In a bid to capture market share, Nikon Corp. (NINOY), once a dominant player in lithography, is preparing to engage in a price war with ASML Holding NV (ASML.US) in the deep ultraviolet (DUV/ArF) lithography machine sector. Yasuhiro Ohmura, who assumed the role of Nikon's CEO in April, stated the company plans to compete by selling semiconductor lithography equipment at prices lower than its rival ASML. Ohmura, previously overseeing Nikon's chip manufacturing operations, noted that since many of Nikon's components are produced in-house, the company can offer products at reduced prices while maintaining profitability. He emphasized, "We can wage a price war. Even with lower prices, we can still secure substantial profits." In its mid-term plan announced in May, Nikon has identified semiconductor equipment as a key growth driver. Currently, Nikon and ASML are the only two companies producing ArF (argon fluoride) lithography equipment. Intel Corp. (INTC.US) previously accounted for 80% of Nikon's ArF lithography machine orders. Ohmura admitted, "Aside from Intel, we lack a sufficient track record, and our support capabilities have not yet gained market trust." He added that Nikon is in discussions with several U.S. and Asian chip manufacturers and is "close to securing" purchase orders for its ArF lithography equipment. In March, Nikon issued its most severe loss warning in history, projecting a significant loss of 85 billion yen for fiscal year 2025, marking the worst financial performance since the company's founding in 1917. Nikon's core lithography business has suffered widespread setbacks, plunging the former industry giant into an unprecedented survival crisis. Once part of the "lithography big three" alongside ASML and Canon, Nikon held about 40% of the global lithography market in 2001, with nearly one out of every two lithography machines worldwide produced by Nikon. However, its market share has now fallen to single digits, and its competitiveness has nearly vanished. Overtaken by ASML's immersion technology, Nikon fell behind and has struggled to catch up ever since. Reports indicate that over the past six months ending in March, Nikon shipped only nine lithography machines, all of which were older models for mature process technologies, highlighting a significant technological lag. In stark contrast, ASML sold 327 units in 2025, including 48 high-end EUV lithography machines, solidifying its dominant position in the global high-end market. This means that Nikon, once an industry leader deeply integrated with Intel and AMD and a standard-setter, has completely lost competitiveness in advanced process technologies. The company not only failed to capitalize on the AI computing boom but also found itself in severe financial distress due to sharply declining orders and inventory buildup. Additionally, Nikon's heavy bet on the 3D printing business has turned into a major financial drain, with substantial asset impairment losses recorded for its metal 3D printer operations. The assets acquired at high cost have yet to generate returns, as Nikon faces intense competition from Chinese 3D printing manufacturers that have captured the consumer market and made inroads into industrial applications. Meanwhile, Nikon's camera business is barely sustaining itself amid smartphone competition. In the first half of 2025, Nikon's imaging segment revenue fell by 4.4% year-over-year, with operating profit plunging 47.5%.
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