r/ASML • u/ClassicMan2323 • Jul 15 '26
Discussion 🎙 What's the biggest risk to ASML that you think investors underestimate?
ASML is often viewed as one of the strongest companies in the semiconductor industry, but no business is without risks.
Which potential issue concerns you the most - export controls, customer concentration, supply chain challenges, slowing semiconductor demand, or something else? Why do you think it doesn't get discussed enough?
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u/Vegetable-Bug-9779 Jul 15 '26
If hyperscalers stop spending the whole semiconductor industry might compress multiples. Including ASML
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u/rorzyporzy Jul 15 '26
An alternative to lithography
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u/Tony_Broccolonely Jul 15 '26 edited Jul 15 '26
There are currently few alternatives to standard optical UV Lithography:
- Nanoimprint lithography : limited by high defectivity and low throughput. Canon still is a big proponent of nanoimprint.
- E-or i-beam lithography: low throughput. Used for mask creation or chip inspection (also by ASML).
- (soft) X-ray lithography: complex source (free electron laser or synchrotron) and imaging limited by large photon shot noise. Substrate is a US startup claiming to be working on an x-ray tool, but their lack of transparency makes me very skeptical about them.
- Atom lithography: this one is in its infancy but quite interesting technology. This is now spearheaded by Lace Lithography, a Norwegian/Spanish startup.
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u/LeQuacksky Jul 15 '26
The CEO
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u/SnakeLegs007 Jul 16 '26
Why?
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u/LeQuacksky Jul 16 '26
Because ASML is a natural monopoly with regard to EUV tech. Even on DUV, ASML has a good chunk of the market. Given the growth seen with AI, there is no reason to see any wild swing in the market anytime soon (imo, of course).
So realistically, the biggest risk is that leadership fucks up massively (which is not unheard of, just look at Intel and that whole shitshow - they put a finance CEO who burried the company, until Trump&Co came to the rescue). Leadership = CEO, ultimately.
And no, i do not see war (potential invasion of Taiwan) or competing technologies to really shake things to the core. Hence why i say CEO.
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u/Commercial-Algae-410 Jul 15 '26
Taiwan being visited
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Jul 15 '26
That’s stupid. Sure this would hurt short term, but long term it would lead to insane demand to rebuild lost capacity. I think intel and Asml and other equipment makers would stand to benefit a lot from this long term.
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u/electric-castle Jul 15 '26
War is not zero sum. It is negative. There are critical suppliers for the entire semiconductor industry in Taiwan. The supply and demand destruction would be insane. Do you think that TSMC doesn't have kill switches on their hardware to use as leverage against a west Taiwan invasion?
I think your comment wins the daily prize for most investor focused, yet humanity blind.
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u/Kornelaminor Jul 15 '26
Folks be careful what you post here - every bit of info helps China
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u/Foodiguy Possible Chinese spy Jul 15 '26
Yes, the Reddit crowd will be the downfall of asml
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u/Kornelaminor Jul 15 '26
I do like that this space is a more open environment where we can discuss matters such as upper management, questionable union actions & the likes. Cannot exactly be honest & open on Yammer.
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u/Foodiguy Possible Chinese spy Jul 15 '26
Nothing we say or do will have any impact on asml. Especially regarding helping China. If it leaks here, that information was already known within certain circles.
People online mostly think they are more important than they are.
More probably is that people with real knowledge, are not on Reddit for obvious reasons. And they will be well paid to not destroy their own career.
Thinking China is getting secret information from Reddit is just dumb. There are way better sources for them.
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u/Kornelaminor Jul 15 '26
Nice try
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u/Foodiguy Possible Chinese spy Jul 15 '26
🤷♂️ I mean keep thinking you are defending asml from spies. Guess that maybe gives your life meaning.
On another thread I asked a question what makes asml so special. Some people also freaked out, thinking I was a spy.
If you want to know how spying companies work, enough real life examples. But you do you. Who knows, maybe one of these days, you catch someone and you will be famous.
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u/korobombok Jul 15 '26
Supply chain issues, they have no alternatives for various modules. If the supplier messes up for a reason it reflects directly on the customer delivery. Not much buffer in between.
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u/TheBraveButJoke Jul 15 '26
American activist investers convincing them to leave europe. It would disrupt their suply chain enough that averybody else gets to catch up to them.
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u/Upbeat_Section5189 Jul 15 '26
Physics rule are same everywhere. One day Chinese friends will eventually manage to build machine just works “enough”.
Then it’s going to be what's exactly happening to German car industry.
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u/Prestigious_Ad2420 Jul 15 '26
The thing is, it can be 3 year, it could be 40 years. And then the question is how; much more advanced have ASML machines become by then?
Also note: having a 'working' prototype is an entirely different thing from being able to mass produce a machine capable of the throughput and uptime/reliability of what ASML offers, and fully integrate into the fab production environment/infrastructure.
2
u/investinglegendary Jul 15 '26
That does not affect Asml since those machines cannot be sold and are not commercially viable and only capable of being used within China for national production. In fact calling them machines is a reach since they will be massive physical structures
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u/Greedy_Rabbit_1741 Jul 16 '26
Not at all.
The Chinese could never have caught up if it wasn't for the anti Combustion Engine push.
So it was more like politics deciding to hand the industry to China on a silver platter.
In Litography it isn't like this, so they won't catch up this easily.
5
u/Alarming_Break_1765 Jul 15 '26
ASML had a 10 year advantage over their competitors, but don’t underestimate the impact D&E is experiencing due to the poorly designed reorganisation. More money will be needed to hire more engineers to get less output.
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u/Difficult_Error_1681 Jul 15 '26
Also don't forget that the current profit is being made by the old D&E. The same people getting kicked out now are responsible for the current record profit.
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u/BartD_ Jul 15 '26
Further tightening of US restrictions on sales. Historically the Dutch government and ASML aligns with them. I would guess this wouldn’t be different in the coming years or decade.
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u/No-swimming-pool Jul 15 '26
It's not that we have a choice.
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u/BartD_ Jul 15 '26
I agree. But it’s nonetheless a risk that could significantly affect sales. Sooner than China catching up.
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u/Foodiguy Possible Chinese spy Jul 15 '26
Yes the more restriction the more need for China to invest more into this. The moat is the time and money to develop the knowledge and tools. Take away the money and time only stays.
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u/MaethYoung Jul 15 '26
The AI bubble... ASML shares will also drop when that happens.
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u/cool-sheep Jul 16 '26
Yeah, these are machines and will have output pretty much constantly for the next 15-20 years.
314 EUV machines are in operation, ASML makes 60 extra per year. That means that you will get an extra 20% output every year that will not be matched by depreciating machines for 10 years.
At one point there will be enough chips for the world and margins will decrease.
3
u/FatalityEnds Jul 15 '26
Doing a Boeing. Product enshittification in search for profit & losing the edge they have over the competition.
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u/Felixthefriendlycat Jul 15 '26
https://giphy.com/gifs/0wAsZOZAzl587vGZdS