1. Homepage
  2. Equities
  3. United States
  4. Nasdaq
  5. Apple Inc.
  6. News
  7. Summary
    AAPL   US0378331005

APPLE INC.

(AAPL)
  Report
Delayed Nasdaq  -  05/19 04:00:00 pm EDT
137.35 USD   -2.46%
01:52aComputer chip giant ASML places big bets on a tiny future
RE
05/19Wall Street ends lower as Cisco and Apple sink
RE
05/19APPLE SHOWS HEADSET TO BOARD, SIGNALING IT'S AT ADVANCED STAGE : Bloomberg
MT
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies
The feature you requested does not exist. However, we suggest the following feature:

Computer chip giant ASML places big bets on a tiny future

05/20/2022 | 01:52am EDT
Workers at Carl Zeiss SMT stand in front of a vacuum chamber in Oberkochen

VELDHOVEN, Netherlands (Reuters) - ASML, a semiconductor industry and stock market giant, has to think smaller. Or maybe bigger.

It is building machines the size of double-decker buses, weighing over 200 tonnes, in its quest to produce beams of focused light that create the microscopic circuitry on computer chips used in everything from phones and laptops to cars and AI.

The company has enjoyed a rosy decade, its shares leaping 1,000% to take its value past 200 billion euros as it swept up most of the world's business for these lithography systems.

It's now preparing to roll out a new $400 million machine for next-generation chips which it hopes will be its flagship by the late 2020s but for now remains an engineering challenge.

Executives at ASML's headquarters in the Dutch town of Veldhoven told Reuters a prototype was on track to be completed in the first half of 2023. They said the company and longtime R&D partner IMEC were setting up a test lab on the spot - a first - so top chipmakers and their suppliers can explore the machine's properties and prepare to use production models as early as 2025.

Yet, as investors expect further dominance and growth to justify ASML's valuation at 35 times 2021 earnings, there is little margin for error should the company encounter technical or supply-chain snags.

"Every check is green right now," said Christophe Fouquet, head of EUV programs at ASML. "But, you know, we still have to see it all (assembled) together."

EUV stands for extreme ultraviolet, the wavelength of light used by ASML's most advanced machines.

The fortunes of the project are also important for ASML's customers, chipmakers racing to expand production amid a global shortage. They include U.S. player Intel, South Korea's Samsung and Taiwan's TSMC, the biggest, which makes chips for the likes of Apple, AMD and Nvidia.

Industry specialist Dan Hutcheson of VLSI Research, who is not involved with the ASML project, said the new technology - known as a "High-NA" version of EUV - could provide a significant advantage to some chipmakers.

"It's a bit like who's got the best gun," he said.

"So either ASML makes it happen or they don't make it happen," he added. "But if they make it happen, and you don't have your orders and you miss out on this, you've immediately made yourself non-competitive."

He said TSMC eclipsed its rivals by integrating ASML's EUV machines first in the late 2010s - a mistake Intel CEO Pat Gelsinger has vowed not to make again with High-NA.

Lithography is a key determinant of how small circuitry on a chip can get, with High-NA promising a 66% reduction. Smaller is better in chipmaking, as the more transistors you pack in the same space, the faster and more energy efficient a chip can be.

Circuitry is now approaching the atomic level, leading to predictions that the end is nigh for "Moore's Law", a famous 1960's observation that the number of transistors on a microchip doubles about every two years.

"If they (ASML) don't succeed it will become difficult to continue with Moore's Law," said Jos Versteeg, an analyst at Dutch-based bank InsingerGilissen, though he noted engineers had defied similar doubts in the past.

FIRST LIGHT ON SILICON

Since 2000, ASML has rapidly taken market share from Japanese competitors Nikon and Canon, which now mainly focus on older technology. ASML controls more than 90% of the lithography market. No competitor is attempting to build an EUV system, citing high development costs.

Shortages of ASML's machines, which cost up to $160 million each, are a bottleneck for chipmakers, who have plans to spend more than $100 billion in the coming years to build extra fabrication plants to meet demand.

The High-NA machines will be about 30% bigger than their predecessors, which themselves require three Boeing 747s to carry them in sections.

IMEC, a non-profit research group that cooperates with companies across the semiconductor industry, believes setting up the lab at ASML could save up to a year in development time.

ASML said it had five orders for pilot machines, which should be delivered in 2024, and "more than five" orders from five different customers for faster production models for delivery starting in 2025.

But this is no slam-dunk.

There are formidable challenges in integrating a host of complex components, including an optics system of polished, hyper-smooth curved mirrors, which are being built in a vacuum by Germany's Carl Zeiss.

Versteeg at InsingerGilissen said that while ASML enjoyed a near monopoly, its "pricing is dependent on the productivity of the machines". Meanwhile, it must sell EUV tools to the shrinking number of companies that make leading-edge chips, which include memory chip makers SK Hynix and Micron.

ASML is also tied to the wider fortunes of the cyclical chip industry, which some researchers expect to double past $1 trillion in annual sales this decade.

Fouquet worries most about supply-chain issues.

"Right now, and like with every other product, we see some stress in the supply chain, and this is if you ask me today, probably the biggest challenge we have with High-NA."

(Reporting by Toby Sterling; Editing by Pravin Char)

By Toby Sterling


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ADVANCED MICRO DEVICES, INC. 0.41% 96.67 Delayed Quote.-32.82%
APPLE INC. -2.46% 137.35 Delayed Quote.-22.65%
ASML HOLDING N.V. 2.41% 514.5 Real-time Quote.-28.87%
CANON INC. -0.65% 3192 Delayed Quote.14.71%
CARL ZEISS MEDITEC AG 4.30% 124.95 Delayed Quote.-35.19%
INTEL CORPORATION -0.80% 42.01 Delayed Quote.-18.43%
MICRON TECHNOLOGY, INC. -2.32% 69.4 Delayed Quote.-23.73%
NIKON CORPORATION 1.83% 1502 Delayed Quote.18.95%
NVIDIA CORPORATION 1.10% 171.24 Delayed Quote.-41.78%
SAMSUNG ELECTRONICS CO., LTD. -0.88% 67500 End-of-day quote.-13.79%
SK HYNIX INC. -2.20% 111000 End-of-day quote.-15.27%
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED -2.97% 522 End-of-day quote.-15.12%
THE BOEING COMPANY 1.29% 127.14 Delayed Quote.-37.65%
All news about APPLE INC.
01:52aComputer chip giant ASML places big bets on a tiny future
RE
05/19Wall Street ends lower as Cisco and Apple sink
RE
05/19APPLE SHOWS HEADSET TO BOARD, SIGNAL : Bloomberg
MT
05/19BofA Securities Lowers Apple's Price Target to $200 From $215, on Supply Chain Headwind..
MT
05/19WALL STREET STOCK EXCHANGE : Nowhere is safe anymore
05/19BofA Securities Adjusts Apple's Price Target to $200 From $215, Reiterates Buy Rating
MT
05/19Factbox-From Apple to Tesla and Starbucks, companies count the costs of Shanghai lockdo..
RE
05/19Tencent Music Entertainment, French Embassy in China Collaborate on New Music Album
MT
05/19China’s Smartphone Shipments Plunge 29.2% in Q1
MT
05/19Taiwan firms resuming production in China as COVID curbs ease -minister
RE
More news
Analyst Recommendations on APPLE INC.
More recommendations
Financials (USD)
Sales 2022 394 B - -
Net income 2022 99 889 M - -
Net cash 2022 63 669 M - -
P/E ratio 2022 22,3x
Yield 2022 0,66%
Capitalization 2 223 B 2 223 B -
EV / Sales 2022 5,48x
EV / Sales 2023 5,12x
Nbr of Employees 154 000
Free-Float 99,9%
Chart APPLE INC.
Duration : Period :
Apple Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends APPLE INC.
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 45
Last Close Price 137,35 $
Average target price 189,07 $
Spread / Average Target 37,7%
EPS Revisions
Managers and Directors
Timothy Donald Cook Chief Executive Officer & Director
Luca Maestri Chief Financial Officer & Senior Vice President
Arthur D. Levinson Independent Chairman
Kevin M. Lynch Vice President-Technology
Jeffrey E. Williams Chief Operating Officer
Sector and Competitors
1st jan.Capi. (M$)
APPLE INC.-22.65%2 223 035
XIAOMI CORPORATION-41.38%35 164
WINGTECH TECHNOLOGY CO.,LTD-44.13%13 415
SHENZHEN TRANSSION HOLDINGS CO., LTD.-42.53%10 771
FIH MOBILE LIMITED-31.62%945
DZS INC.-10.05%403