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Will ASML escape the latest US export restrictions? It’s not looking good

hunglee2 4y ago
the big losers are going to be the non partisan third party suppliers like ASML. Super expensive capex to build this type of business, now they see their total addressable market effectively bifurcated. TSMC, Samsung also in this boat, as are the entire supply chain of smaller companies which supply them. 50% shrinkage of total addressable market is hard for any business, and that is not considering the potential rise of Chinese competitors who now have a free run at the largest single market for semiconductors
- throwaway4good 4y ago
  Asml could possible split their business in a us and non-us part … if they dare. Otherwise I agree with you. And that is probably also the reason for the muted Chinese reaction; they are being given a massive market for their own industries.
  - hunglee2 4y ago
    nothing ASML can do I think, sanctions are tough and ...there are other methods of persuasion available to the US. The Alstom case is a prominent example of the tools available. Muted Chinese reaction is in large part because retaliation does not suit the PRC. US wants to isolate China, China wants integration. Counterintuitively, the rational action by China will be simply adapt to the new norms and have the free market do it's work
    - mamonster 4y ago
      The only problem is that (as far as I understand, not a semi tech expert) is that ASML's EUV is state of the art with no competition in China. Over time China will probably be able to catch up, but medium and short term will probably be painful.
      - hunglee2 4y ago
        oh yes 100% - this is designed to cripple China here. It might well do that. The point is that there is no rational action from China that would look like 'retaliation'. The best and only option for the PRC is to develop a domestic competitor, rather than say, cut off rare earth refining. Furthermore, the reason why there hasn't been a competitor to ASML until now is not only technical but also economical - but now they are effectively out of the China market, these sanctions operate like protectionism from the other side.
  - Someone 4y ago
    They would not be allowed to use IP in the non-US part, so they would have to split their R&D, too, either spending twice what they do for the same revenues or slowing down innovation.

the big losers are going to be the non partisan third party suppliers like ASML. Super expensive capex to build this type of business, now they see their total addressable market effectively bifurcated. TSMC, Samsung also in this boat, as are the entire supply chain of smaller companies which supply them. 50% shrinkage of total addressable market is hard for any business, and that is not considering the potential rise of Chinese competitors who now have a free run at the largest single market for semiconductors

throwaway4good 4y ago
Asml could possible split their business in a us and non-us part … if they dare. Otherwise I agree with you. And that is probably also the reason for the muted Chinese reaction; they are being given a massive market for their own industries.
- hunglee2 4y ago
  nothing ASML can do I think, sanctions are tough and ...there are other methods of persuasion available to the US. The Alstom case is a prominent example of the tools available. Muted Chinese reaction is in large part because retaliation does not suit the PRC. US wants to isolate China, China wants integration. Counterintuitively, the rational action by China will be simply adapt to the new norms and have the free market do it's work
  - mamonster 4y ago
    The only problem is that (as far as I understand, not a semi tech expert) is that ASML's EUV is state of the art with no competition in China. Over time China will probably be able to catch up, but medium and short term will probably be painful.
    - hunglee2 4y ago
      oh yes 100% - this is designed to cripple China here. It might well do that. The point is that there is no rational action from China that would look like 'retaliation'. The best and only option for the PRC is to develop a domestic competitor, rather than say, cut off rare earth refining. Furthermore, the reason why there hasn't been a competitor to ASML until now is not only technical but also economical - but now they are effectively out of the China market, these sanctions operate like protectionism from the other side.
- Someone 4y ago
  They would not be allowed to use IP in the non-US part, so they would have to split their R&D, too, either spending twice what they do for the same revenues or slowing down innovation.