ASML may not be a household name like Intel, Samsung, or even TSMC. However, the Dutch company is the world's only supplier of advanced ultraviolet (EUV) equipment that allows tech giants to pack more transistors onto tiny chips that power different devices. The current generation of EUV machines are now engineering masterpieces that reduce the wavelength of light used for smaller microchips, but ASML says they are a new version to enter the semiconductor industry within a decade. The future gives new life.
Moore's Law has been life-sustaining for some time, but it's not dead yet. ASML says its latest EUV lithography device adds credence to the idea that chip manufacturers can compress more transistors into a silicon substrate within the next 10 years. At the time of writing, the Dutch company is the only supplier of EUV equipment in the world that is used to shave tiny nano-features into wafers using ultraviolet light. The company's first machines began whispering in 2017 and are an important part of a chip-making ecosystem that has produced more advanced silicon for various devices.
The company's EUV machines are as expensive as they are sophisticated. Each cost $150 million and includes more than 100,000 pieces and two cable agents, all of which are a logistical nightmare to be bought and assembled. That's why you can calculate which companies they can handle with just one finger. However, most of the devices end up in production plants owned by Intel, Samsung and TSMC.
Beginning in 2023, ASML plans to deliver the first batch of next-generation EUV equipment. The EUV digital aperture (NA) above current instruments is capable of 0.33 NA to 0.55 NA. This allows chip manufacturers to extend process nodes beyond the current limit of 2 nm, and also saves some cost when using a single-layer EUV process for advanced wafer layers.
The first of these new machines will be a prototype that will be tested throughout 2022. For any chip maker that will be the first, Intel wants to use them in mass production by 2023. The tech giant has recently been in the process of gaining leadership in processing and packaging technology for several years, and high quality EUV tools are an important part of the project. In fact, if Intel's IDM 2.0 initiative is to succeed, it will need all the help it can get from ASML. The Taiwanese company currently owns half of the EUV and wafer production equipment and intends to increase its capacity with two advanced 2nm GigaFab devices. Ironically, TSMC previously didn't believe in EUV, but today it is ASML's largest customer, thanks to Apple's insistence that EUV is the key to smaller, more powerful, and less energy-efficient chips.
While Intel, Samsung, and TSMC appear to be well placed to benefit from ASML innovations, there are companies that face significant hurdles, both financially and politically. Most importantly, Chinese companies such as Semiconductor Manufacturing International Corp. (SMIC) is trying to keep pace with the rest of the semiconductor industry, but it's also a listed US corporation.
Returning to ASML, the company expects a sales boom that will take its annual revenue to new heights by 2025. Previously, projected annual revenue was in the range of $17 billion to $28 billion, but the company is now confident that it will be In the range of 28 to 35 billion dollars and the gross profit margin will be between 54 and 56 per cent. . The new numbers build on the current increased demand for everything with a chip that lights up all foundries and parts suppliers on all cylinders in the world.
Next generation EUV ASML machine gives Moore's Law a new lease on life