Owning the Bottlenecks: $ARM, $ASML, $CDNS, $KLAC

Long_Equity
01-31 09:23

The global semiconductor supply chain is built on a handful of "unblockable" monopolies. My infographic attempts to map out the bottlenecks in the supply chain.

Where do you invest? I personally own $Cadence Design(CDNS)$ , $Applied Materials(AMAT)$ , $Lam Research(LRCX)$ and $KLA-Tencor(KLAC)$ .

$ARM Holdings(ARM)$ sits at the top. It licenses the CPU architecture and cores before any design tools or manufacturing begin. $Synopsys(SNPS)$ /Cadence turn ARM IP into layouts, and only then do $ASML Holding NV(ASML)$ Applied, Lam, $TE Connectivity(TEL)$ , and KLA take over to physically build the chip.

Analysing a company doesn't tell you whether it's high quality or not. To answer that question you need to compare the company with every other company - it's the only way to know whether its above average, average or below average.

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