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Is this something VC would help scale up? Or is it hitting some kind of hard limits of resources.

klelatti 5y ago
ASML has a market cap of c $350 billion. If they wanted to raise tens of billions on the public markets they could probably do it. Not VC territory at all. They're probably limited by the size of the market.
- raffraffraff 5y ago
  Pure market forces don't seem to be enough in a bunch of places.
  - klelatti 5y ago
    That's probably true in general but ASML surely isn't a good example. Massive capital investment and extraordinary long term planning are the things that are sometimes considered to be difficult for the private sector.
    - narrator 5y ago
      Well SpaceX, but they mostly sell to the government though.
      - youngtaff 5y ago
        Do they sell to the government or are they funded by the government i.e. without those government commitments would they exist? Same for much of US (and elsewhere's) private aerospace industries etc.
cocoggu 5y ago
My guess is that the limit is human resources. The machines are probably assembled by hand and they probably need highly-skilled and specialized engineers to work on it, such kind of profiles are rare. The demand is not large enough to industrialize the production of such a complex machine so you have to rely on humans.
FastEatSlow 5y ago
Each of their machines is custom and needs very specialised knowledge, so it's difficult to scale up. However, VC could encourage competition, which would help keep the chip industry healthy, as we all know what happens when a company has a monopoly in an industry.
- Frost1x 5y ago
  I'm a firm believer that at certain scales, competition becomes impractical to the point of irrelevance. The incentive structure has to exist to draw competitors into capital intensive markets like this and it just isn't there. As the article points out, this company has been pressured at geopolitical scales to deny China access. The fact the US government recognizes the value in denying China access because competition becomes impractical says a lot. China is filled with technical and engineering talent no different than the rest of the world and has its fair share of capital as an economic powerhouse. There's a lot of incentives for the government and people of China to develop their own competitor but it's recognized that this is impractical due to the level of proprietary knowledge, instruments, and skills needed to recreate the device. I'm confident they can produce a competitor if they choose but it'll be decades without any real competitor. Now pretend you're not the PRC but Joe Sixpack in the US and you want to enter the market. We need to drop these ridiculous ideas of competition regulating the markets. Even injecting VC money here is probably at irrelevant scale. I'm all for competition but we need to look for new models of market regulation. Competition just isn't it in many cases.

ASML has a market cap of c $350 billion. If they wanted to raise tens of billions on the public markets they could probably do it. Not VC territory at all. They're probably limited by the size of the market.

raffraffraff 5y ago
Pure market forces don't seem to be enough in a bunch of places.
- klelatti 5y ago
  That's probably true in general but ASML surely isn't a good example. Massive capital investment and extraordinary long term planning are the things that are sometimes considered to be difficult for the private sector.
  - narrator 5y ago
    Well SpaceX, but they mostly sell to the government though.
    - youngtaff 5y ago
      Do they sell to the government or are they funded by the government i.e. without those government commitments would they exist? Same for much of US (and elsewhere's) private aerospace industries etc.

cocoggu 5y ago

My guess is that the limit is human resources. The machines are probably assembled by hand and they probably need highly-skilled and specialized engineers to work on it, such kind of profiles are rare. The demand is not large enough to industrialize the production of such a complex machine so you have to rely on humans.

FastEatSlow 5y ago

Each of their machines is custom and needs very specialised knowledge, so it's difficult to scale up. However, VC could encourage competition, which would help keep the chip industry healthy, as we all know what happens when a company has a monopoly in an industry.

Frost1x 5y ago
I'm a firm believer that at certain scales, competition becomes impractical to the point of irrelevance. The incentive structure has to exist to draw competitors into capital intensive markets like this and it just isn't there. As the article points out, this company has been pressured at geopolitical scales to deny China access. The fact the US government recognizes the value in denying China access because competition becomes impractical says a lot. China is filled with technical and engineering talent no different than the rest of the world and has its fair share of capital as an economic powerhouse. There's a lot of incentives for the government and people of China to develop their own competitor but it's recognized that this is impractical due to the level of proprietary knowledge, instruments, and skills needed to recreate the device. I'm confident they can produce a competitor if they choose but it'll be decades without any real competitor. Now pretend you're not the PRC but Joe Sixpack in the US and you want to enter the market. We need to drop these ridiculous ideas of competition regulating the markets. Even injecting VC money here is probably at irrelevant scale. I'm all for competition but we need to look for new models of market regulation. Competition just isn't it in many cases.