US-China trade tensions threaten Europe's largest technology company
Plenty of places states that these are the European response to Silicon Valley: Stockholm has the same per capita horns, and London is the continent 's main VC center. But only the small Dutch town of Veldhoven - with a population of 45,000 - is home to Europe's closest to a giant technical giant.
From its depressing base near the Belgian border, ASML, a company that builds the devices that make semiconductor chips, has become a critical war in the global technology industry. At the end of 2022, it was named the largest public tech company in Europe with a market cap, driven by the widespread demand for appliances and a global chip shortage. Spin out of Dutch electronics giant Philips in 1984, ASML enables other companies to make semiconductor chips - the brains of technology in smart phones, cars, computers and smart homes. Experts describe ASML as bottles: The company claims to have between 80 and 85 percent of the total market share for lithography systems that make semiconductors. When it comes to the most advanced type of lithography device making chip, called ultraviolet lithography (EUV), that market share is up to 100 percent.
But despite the recent ASML move, one area of uncertainty remains. Due to trade tensions between Washington and Beijing, the company was banned from selling its most advanced equipment to China. Although the country currently sells only 7.6 percent of the world’s chips, according to the Semiconductor Industry Association, this number is growing rapidly and chips are one of seven technologies that Beijing has adopted. aiming for improvement. Efforts to block China from the global supply chain have raised concerns that the country will rush to develop its own version of ASML, threatening the Dutch company 's huge impact on the semiconductor market.
As a result of the gamble taken by ASML in the 1990s to continue the development of EUV technology, which uses small rays of light to carve patterns on the silicon pieces that form semiconductor chips, any challenge at the head of the company in this area at present. ASML believes that its most advanced technology is so complex that it would take others at least 15 years to reproduce.
“There are a number of companies that were competitive [in the 1990s] they decided not to invest in EUV because it was likely to be so difficult, so expensive and it might never work, "said Chris Miller, assistant professor of international history at Tufts University, which is writing a book on the geopolitical history of the computer team, as a result of which the ASML valuation has risen to more than $ 300 billion and its share price has more than doubled since its inception. 2022. Profitability is growing that it could become the first company in Europe worth more than $ 1 trillion.
The move to EUV was long and expensive. The company had to persuade its customers - Intel, Samsung and the Taiwan Semiconductor Manufacturing Company - to buy pledges in the company so that there would be enough money to fund the research. By the time it was possible to launch its first commercial EUV devices in 2022, the process had cost $ 9 billion. But the salary was great. It is now the only company that can deliver EUV devices, which make the most advanced type of chips found in newer phones and game consoles, to industry giants such as TSMC or Intel. As of September 2022, the company had sold 125 EUV machines. That may not sound like much, but there are not many companies that can make the most advanced type of chips using these devices and ASML sells them for over $ 100 million each.