As mention in many of my articles, I am a fan of semiconductor stocks. Year 2022 started really well for this sector. TSMC rose more than 6% on the first trading day. Various other company like$KLA-Tencor(KLAC)$$Micron Technology(MU)$. all trended up. So are there still buying opportunity to jump on this semiconductor wagon.
I looked around and spotted ASML. A company that i liked a lot, also a company which i shared numerous time.
This share price trend is not matching up to peers ever since China announced breakthrough in EUV.
And now, just yesterday, their factory in Germany was on fire which impact will take another few days to assess.
So investors are staying at sideline till the situation is clear.
So is this a buying opportunity? I will say Yes if you are investing long term.
Why i said so?
Think again, ASML is the leader for lithography tool. No one else come near. Yes, China announced breakthrough. But when can it produce, and will it work?
For those who have never heard of this Dutch company, let me share some information.
ASML is the only firm in the world capable of making the highly-complex machines that are needed to manufacture the most advanced chips. We call these Photolithography Scanner.
These scanners, which cost approximately $140 million each, shine exceptionally narrow beams of light onto silicon wafers that have been treated with "photoresist" chemicals. Intricate patterns are created on the wafer where the light comes into contact with the chemicals, which are carefully laid out beforehand.
This process, which leads to the formation of the important transistors, is known as lithography. The machines themselves are called extreme ultraviolet lithography scanner, or EUV scanner.
Not every lithography system that ASML makes has EUV capabilities. EUV is the company's latest technology which it introduced for high-volume manufacturing a few years ago. DUV (deep ultraviolet) is still the workhorse of the industry.
So basically all the high tech semiconductor manufacturer who are building the advance node and small design rule, they will need the EUV scanner.
Given no one else can make EUV machines that are suitable for mass manufacturing, ASML has a monopoly on the segment and there's no sign of anyone catching up.
Semiconductor analysts believe it would take around a decade and billions of dollars for another company to get to a stage where it could start to compete with ASML
I am very optimistic in ASML.
Happy investing@小虎活动@Tiger Stars
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