ASML is one of the most important companies in the world. Whether or not it is a good investment is another question, but in terms of sheer importance to global supply chains and lack of substitutable possibilities – ASML is right up there.
ASML build photolithography machines that are critical to producing semiconductors. And semiconductors are critical for electronic systems. And these days, everything has an electronic system. From computers to cars, toys to weapons systems, and everything in between. These days they all have a semiconductor and ASML’s photolithography machine likely had a role to play in getting it produced.
ASML recently held their annual investor day and this article has examined the company’s forecast for the market for semiconductors out to 2025 and 2030. There is plenty of semiconductor jargon, but beyond it there is some interesting insight into where ASML thinks the market is going.
They believe the overall market for semiconductors will grow at ~9% per year between 2020 and 2030, taking it to $1.1 trillion by 2030. They see growth across categories: smartphones, personal computing, consumer electronics, data centres, automotive and industrial. One particularly interesting growth driver will be renewable energy, with ASML suggesting it takes 3,000 Euro worth of semiconductors to produce 1 megawatt of wind power and 4,000 Euro to produce 1 megawatt of solar.
Semiconductors have traditionally been quite cyclical and a difficult industry to invest in. ASML believe there will be a number of structural growth drivers that take the industry forward. Alongside the semiconductor companies themselves (TSMC, Samsung, AMD, Nvidia) picks and shovels companies like ASML will be interesting ones to watch.
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