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"Another factor propelling ASML’s growth is the global push for technological sovereignty. On top of the industry’s capex of 150 billion dollars per year, ASML estimates that governments have set aside another 150 billion dollars to support local semiconductor activities, particularly manufacturing operations. According to Wennink, the industry desperately needs those kinds of investments. “Our industry, ASML and its customers, has structurally underestimated the required capacity,” the CEO said, echoing previous remarks.
Wennink admitted the investment spree could lead to overcapacity and/or cyclicality. That doesn’t pose a big risk, however, as it’s established players doing the expanding. “No matter how you look at it, they’re going to be rational. Yes, we’ll probably have some cyclicality, but it will be controlled.”
