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ASML recently announced a massive stock buyback in the order of $12B (55% of their revenue) which left me scratching my head. They reportedly can’t meet demand
by drexlspivey 4y ago
ASML recently announced a massive stock buyback in the order of $12B (55% of their revenue) which left me scratching my head.
They reportedly can’t meet demand and the current backlog for new machines is at 2+ years. Surely a company in a sector with such massive capital expenditures has better use of this money? For example scaling production or R&D?
- phkahler 4y agoMy guess is they are spending R&D money on better/simpler/cheaper EUV light sources, so expanding production capacity of existing models isn't a great idea. Specifically my guess (and I'm no expert) is a plasma wakefield accelerator feeding a free electron laser to get tunable wavelength EUV light far cheaper and simpler than what they've got now. Tons of work to do to get there, but that's always been the case in thier business. Also, if they don't do it someone else might and then they'd be dead. There are other R&D areas to be handled too. One might ask why not spend more on the R&D, but they are probably at some kind of practical limit there too.
- usehand 4y ago> Specifically my guess (and I'm no expert) is a plasma wakefield accelerator feeding a free electron laser to get tunable wavelength EUV light far cheaper and simpler than what they've got now Don't you think they'll also be using a retro encabulator, with the modial interaction of magneto-reluctance and capacitive directance being used to generate the EUV light?
- throwaway773748 4y agoI honestly can not tell if this is a serious question or a joke throwing around physics techno babble... Maybe this is how business people feel when we try to explain why some data somewhere is out of sync because of system problems.
- usehand 4y agohttps://www.youtube.com/watch?v=RXJKdh1KZ0w https://www.youtube.com/watch?v=RXJKdh1KZ0w (:
- exikyut 4y agoI've just realized I really need to see this video re-shot next to a Shiny-Looking Thing at an ASML facility, preferably one with glowy lights emanating out of it somewhere. (I've also just realized at least 10 companies have probably re-shot this internally with their own equipment. Argh.)
- femto 4y agoOr the original paper. https://sci-hub.ru/https://doi.org/10.1049/sqj.1944.0033 https://sci-hub.ru/https://doi.org/10.1049/sqj.1944.0033
- beebeepka 4y agoAlmost disappointed you didn't mention a flux capacitor but I guess it would have been too obvious
- catoc 4y agoI was going to mention 'magneto-reluctance' but you covered that as well! Wish I could upvote tenfold to further increase your customer focus on operator excellence.
- prox 4y agoYes, but only if they can prevent side fumbling, using state of the art hydrocoptic marzul vanes.
- Animats 4y agoIs anybody close to making that work? The idea was proposed around 2014, but it doesn't seem that anyone has built it.[1] You can use a big accelerator as a EUV light source. The SLAC beamline was once used to test the concept. Medium sized (160m circumference) synchrotrons have been suggested.[2] One appears to be under construction in China. A plasma wakefield accelerator is a proposed way to shrink a powerful accelerator down to a more manageable size. Maybe. There's a project underway to use about a third of the 2-mile long SLAC beamline in this mode. ASML made zapping a droplet of molten tin with lasers work as an EUV source. That's a nightmare. This approach may or may not be better. It involves zapping a high-pressure gas with lasers. All the known ways to do this are insanely expensive and look more like physics experiments than production equipment. A clean light source, where you put electricity in and get EUV out, would be easier to work with. There was talk of "table top synchrotrons" a few years back. One startup built one, although it was more like garage-sized. [1] https://www.cambridge.org/core/journals/high-power-laser-science-and-engineering/article/conceptual-designs-of-a-laser-plasma-acceleratorbased-euvfel-and-an-alloptical-gammabeam-source/639184FCB8644B0BAD7F315B1DAE209E https://www.cambridge.org/core/journals/high-power-laser-sci... [2] https://pubmed.ncbi.nlm.nih.gov/35228673/ https://pubmed.ncbi.nlm.nih.gov/35228673/ [3] https://www6.slac.stanford.edu/news/2020-10-12-slac-starts-new-facility-revolutionize-particle-accelerators https://www6.slac.stanford.edu/news/2020-10-12-slac-starts-n...
- sllabres 4y agoCant answer the question and my knowledge is only from 'one interested' but from how long (~20 years) it took to build the current EUV source and how complicated the alternatives look this is for sure no easy feat. Can recommend [1] as the title say about the light source. Very interesting even for a non professional (and [2] as on high level overview of the machine and [3] as longer documentation inside ASML). [1] https://www.youtube.com/watch?v=5Ge2RcvDlgw https://www.youtube.com/watch?v=5Ge2RcvDlgw "The Extreme Engineering of ASML’s EUV Light Source" [2] https://www.youtube.com/watch?v=f0gMdGrVteI https://www.youtube.com/watch?v=f0gMdGrVteI "The Extreme Physics Pushing Moore’s Law to the Next Level" [3] https://www.youtube.com/watch?v=zQu_TMgHO98 https://www.youtube.com/watch?v=zQu_TMgHO98 "ASML's Secret: An exclusive view from inside the global semiconductor giant"
- benj111 4y ago>plasma wakefield accelerator Is this named after the town, a person, or just 'wake' and 'field'? Please be the town. If Wakefield can get in on the plasma accelerator sexyness, there's hope for all boring northern towns. Dewsbury fusion here we come.
- throwaway4good 4y agoWhich competitor is pushing ASML to spend more on R&D?
- phkahler 4y agoChina.
- fallingknife 4y agoIt's over 3 years, so would only be 18% of revenue, but that's still massive.
- ericbarrett 4y agoStock buybacks are equivalent in purpose to dividends. Many investors prefer them because they are not taxable, unlike dividend income.
- ghaff 4y agoThey are taxable (assuming they turn into stock appreciation which ASML has not been great at for a while) but at a lower capital gains rate.
- ericbarrett 4y agoThe buyback event itself is not taxable. For dividends, the recipient must still pay taxes even if they are reinvested (as is common) and this cash flow and tax burden is unwelcome for larger investors.
- ghaff 4y agoNo. But the whole point of a buyback is that it will presumably cause stock appreciation and that appreciation is taxable, albeit at a lower rate and not until the stock is sold.
- eastAligned 4y agoIn large or complex arrangements the share might never be sold, instead being used as leverage or as part of more complex tax avoidance strategies. Far better than a dividend.
- HDThoreaun 4y agoOr just held until death at which point no capital gains taxes are owed
- qaq 4y agoOnly if you sell and are not using a structure that will shield you from taxes until an actual withdrawal is made. You can also take out a loan using the stock as collateral to avoid being taxed.
- mcronce 4y agoASML depends on lenses from a relatively small company. That company does not have interest in ramping production any more than they already have. They don't care how much money they're offered. Nobody else can get the job done. So, as they say, it is what it is.
- deleted 4y ago[deleted]
- yucky 4y agoWhich company?
- KingLancelot 4y agoZeiss isn’t small lol
- ChuckNorris89 4y agoIt's small by HN/SV tech company standards where companies grow 2000% in workforce per year just to show growth to investors.
- 4y ago
- ununoctium87 4y agoMaybe they pay their employees in RSUs and so need to keep some amount in reserve?
- aeyes 4y agoASML is headquartered in the Netherlands, they don't do that over there - everyone is on a salary. The annual report states that they don't grant stock options since 2017 and there is no word about stock based compensation in the balance sheet.
- bradknowles 4y agoBuilding their machines takes a long time -- like a couple of years. It's also very labor intensive. And space constrained. Once the machine has been built and tested in Eindhoven, it has to be completely disassembled and shipped to the customer, then effectively completely rebuilt from the ground up. And there's a lengthy burn-in process where they have to tweak it for the specific local conditions -- which can vary if the machine has to be moved even just a foot to the left. Or if a truck drives by on a road a few miles away. So, it's really hard to scale that process for building new machines. They've got money burning in their pockets and no better place to spend it, so what do they do? Stock buybacks. Disclaimer: I did a six month contract working for them several years ago, when they were towards the start of developing their EUV process. It was a real eye opener to have the tour of the facility and have everything explained to me.
- pammf 4y ago> Once the machine has been built and tested in Eindhoven Veldhoven :)
- isoprophlex 4y agoSilicon Veldhoven :^)
- flakeoil 4y agoThat's maybe exactly why they should spend some money on more production facilities.
- jiggawatts 4y agoThey did expand their production capacity significantly.
- Mistletoe 4y agoHave you looked at the way the ceo and other execs are compensated? I assume it is based on stock performance and there is your answer. >Peter Wennink made €4,820,000 in total compensation as Co-President, Chief Executive Officer and Chairman of the Board of Management at ASML Holding in 2021. €1,020,000 was received as Total Cash, €3,537,000 was received as Equity and €263,000 was received as Pension and other forms of compensation. The term for this is a positive feedback loop. >Positive feedback in amplifier If the feedback signal is in the phase with the input signal, the effective input to the circuit is increased and this type of feedback is called positive, regenerative or direct feedback. It provides increased gain but it also increases distortion and leads to poor stability of gain.