Fountainheadinvesting

Fountainhead Investing

  • Objective Analysis: Research On High Quality Companies With Sustainable Moats
  • Tech Focused: 60% Allocated To AI, Semiconductors, Technology

5 Star Tech Analyst Focused On Excellent Companies With Sustainable Moats

Tag: EUV Lithography

Categories
AI Industry Semiconductors

ASML (ASML) AT $690 Is A Bargain

ASML - Semiconductor Giant
ASML

Sure it could stay sluggish, range-bound, or fall till there’s some improvement in bookings, export controls to China, etc. Perhaps, that may not even happen for a while.
I think that’s an acceptable risk, now I’m getting a monopoly at a 37% drop from its 52-week high of $1,110, still growing revenue at 12% and EPS at 22%, selling for 8x sales and 25x earnings.
With TSM’s results, we saw how strong AI semiconductor demand still is and there was absolutely no let-up in their guidance.

A monopoly for AI chip production – an essential cog, without which AI is not possible – is definitely worth the risk

Categories
Semiconductors

ASML and Lam Research: A Tale of Two Semiconductor Equipment Leaders

ASML - Semiconductor Giant
ASML

Comment made on the SA article.

ASML – Lithography, Monopoly in EUV machines, each machine costs north of $200 Mn, absolutely vital for lower node semis like 3nm, which is powering the latest I-phone among others.

ASML is at the pole position since it’s a critical component for AI and/or high-end chips. Every chip being planned or in production for AI acceleration or incorporating AI acceleration is produced on a 5 nm or smaller node that requires EUV

They also have the lower-end D-EUV machines, which are also successful.

Here’s a good link to the equipment technology market.

https://www.yolegroup.com/strategy-insights/semiconductor-equipment-market-share-reshuffles-amid-memory-demand-decline

Lam Research on the other hand is strong in Etch and Deposition, which is exposed to cyclicality because it’s more of a mass market commodity with competition for AMAT, KLAC, and Tokyo Electronics. But the pickup from customers like Micron, which itself is riding the AI boom for high-grade memory equipment is a big benefit for Lam. To me the biggest strength is the resilience in the last 10 years with an EPS CAGR of 28% – that is a huge deal, cyclicals/commodity producers never get that.