TEN TIMES a second an object shaped like a thick pizza box and holding a silicon wafer takes off three times faster than a manned rocket. For a few milliseconds it moves at a constant speed before being halted abruptly with astonishing precision—within a single atom of its target.
This is not a high-energy physics experiment. It is the latest lithography machine dreamed up by ASML (ASML.AS) (ASML), a manufacturer of chipmaking tools, to project nanoscopic chip patterns onto silicon wafers. On January 5th Intel, an American semiconductor giant, became the first proud owner of this technical marvel’s initial components for assembly at its factory in Oregon.
Like the outwardly unassuming machine, its Dutch maker is full of surprises. The company’s market value has quadrupled in the past five years, to €260bn ($285bn), making it Europe’s most valuable technology firm (see chart 1).
Between 2012 and 2022 its revenues and net income both rose roughly four-fold, to €21bn and €6bn, respectively. At the end of 2023 ASML’s operating margin exceeded 34%, staggering for a hardware business and more than that of Apple, the world’s biggest maker of consumer electronics (see chart 2).
Such stellar performance, which is likely to shine even more brightly when ASML reports quarterly results on January 24th, is now routine.
The firm holds a monopoly on a key link in the world’s most critical supply chain: without its kit it is next to impossible to make cutting-edge computer processors, such as those that go into smartphones and data centres where artificial intelligence (AI) is trained.
With global semiconductor sales forecast to double to $1.3trn by 2032, every big country and every big chipmaker wants ASML’s gear. The company has become so important in the Sino-American techno-tussle that, as it emerged at the start of the year, President Joe Biden’s administration pressed ASML to cancel planned deliveries of even its older machines to China.
Yet ASML’s spectacular success is also underpinned by two other, less obvious factors. The company has created a network of suppliers and technology partners that may be the closest thing Europe has to Silicon Valley. And its business model ingeniously combines hardware with software and data.
These unsung elements of ASML’s success challenge the notion that the old continent is incapable of developing a successful digital platform.
Shrinking trick
ASML’s complex machines perform a simple task. They project the blueprints of computer chips onto photosensitive silicon wafers.
In 1986, when its first model was delivered, individual transistors measured micrometers and the company’s kit was almost like a glorified photocopier, explains Marc Hijink, a Dutch journalist and author of “Focus—How ASML Conquered the Chip World”, a new book. Today, with transistors shrunk by a factor of a thousand, ASML lithography gear is possibly the most sophisticated equipment ever sold commercially.
Story Continues
This is not a high-energy physics experiment. It is the latest lithography machine dreamed up by ASML (ASML.AS) (ASML), a manufacturer of chipmaking tools, to project nanoscopic chip patterns onto silicon wafers. On January 5th Intel, an American semiconductor giant, became the first proud owner of this technical marvel’s initial components for assembly at its factory in Oregon.
Like the outwardly unassuming machine, its Dutch maker is full of surprises. The company’s market value has quadrupled in the past five years, to €260bn ($285bn), making it Europe’s most valuable technology firm (see chart 1).
Between 2012 and 2022 its revenues and net income both rose roughly four-fold, to €21bn and €6bn, respectively. At the end of 2023 ASML’s operating margin exceeded 34%, staggering for a hardware business and more than that of Apple, the world’s biggest maker of consumer electronics (see chart 2).
Such stellar performance, which is likely to shine even more brightly when ASML reports quarterly results on January 24th, is now routine.
The firm holds a monopoly on a key link in the world’s most critical supply chain: without its kit it is next to impossible to make cutting-edge computer processors, such as those that go into smartphones and data centres where artificial intelligence (AI) is trained.
With global semiconductor sales forecast to double to $1.3trn by 2032, every big country and every big chipmaker wants ASML’s gear. The company has become so important in the Sino-American techno-tussle that, as it emerged at the start of the year, President Joe Biden’s administration pressed ASML to cancel planned deliveries of even its older machines to China.
Yet ASML’s spectacular success is also underpinned by two other, less obvious factors. The company has created a network of suppliers and technology partners that may be the closest thing Europe has to Silicon Valley. And its business model ingeniously combines hardware with software and data.
These unsung elements of ASML’s success challenge the notion that the old continent is incapable of developing a successful digital platform.
Shrinking trick
ASML’s complex machines perform a simple task. They project the blueprints of computer chips onto photosensitive silicon wafers.
In 1986, when its first model was delivered, individual transistors measured micrometers and the company’s kit was almost like a glorified photocopier, explains Marc Hijink, a Dutch journalist and author of “Focus—How ASML Conquered the Chip World”, a new book. Today, with transistors shrunk by a factor of a thousand, ASML lithography gear is possibly the most sophisticated equipment ever sold commercially.
Story Continues