Although not as impressive as Nvidia, the lithography giant's stock price has doubled steadily since the bottom in 2023 and recently hit a historic high. Worth noting is that ASML's market cap surpassed luxury goods group LVMH and became the second largest European market cap company after Novo Nordisk. The recent surge in stock prices is due to ASML's announcement that it will deliver its latest high numerical aperture extreme ultraviolet lithography machines to its top customer, Taiwan Semiconductor, this year.$ASML Holding (ASML.US)$Data source: Nihon Keizai Shimbun Chinese Net

Data source: Nihon Keizai Shimbun Chinese Net

For chip manufacturing, lithography is an essential process. It can be said that without lithography machines, there would be no modern chip industry.

It is reported that this equipment is ASML's most advanced product so far, with a price tag of up to 350 million euros per unit, which shows its high-end position in the industry. The market's confidence in ASML has been greatly boosted, driving its stock price to soar.

ASML's CFO, Roger Dassen, also said that it will begin to receive "significant" (significant) 2nm related orders from TSMC in the second and third quarters. ASML previously stated that due to the strong demand for advanced logic chips used in smartphones and artificial intelligence, its sales target for 2025 is between 30 billion and 40 billion euros.

How strong is ASML?

Regarding chip manufacturing, lithography is an essential process. It can be said that without lithography machines, there would be no modern chip industry.

The global lithography machine sales market is dominated by three companies, which account for more than 90% of the market share: ASML in the Netherlands, Nikon in Japan, and Canon in Japan.

• These three companies, specifically speaking, if only from the sales volume, ASML in the Netherlands accounts for 63%, Canon in Japan accounts for 30%, and Nikon in Japan accounts for 7%;

• But looking at sales revenue, ASML in the Netherlands is the dominant enterprise, accounting for 91%; Canon in Japan accounts for 6%, and Nikon in Japan accounts for only 3%.

Because ASML firmly occupies the high-end lithography machine market, it monopolizes the highest-end extreme ultraviolet (EUV) lithography machine market and has a 100% market share. The EUV lithography equipment produced by the ASML subsidiary is known as a gem on the crown of modern industry, and all the most advanced process chip devices required by global chip manufacturers come from ASML.

This EUV lithography machine can adapt to the design and manufacturing of 7nm to 5nm process chips. Currently, ASML is the only company in the world that can produce such equipment.

How does Wall Street look at this?

As ASML's spokesperson confirmed that its largest customer, TSMC, will receive its most advanced High-NA EUV lithography machine at the end of this year. For ASML investors, this advanced machine provides a guarantee for the company's future sales, so senior executives of TSMC previously expressed concerns about the selling price.

"Buy" rating and expectations of future order growth given by Jefferies analysts have made investors more optimistic about ASML's future sales prospects.

This machine will stand as a towering achievement of engineering, and whether Chuang is up to the challenge of reviving the moribund fabrication industry in the United States is a question that has been debated by insiders for weeks.

"I like the functionality of high numerical aperture light exposure equipment, but I don’t like its price," said Zhang Xiaqiang, senior vice president of TSMC, in May.

Data source: Nihon Keizai Shimbun Chinese Net

The bank analyst said that there will be a lot of orders for ASML in the coming quarters. He added that while TSMC will increase the production of the next generation 2-nanometer chip in the second half of 2025, ASML has not received a large number of orders yet.

Wells Fargo & Co is also very optimistic about the future market of ASML in the US stock market. The institution gave ASML a target price of up to $1150 for the next 12 months and reiterated its "shareholding" rating for ASML.

As for the European stock market, Berenberg Bank gave ASML a target price of up to €1100, while Bank of America, which is extremely bullish on the chip industry, gave ASML a target price of up to €1156.

Will ASML become the next split tech company after Nvidia and Broadcom?

As Nvidia, Broadcom and Lam Research successively announced their stock splits, ASML became the only semiconductor company on the US stock market that costs over $1000.

On May 21, Lam Research's board of directors approved a 1-to-10 stock split plan, which is expected to take effect after the market on October 2;

On May 22, Nvidia announced a 1-to-10 stock split plan, which will take effect after the market closes on June 7;

On June 12, Broadcom announced a 10-to-1 stock split plan, which is expected to take effect after the market closes on July 12.

Bank of America previously believed that Nvidia's stock split could start a wave of stock splits in the US stock market. Therefore, the market's attention is now turning to ASML.

Since its listing, ASML has undergone five stock splits, including two reverse splits in September 2007 and November 2012. Analysts at the private finance and investment consulting firm Motley Fool named the company as a likely candidate to announce another traditional stock split plan soon.

However, in recent years, with the intensification of global semiconductor market competition and the impact of Sino-US trade frictions, ASML is facing unprecedented challenges.

But from a long-term perspective, ASML's competitive advantage in the global chip market is still obvious, and it has strong irreplaceability, so its market in the future is still broad, and the pace of expansion may continue.

Mooers,

Do you have a bullish outlook on ASML's future trend?

Will it become the next split tech company after Nvidia and Broadcom?

Feel free to leave your thoughts in the comments section~

Editor/Somer