, consisting of tens of thousands of parts and costing upwards of $30M.

This equipment is used to etch circuits, the intricate patterns that infuse microchips with their intelligence, onto silicon wafers.

The quest is to make these patterns ever smaller, in order to put ever more transistors on chips or expand the memory capabilities. Apart from using light with ever shorter wavelength, you run into some frontiers of the physical possibilities, which is one reason why these things are so complex and expensive. If you’re interested in the technical side you can find an explanation here.

Like chip manufacturing itself, this technology has become increasingly capital- and R&D-intensive; large up-front investments are necessary which suggest a slow concentration going on in the industry. As fellow Seeking Alpha contributor Robert Castellano has set out, this is indeed what is going on, and remarkably favorable to ASML. [Read on here]