U.S.-China trade tensions threaten Europe’s largest tech company

many places Claiming they are Europe’s answer to Silicon Valley: Stockholm has the most Unicorns per capita, London is continental Europe Venture Capital CenterBut only the Dutch town of Veldhoven, with a population of 45,000, is the closest Europe has come to a big tech giant.

From its humble base near the Belgian border, Asmaris a company that makes machines that make semiconductor chips, and it has quickly become an important part of the global tech industry. By the end of 2021, it will be named Europe biggest Public tech companies by market capitalization, driven by the pandemic’s demand for equipment and a global shortage of chips. Spin-off from Dutch electronics giant Philips in 1984, ASML enables other companies to manufacture Semiconductor chip——Tech brains in cell phones, cars, computers and smart homes. Experts describe ASML as a bottleneck: The company claims it has an 80% to 85% share of the total market for lithography systems that make semiconductors. When it comes to the most advanced type of lithography machine for chip manufacturing, the extreme ultraviolet lithography machine (EUV), the market share soars to 100%.

But despite ASML’s recent momentum, there is an area of ​​uncertainty looming. The company has been banned from selling its most advanced machines to China due to trade tensions between Washington and Beijing.Although only sold in China 7.6% According to the Semiconductor Industry Association, the number of chips worldwide is growing rapidly, and chips are one of seven technologies owned by Beijing Aim for developmentThe attempt to block China’s access to global supply chains has raised concerns that the country will rush to develop its own version of ASML, threatening the Dutch company’s outsize influence over the semiconductor market.

Thanks to ASML’s gamble in the 1990s to pursue the development of EUV technology, which uses tiny rays of light to carve patterns on the silicon wafers that form semiconductor chips, the company’s dominance of the field is currently unchallenged. ASML estimates its state-of-the-art technology is so complex that it will take other companies at least 15 years to replicate.

“Several competitive companies [in the 1990s] Decided not to risk investing in EUV because it seemed too difficult, too expensive and probably never worked,” said Chris Miller, an assistant professor of international history at Tufts University who is writing a book on European geopolitical history. Computer chips. As a result of the bet, ASML’s valuation has soared to more than $300 billion, and its stock price has more than doubled since the beginning of 2020. Guess are Install It could become Europe’s first company with a market capitalization of more than $1 trillion.

The transition to EUV is long and expensive. The company had to convince its customers — including Intel, Samsung and TSMC — to buy a stake in the company so it had enough money to fund the research. By the time it was able to launch its first commercial EUV machine in 2017, the process had cost $9 billion. But the payoff is huge. It is now the only company able to supply industry giants like TSMC or Intel with EUV machines that make the most advanced types of chips in new cellphones and game consoles. As of September 2021, the company has sold 125 EUV machines. That may not sound like much, but not many companies can use these machines to make the most advanced chip types, and ASML sells them for over $100 million each.

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