Dutch lithography giant ASML: Chinas strong demand, optimistic about exports to China

 Dutch lithography giant ASML: Chinas strong demand, optimistic about exports to China

On January 23, local time, ASML, the Dutch lithographic superpower, released its performance report for the fourth quarter and the whole year of 2018.

Observer noted that Peter Wennink, CEO of the company, in his statement today, specifically pointed out that Chinas strong demand for its products continued to favor exports to China.

As the sole supplier of the worlds most advanced extreme ultraviolet (EUV) lithography machines, Asme once banned the sale of high-end lithography equipment in China under the influence of the Wassenaar Arrangement led by the United States, which hindered Chinas development in the field of chip manufacturing, but this situation turned around last year.

In May 2018, Nikkei Asia Review revealed that China Chip Processing Enterprise Zhongxin International has ordered a state-of-the-art EUV lithographic machine from Asmer, valued at US$120 million, and is expected to deliver it in early 2019.

Asme EUV Lithography Machine

In the fourth quarter of last year, ASMA had net sales of 3.1 billion euros, net profit of 788 million euros and gross interest rate of 44.3%. In the whole year of last year, ASMA had net sales of 10.9 billion euros and net profit of 2.6 billion euros.

Asme said it had signed a memorandum of understanding with Nikon to settle patent disputes between them. The dispute is expected to have a negative impact on last years gross profit rate of 131 million euros.

Meanwhile, a fire at an electronic component supplier in December will have an impact of about 300 million euros on sales in the first quarter of this year, most of the impact will be eliminated in the second quarter, and a full recovery will take place in the second half of this year.

In December 2018, a fire broke out at a supplier factory in Asme

Sales in the fourth quarter of last year were higher than expected, and both sales and profits set new annual records. Over the past year, the company has also achieved great success in technological innovation, which will promote our growth in the next few years. Vinek said.

He revealed that in the fourth quarter of 2018, he received five orders for EUV equipment, and customer demand for EUV systems reached 30 in 2019. It is expected that the chips manufactured through ASME EUV lithography will be geared to consumers and enterprises in 2019.

At the end of the fourth quarter of last year, our customers responded to the slowdown in terminal market demand by postponing the delivery of some lithography systems from the first half of 2019 to the second half of the year in order to balance supply and demand. Said Venik.

He also said that throughout the year, demand for EUV and immersion systems will be boosted and the logic chip sector is expected to become a growth driver, based on strong customer investment in technological transformation and production capacity of the most advanced nodes.

It is noteworthy that the CEO emphasized in particular that Chinas demand is strong and Chinas exports continue to be optimistic.

Asmers Monopoly EUV Lithography Machine

Lithography machine is one of the core equipment in semiconductor manufacturing field, and Asme is the leading enterprise in this industry. According to TIN, the U.S. data analyst, Asme accounted for 87.4% of market revenue in 2017, which was 75.1 percentage points higher than Nikons second place (10.3%).

On EUV lithography, Asme is in a monopoly position - the only company in the world that can produce EUV lithography. As the most advanced chip manufacturing equipment nowadays, EUV lithography machine is the only equipment that can manufacture processes below 7 nanometers, so it is also called the savior of breaking Moores law.

At present, Samsung and TSMC are competing to produce 7-nanometer process technology chips. Both companies have ordered Asmes EUV lithography machine. In March 2017, Zhongxin International also announced that it will enter the research and development of 7 nanotechnology.

In May last year, Chief Executive Zhao Navy of Zhongxin International said in a conference call that in 2018, the company increased its capital expenditure from $1.9 billion to $2.3 billion for research and development of advanced processes, equipment expenditure and capacity expansion.

In the same month, Nikkei Asia Review revealed that Zhongxin International had purchased a state-of-the-art EUV lithographic machine from Asme, which would be delivered in early 2019. To this end, MCI spent $120 million, which is equivalent to its net profit in 2017 ($126.4 million).

At that time, the media said that although Zhongxin International lagged behind Samsung and TSMC in technology for two to three generations, and is still struggling with 28 nanometer and 14 nanometer processes, the purchase of the first EUV lithography machine by Zhongxin International highlighted its determination to upgrade Chinas independent semiconductor manufacturing.

Zhongxin International Staff in Shanghai Wafer Factory

The Wassenaar Agreement hinders Chinas high-tech international cooperation

The Wassenaar Agreement referred to at the beginning of this article, which is called the Wassenaar Arrangement on Export Control of Conventional Arms and Dual-Use Goods and Technologies, is an international organization established in 1996 by the major industrial equipment and weapon manufacturers in the world to control trade in conventional weapons and high-tech industries after the dissolution of the Paris Coordination Commission.

China is not one of the 33 member states of the Wassenaar Agreement, whose main purpose is to prevent the loss of key technologies and components outside the member states.

It is noteworthy that although the agreement allows member countries to exercise control over their technology exports on a voluntary basis, in fact, member countries are affected by the United States in important technology export decisions.

In the field of semiconductors, limited by the agreement, China has been unable to obtain the latest foreign technology in chip design and production.

However, after the Nikkei Asia Review disclosed the above information, Asme spokesman responded that all global customers, including Chinese customers, are treated equally, and the sale of EUV lithography machines to China is not in violation of the Wassenaar Agreement.

In recent years, Asme and China market interact frequently. Besides Zhongxin International, its customers include Huahong Semiconductor, Yangtze Storage, Hefei Changxin, Intel Dalian Plant, SK Hailishi Xian Plant, Fujian Jinhua, etc. In the first half of 2018, the Chinese market accounted for about 20% of Asmes revenue.

In May 2018, the lithography equipment sold by Asme to Yangtze River Storage arrived in Wuhan.

Source: Editor-in-Charge of Observer Network: Wang Fengzhi_NT2541