After massively exporting 23 lithography machines to China in the first quarter, ASML recently expressed its goodwill to Chinese chips again, saying that it will recruit 200 employees in China to provide more thoughtful services to Chinese customers. ASML’s move may be because it is worried about China’s Lithography machine technology is rapidly upgrading and is about to break its monopoly.
In 2021, ASML sold a total of 57 lithography machines to China, and China has also become ASML's largest customer. China contributed more than US$29 billion in revenue to ASML, exceeding the approximately US$25 billion of South Korea and Taiwan.
With the increasingly obvious signs of oversupply of chips--the inventory level of the mobile phone industry chain is relatively high, the prices of some chips have fallen by 80% from last year's high recently, and the demand for chips is declining significantly. Gartner, a market research agency, even believes that the demand for chips in the global market next year will decrease The decline of more than 20% is due to the impact of the rapid expansion of production capacity in the past two years due to the decline in chip demand, and chip manufacturers may suspend production capacity expansion as a result.
Since 2019, 86 chip manufacturing projects have been planned globally, but only 35 have been completed so far. It is precisely because of this chip production capacity competition that the global demand for lithography machines has surged, and ASML has also benefited a lot from this, and its profits have skyrocketed. However, the expansion of chip production capacity may stop now, and ASML's lithography machines may not be bought by anyone.
At this time, the customer of China is particularly important, because China is the world's largest manufacturing country, and China's chip production capacity expansion may continue, and even lower prices due to the cessation of global chip production capacity expansion resulting in a surplus of lithography machines. The decline in the price of lithography machines has accelerated the expansion of production capacity, which is more important to the lithography machine market.
As the importance of the Chinese market to ASML is further highlighted, China's chip manufacturing industry chain is accelerating. At present, China has made breakthroughs in several major links of chip manufacturing, among which the etching machine has broken through to 5nm. All other links have progressed to 14nm, and only the lithography machine is the biggest obstacle in China.
However, Shanghai Microelectronics is already promoting 28nm lithography machines, which are sufficient to meet the needs of the mature technology with the largest domestic demand; as for EUV lithography machines, many scientific and technological institutions led by the Chinese Academy of Sciences are gradually breaking some of the technologies, perhaps almost In the next year, China will also be able to produce EUV lithography machines.
Under such circumstances, ASML is of course worried about China's breakthroughs in lithography machine technology. Once China's advanced lithography machines are mass-produced, China will no longer need to import ASML lithography machines, and ASML will lose a heavyweight customer, especially It is at a time when the global chip industry is gradually entering a downward cycle.
If China successfully mass-produces advanced lithography machines, it is more likely to become a major threat to ASML, because many previous examples have shown that as long as China achieves mass-produced products, it can quickly reduce costs, and the cost is far beyond that of European and American companies. , which is even more the prospect of ASML fear.
It may be precisely because of the above-mentioned concerns that ASML continues to show goodwill to China, and does not even rule out further reducing the price of lithography machines. There are many previous examples to prove that as long as China can achieve mass production of advanced technology products, European and American companies will quickly reduce prices. On the one hand, they hope to obtain income through this, and on the other hand, they hope to suppress their Chinese counterparts.
In this way, it is not difficult to understand why ASML is showing favor to Chinese chips. Perhaps it has seen that China's advanced lithography machine technology is getting closer to mass production, and it can no longer stop China's progress. It can only bow its head and strive for immediate interests. .