6 ms·

Why can't ASML scale up? I don't understand this. I think because they are a monopoly they can work slower, they don't need the extra profits.

xxpor 4y ago
ASML is (now) a company everyone has heard of, but like GP hinted at with their Zeiss comment, their supply chain is crazy deep as well. Getting everything scaled up across companies and countries is far from trivial.
- terminalcommand 4y ago
  That's true, but this is one of the most important techs we have. From the recent news, I see that TSMC wants ASML to scale up as well. TSMC announced that it will cut its capital expenditure by 10% due to supply problems. This announcement tanked ASML's share price. My comment is that ASML is hitting their profit targets, they have backlog until 2024. If I were leading ASML or an employee of it, I wouldn't want to scale up. I am already hitting my targets, it's cozy, I have backlog until 2024, I have no competition. The current situation is good for ASML and bad for us. My comment is equally applicable for all companies in the supply chain that are monopolies.
  - snovv_crash 4y ago
    Apparently ASML's internal processes are a mess, with everything consistently blocked by technical debt. I suspect this is the biggest blocker to their ability to scale their production faster.
    - achenet 4y ago
      this makes me wish I were like the Harvey Keitel character in Pulp Fiction, so I could straighten my tie, say "I'm on it", and hop into my vintage Mercedes convertible to go fix it.
      - mattclarkdotnet 4y ago
        It’s a Honda and it’s not a convertible. Memory is strange.
        tyingq 4y ago
        US model, so it was an Acura NSX. Don't know if the one in the film had it, but some years of the NSX had a removable targa top.
  - lmm 4y ago
    Frustrating your consumers by not being able to supply their orders is how you stop being a monopoly. Eventually your backlog is long enough that it becomes worth your clients figuring out how to do what you do in-house, or a startup spots an opportunity. Being oversubscribed is a nice position to be in, but it doesn't mean you can rest on your laurels. (Plus, even if you're hitting your profit targets, leaving a boatload of money on the table has gotta be frustrating for at least some of ASML's employees and insiders).
Negitivefrags 4y ago
Scaling up too much is a huge risk. Sure, people want a lot more EUV machines right now, but what if they don’t later? You can be left with a lot of expensive capital outlay that is going unused. The semi industry is known for being very boom/bust so it’s best not to scale up too quick lest it kill your company.
- terminalcommand 4y ago
  This is a convincing argument.
- johnny22 4y ago
  The governments of the world should be throwing money at that so there's no way the company would go bankrupt. Perhaps 5 years of revenue. This seems clearly worth subsidizing.
matthewmacleod 4y ago
It’s not software - they can’t just sprinkle some Kubernetes on it and scale. There are complex global supply chains involving extreme cutting-edge technology, engineering, and research.
tempnow987 4y ago
They have a build process video. A lot of knowledge is in folks heads as well from what they said - and nothing is "mass produced" really. And it's all at the absolute limits. Zeiss covers their mirrors and lenses. The smoothness is extreme: "If you were to enlarge such a mirror to the size of Germany, the largest unevenness – the Zugspitze, so to speak – would be a whole 0.1 millimeters high." Then they have positioning / tilt accuracy. "If one of these EUV mirrors were to redirect a laser beam and aim it at the Moon, it would be able to hit a ping pong ball on the Moon’s surface." What they don't say is what the yield is on these. I've heard they have to try and make X to get y that can hit all the specs. In the machines themselves didn't they have to build in both an electron microscope and an atomic force microscope for defect detection? And then the environment they operate in is terrible from a wavelength absorption energy / contamination (tin?) issues etc.
- LargoLasskhyfv 4y ago
  I feel this could be applied to the production of EUV mirrors: https://phys.org/news/2022-10-telescope-mirrors-sharpen-view-universe.html https://phys.org/news/2022-10-telescope-mirrors-sharpen-view...
CydeWeys 4y ago
Why didn't they simply build more chips in 2020 instead of shuttering all of those automobile factories? At some point you're running into actual, real constraints, real bottlenecks in the supply chain, that will take years to resolve. You can't just scale up on short timeframes, no more than you can make a baby in a shorter time frame.
- terminalcommand 4y ago
  I know I might seem like a flat-earther with this, but I don't understand the chip crisis either. The explanation that many chipmakers went bankrupt after the automobile industry scaled down their orders seemed logical to me. But now that time has passed and we still have a chip crisis makes me think that there is something else. We know that ASML doesn't ship high tech machines to China, it only ships low tech ones. China in return holds the world hostage by not producing enough chips. With enough subsidy, I think we could ramp up production to meet demand. I also don't understand that the key companies are monopolys. It all seems a bit planned to me. Place the chip manufacturing company in Europe, chip factory in Taiwan, assemble in China. I feel like someone planned to distribute these technologies and infrastructure to avoid having one country having it all. I know I cannot support my argument, but this is a gut feeling I have. OTOH, nobody can reasonably explain why there are unsolveable real bottlenecks in the supply chain and why it would take years to resolve. Throw resources and people at it. This is not just one company with limited resources and a single goal. We should fund the semiconductor industry.
  - sylware 4y ago
    chips are critical for so many things, each "zone" of the world should have its own capabilities to build leading-edge chips, and probably with international collaboration on R&D (like ITER). I don't think the global economy can "fund" properly more than the current number of actors of this industry, namely each of those zones would have to consider what would be its "local" leading-edge chip manufacturing as a "military defence"-thingy: making money out of it would be optional.
    - 4y ago
adgjlsfhk1 4y ago
Because they're already working on the next gen (High NA EUV) which are a lot faster than the current EUV machines so developing extra capacity for the current gen will in the medium term reduce supply.

xxpor 4y ago

ASML is (now) a company everyone has heard of, but like GP hinted at with their Zeiss comment, their supply chain is crazy deep as well. Getting everything scaled up across companies and countries is far from trivial.

terminalcommand 4y ago
That's true, but this is one of the most important techs we have. From the recent news, I see that TSMC wants ASML to scale up as well. TSMC announced that it will cut its capital expenditure by 10% due to supply problems. This announcement tanked ASML's share price. My comment is that ASML is hitting their profit targets, they have backlog until 2024. If I were leading ASML or an employee of it, I wouldn't want to scale up. I am already hitting my targets, it's cozy, I have backlog until 2024, I have no competition. The current situation is good for ASML and bad for us. My comment is equally applicable for all companies in the supply chain that are monopolies.
- snovv_crash 4y ago
  Apparently ASML's internal processes are a mess, with everything consistently blocked by technical debt. I suspect this is the biggest blocker to their ability to scale their production faster.
  - achenet 4y ago
    this makes me wish I were like the Harvey Keitel character in Pulp Fiction, so I could straighten my tie, say "I'm on it", and hop into my vintage Mercedes convertible to go fix it.
    - mattclarkdotnet 4y ago
      It’s a Honda and it’s not a convertible. Memory is strange.
      - tyingq 4y ago
        US model, so it was an Acura NSX. Don't know if the one in the film had it, but some years of the NSX had a removable targa top.
- lmm 4y ago
  Frustrating your consumers by not being able to supply their orders is how you stop being a monopoly. Eventually your backlog is long enough that it becomes worth your clients figuring out how to do what you do in-house, or a startup spots an opportunity. Being oversubscribed is a nice position to be in, but it doesn't mean you can rest on your laurels. (Plus, even if you're hitting your profit targets, leaving a boatload of money on the table has gotta be frustrating for at least some of ASML's employees and insiders).

Negitivefrags 4y ago

Scaling up too much is a huge risk. Sure, people want a lot more EUV machines right now, but what if they don’t later? You can be left with a lot of expensive capital outlay that is going unused. The semi industry is known for being very boom/bust so it’s best not to scale up too quick lest it kill your company.

terminalcommand 4y ago
This is a convincing argument.
johnny22 4y ago
The governments of the world should be throwing money at that so there's no way the company would go bankrupt. Perhaps 5 years of revenue. This seems clearly worth subsidizing.

matthewmacleod 4y ago

It’s not software - they can’t just sprinkle some Kubernetes on it and scale. There are complex global supply chains involving extreme cutting-edge technology, engineering, and research.

tempnow987 4y ago

They have a build process video. A lot of knowledge is in folks heads as well from what they said - and nothing is "mass produced" really. And it's all at the absolute limits. Zeiss covers their mirrors and lenses. The smoothness is extreme: "If you were to enlarge such a mirror to the size of Germany, the largest unevenness – the Zugspitze, so to speak – would be a whole 0.1 millimeters high." Then they have positioning / tilt accuracy. "If one of these EUV mirrors were to redirect a laser beam and aim it at the Moon, it would be able to hit a ping pong ball on the Moon’s surface." What they don't say is what the yield is on these. I've heard they have to try and make X to get y that can hit all the specs. In the machines themselves didn't they have to build in both an electron microscope and an atomic force microscope for defect detection? And then the environment they operate in is terrible from a wavelength absorption energy / contamination (tin?) issues etc.

LargoLasskhyfv 4y ago
I feel this could be applied to the production of EUV mirrors: https://phys.org/news/2022-10-telescope-mirrors-sharpen-view-universe.html https://phys.org/news/2022-10-telescope-mirrors-sharpen-view...

CydeWeys 4y ago

Why didn't they simply build more chips in 2020 instead of shuttering all of those automobile factories? At some point you're running into actual, real constraints, real bottlenecks in the supply chain, that will take years to resolve. You can't just scale up on short timeframes, no more than you can make a baby in a shorter time frame.

terminalcommand 4y ago
I know I might seem like a flat-earther with this, but I don't understand the chip crisis either. The explanation that many chipmakers went bankrupt after the automobile industry scaled down their orders seemed logical to me. But now that time has passed and we still have a chip crisis makes me think that there is something else. We know that ASML doesn't ship high tech machines to China, it only ships low tech ones. China in return holds the world hostage by not producing enough chips. With enough subsidy, I think we could ramp up production to meet demand. I also don't understand that the key companies are monopolys. It all seems a bit planned to me. Place the chip manufacturing company in Europe, chip factory in Taiwan, assemble in China. I feel like someone planned to distribute these technologies and infrastructure to avoid having one country having it all. I know I cannot support my argument, but this is a gut feeling I have. OTOH, nobody can reasonably explain why there are unsolveable real bottlenecks in the supply chain and why it would take years to resolve. Throw resources and people at it. This is not just one company with limited resources and a single goal. We should fund the semiconductor industry.
- sylware 4y ago
  chips are critical for so many things, each "zone" of the world should have its own capabilities to build leading-edge chips, and probably with international collaboration on R&D (like ITER). I don't think the global economy can "fund" properly more than the current number of actors of this industry, namely each of those zones would have to consider what would be its "local" leading-edge chip manufacturing as a "military defence"-thingy: making money out of it would be optional.
  - 4y ago

adgjlsfhk1 4y ago

Because they're already working on the next gen (High NA EUV) which are a lot faster than the current EUV machines so developing extra capacity for the current gen will in the medium term reduce supply.