Preamble:
Chips, this small silicon substrate, hold up the entire sky of modern technology.
In this turbulent global semiconductor market, the wrestling of giants has never stopped.
ASML, the former overlord of lithography machines, is now also unable to escape the merciless judgment of the market.
SMIC's "dumb loss" fell on ASML's head, and the market value of 200 billion yuan evaporated in an instant, where will this game between business and politics go? Let's follow the context of numbers and facts to analyze the changes in the semiconductor industry.
ASML's dismal earnings report: an industry giant that is no longer in the limelight?
In the past, ASML was the leader in the lithography machine industry. Its technological superiority and market position seem to be indestructible. However, the latest financial report data is like a heavy punch, shattering the halo of this industry giant.
Global orders of 3.61 billion euros plunged 60 percent from 9.19 billion euros in the same period last year. The drop was so large that it exceeded all expectations. The market originally thought that the order volume of 5.1 billion euros was bleak enough, but the reality was even more cruel.
Revenue fell by more than 20%, net profit plummeted, the stock price plummeted by 11%, and the market value evaporated by 200 billion yuan...... This series of numbers is like an ASML nightmare.
Once upon a time, this company was in the capital market and investors were vying for it. And now, the dismal financial report is like a basin of cold water, dousing everyone's enthusiasm. There is no banquet in the world, and the brilliance of ASML cannot compete with the ruthlessness of the market after all.
How did this sudden "cold wave" sweep ASML? Is it a sudden change in market demand, or the rise of competitors? Or are those more complex political and economic factors hidden under the surface? ASML's predicament is no accident.
It reflects the upheaval and challenges that the entire semiconductor industry is experiencing. When the market is warm and cold, and the geopolitical game situation changes abruptly, the former giants have to re-examine their positions and futures.
SMIC's "fatalistic entanglement": opportunities and risks coexist in the Chinese market
When it comes to ASML's predicament, we have to mention the "fatalistic entanglement" between it and SMIC. This transaction controversy is like a touchstone, showing the political and economic game of the semiconductor industry vividly.
SMIC, a leader in China's semiconductor manufacturing industry, was expected to be a key partner for ASML in the Chinese market. The deposit of 120 million US dollars for EUV lithography machine represents the sincerity of the cooperation between the two parties. However, the dark clouds of politics at this time loomed over this deal, which was supposed to be mutually beneficial.
Under external pressure, ASML finally broke its promise, and this EUV lithography machine worth hundreds of millions of dollars was never delivered to SMIC. For SMIC, this is undoubtedly a "dumb loss". For ASML, losing China, a market with huge potential, is tantamount to losing a goose that lays golden eggs.
This transaction dispute is by no means an isolated case. It reflects the geopolitical risks that the global semiconductor industry is experiencing. In particular, U.S. technology export restrictions to China have become a major "stumbling block" for ASML's business in China. As the world's most advanced lithography machine manufacturer, ASML has the core technology of semiconductor manufacturing processes.
The United States, on the other hand, has set up many barriers to the export of these technologies. For Chinese companies eager to acquire advanced process technology, ASML's technology transfer is undoubtedly a "mirage". For ASML, losing China, the world's largest and fastest-growing semiconductor market, is tantamount to quenching its thirst.
Although ASML exported 450 lithography machines to China in 2023, a year-on-year increase of 50%, these are relatively backward equipment. The EUV lithography machine that can really affect the technology upgrade is still "out of reach".
However, opportunities and risks always coexist. Even in such a complex political and economic environment, the potential of the Chinese market still makes all semiconductor companies salivate.
The world's largest consumer electronics market, the most complete electronics industry chain, as well as the huge middle class and their escalating consumer demand, all provide continuous growth momentum for the semiconductor industry.
As an industry leader, if ASML can work this "fertile soil", its harvest will be limitless. In fact, even under the most severe export restrictions, ASML's business in China is still growing far faster than in other regions.
This is undoubtedly a testament to the resilience and potential of the Chinese market. The "fatalistic entanglement" between ASML and SMIC may be just the beginning. In this market where opportunities and risks coexist, whoever can find a balance in the game of politics and economy will have the last laugh.
The story of SMIC and ASML provides valuable inspiration for the entire semiconductor industry, and indeed for all foreign companies operating in China. In this era of change, enterprises must learn to survive and develop in the cracks of politics and economy.
On the one hand, it is necessary to have a keen insight into political risks and prudently manage compliance issues. On the other hand, we must also bravely grasp market opportunities and break through in the competition.
The Rise of China's Semiconductor Industry: First Come, First Came or Was It In Vain?
While we discuss ASML's predicament and SMIC's "fatalistic entanglement," a larger topic is emerging: the rise of China's semiconductor industry. This topic is both an opportunity and a challenge for the global semiconductor industry.
China's semiconductor companies, represented by Shanghai Microelectronics, are catching up quickly on the road of technological progress. The delivery of the 28nm lithography machine marks a solid step forward in the field of semiconductor manufacturing in China.
More advanced EUV technology has also entered the roadmap of Chinese enterprises. Once upon a time, advanced process technology was still the "patent" of European, American, Japanese and South Korean enterprises. Today, Chinese companies are closing this gap step by step. The speed and breadth of this technological advancement is rewriting the competitive landscape of the global semiconductor industry.
However, the rise of China's semiconductor industry has not been without its challenges. Opportunities and challenges also coexist. On the one hand, China has the world's largest consumer electronics market and the most complete electronics industry chain, which provides a broad space for the development of the semiconductor industry.
The strong support and huge investment of the government have also provided a strong impetus for the technological progress of the industry. On the other hand, the high investment, high risk and high technical barriers in the semiconductor industry have also brought huge challenges to Chinese enterprises.
The shortage of key materials, equipment, and talents, and the blockade of core technologies are all realities that China's semiconductor industry must face. In this competition between technology and market, whether Chinese companies can break through remains to be tested by time.
The rise of China's semiconductor industry is reshaping the pattern of global semiconductor competition. This change is not only a technical competition, but also a geopolitical game. For a global leader like ASML, the technological progress of Chinese companies is undoubtedly a threat. The competition for market share may be just the first step.
When Chinese companies truly master advanced process technology, the discourse power of the global semiconductor industry may undergo major changes. And this is the fundamental reason why the United States and other countries are trying to curb the development of China's semiconductor industry. In this double game of technology and politics, it remains to be seen whether China's semiconductor industry can achieve "corner overtaking".
It is foreseeable that the competition in the global semiconductor industry will become more and more fierce in the future. Technological innovation, market development, and industrial chain integration will become the key to victory.
In this competition, whether Chinese companies can be the last to come first, or in vain, will have a profound impact on the global semiconductor landscape. For an industry giant like ASML, how to stay ahead of this change and how to find a balance between opportunities and risks will be a huge test.
For China's semiconductor industry, how to achieve independent innovation while catching up with technology, and how to establish its own advantages in market competition will be the key to success or failure.
ASML's Existential Dilemma: The Death of the Netherlands, the Transformation of the World
For ASML, the Netherlands is both home and shackles. The global lithography machine giant is facing great pressure to "flee" the Netherlands. The power of politics is constantly squeezing ASML's strategic space.
The U.S. technology export restrictions and the EU's policy game all affect the nerves of this high-tech company. In the face of dramatic changes in the global semiconductor market, ASML must make its own strategic choices.
Whether to stick to the local or go global, to obey politics, or to stick to the market, these questions test the wisdom and courage of ASML's management.
ASML's technological leadership is also facing unprecedented challenges. On the one hand, technological catch-up in emerging markets such as China is shrinking ASML's lead.
On the other hand, semiconductor giants such as Intel and Samsung are also increasing R&D investment in an attempt to achieve breakthroughs in lithography technology. For ASML, innovation and R&D have always been the keys to staying ahead of the curve.
However, in today's complex and volatile global political and economic situation, ASML is facing more and more uncertainty whether it can continue to maintain high investment and high output in R&D.
Financial and market risks are also unavoidable realities for ASML. The evaporation of the market value of 200 billion is just the first sound of the alarm bell. In the context of the global economic slowdown and declining demand, ASML's revenue and profits are under tremendous pressure.
External factors such as Sino-US trade frictions and geopolitical risks have brought new challenges to ASML's market expansion. For a high-tech company, how to grasp opportunities in risks and how to break through in changes is a difficult rule of survival. This requires the courage of entrepreneurs, but also the resilience and flexibility of enterprises.
Epilogue:
ASML's story is a microcosm of the great changes in the global semiconductor industry. In this era of rapid technological change and intertwined politics and economy, there is no permanent winner. The competition in the market has always been cruel and fair.
Only those companies that can adapt to the trend of the times, master core technologies, and control geopolitical risks can stand tall in this big wave. For ASML, SMIC, and every trendsetter in this industry, there is still a long way to go. Only by innovating and embracing change can we move forward without fear of wind and waves.